CONSUMER BEHAVIOUR - MEANING DEFINITION MODULE 1 VTU MBA

2. On 29 June 2007 Apple launched the iPhone in the US amid
much fanfare about its touch screen interface, Internet
capability and iPod features.1 In spite of its hefty price tag
($499–$599) 170,000 iPhones were sold in the first two days
and sales topped one million units by September 2007.
However, Apple received hundreds of complaints from early
iPhone purchasers when the company reduced the price by
$200 two months after the launch. Apple responded
immediately with $100 store credit to any Apple store or the
Apple website. The launch of the iPhone illustrates some of
the questions that can be answered through the study of
consumer behaviour.
Which consumer needs were met by the iPhone?
What motivated consumers to line up for days outside of
Apple and AT&T stores to ensure that they were able to
purchase the phone?
Why was the phone so successful?
Why did consumers react so negatively to the drop in price?
Why did Apple react by offering iPhone owners $100 worth of
credit?
Finding answers to these questions and understanding why
consumers behave the way they do is critical to any fi rm’s
success.

3. The study of consumer behaviour
examines the products and services
consumers buy and use and how these
purchases influence their daily lives.
This field covers a lot of ground.
It has been defined as:
‘the study of the processes involved
when consumers acquire, consume
and dispose of goods, services,
activities, ideas in order to satisfy their
needs and desires’.

4. Meaning and definition of CB
•The term Consumer Behaviour(CB) is defined as
the behaviour that consumers display in
searching for, purchasing, using, evaluating and
disposing of products and services that they
expect will satisfy their needs - Leon G.
Schiffman & Leslie Lazar Kanuk

5. • Consumer behaviour focuses on how individuals make decisions
to spend their available resources (time, money, effort) on
consumption-related items that includes what they buy, why they
buy, when they buy it, where they buy it, how often they buy it,
how often they use it, how do they evaluate it after the purchase
and the impact of such evaluations on future purchases, and how
do they dispose of it.
• Consumer behaviour refers to the actions and decision processes
of people who purchase goods and services for personal
consumption. -James F Engel, Roger D Blackwell and Paul W
Miniard

6. • Two different kinds of consuming entities: the personal consumer
and the organizational consumer.
• Personal Consumer : Buys goods and services for his or her
personal use, or for household consumption or for just one
member of the family or as a gift for a friend. The products are
bought for final use by individuals, who are referred to as end
users or ultimate consumers.
• Organizational Consumer :Includes profit and non-profit
businesses, government agencies (local, state, national) and
institutional (e.g. schools, hospitals, and prisons), all of which buy
products, equipment, and services in order to run their
organizations.

7. Significance of CB
•Production Policies
•Price policies
•Decision regarding channels of distribution
•Decision regarding sales promotion
•Exploiting marketing opportunities
•Consumers do not always act or react predictably
•Consumer preferences are changing and becoming highly
diversified
•Rapid introduction of new products
•Implementing the marketing concept

8. Difference between consumer and customer
• The terms "consumer" and "customer" are often used interchangeably,
but a consumer and customer are not always the same entity.
• In essence, consumers use products while customers buy them.
Customer is a sub set of consumer
• The term “customer” is used to refer to someone who regularly
purchases from a particular store or company.
• The term “consumer” refers to any one engaging in any of the activities
used in our definition of CB .
• These are the potential purchasers of products and services offered for
sale.

9. • Customer is a sub set of consumer
• A consumer is an end user.
• A consumer acquires goods and services for direct use or ownership.
• Whereas customer can in turn resell the products and services to the
consumers
• A customer is an individual or organization who purchases goods, or
sometimes just browses and doesn't buy, whereas a consumer is
anyone who uses the goods that have been purchased, or uses any
products or services that have been generated within the economy.

10. Customer
• The term “customer” is used to refer
to someone who regularly purchases
from a particular store or company.
• Customer can in turn resell the
products and services to the
consumers. In other words, Customer
is a person who uses the product for
selling purpose
• Customer purchases the product or
service
• A customer is an individual or
organization who purchases goods, or
sometimes just browses and doesn't
Consumer
• The term “consumer” refers to any one
engaging in any of the activities used in
our definition of CB . These are the
potential purchasers of products and
services offered for sale.
• A consumer is an end user. A consumer
acquires goods and services for direct use
or ownership. In other words,
• Consumer is the person who uses the
product for their personal consumption
• Consumer uses the product
• A consumer is anyone who uses the goods
that have been purchased, or uses any
products or services that have been
generated within the economy

11. • So, therefore if a man was to go to a shop and purchase a bar of
chocolate, and his wife was the one to eat it, the man would be the
customer (as he bought the product) and his wife would be the
consumer (as she used the product).
• A consumer may also be a customer and a customer can also be a
consumer, but situations occur where this is not the case. In general,
your marketing efforts should be geared toward the consumer, rather
than the customer.
• Consumers and customers are very important people in maintaining
the balance and profit of one’s company.

12. Consumer Motives
• Consumer has a motive for purchasing a particular product.
• Motive is a strong feeling, urge, instinct, desire or emotion that makes
the buyer to make a decision to buy.
• Buying motives thus are defined as those influences or considerations
which provide the impulse to buy, induce action or determine choice in
the purchase of goods or service .
• These motives are generally controlled by economic, social, psychological
influences etc.
• Motives which Influence Purchase Decision The buying motives may be
classified into two:
i. Product Motives
ii. Patronage Motives

13. i. Product Motives
• Product motives may be defined as those impulses, desires and
considerations which make the buyer purchase a product.
• These may still be classified on the basis of nature of satisfaction: a)
Emotional Product Motives b) Rational Product Motives
• Emotional Product Motives are those impulses which persuade the
consumer on the basis of his emotion. The buyer does not try to reason out
or logically analyse the need for purchase. He makes a buying to satisfy
pride, sense of ego, urge to initiate others , and his desire to be unique.
• Rational Product Motives are defined as those impulses which arise on the
basis of logical analysis and proper evaluation. The buyer makes rational
decision after chief evaluation of the purpose, alternatives available, cost
benefit, and such valid reasons.

14. ii. Patronage Motives:
• Patronage motives may be defined as consideration or impulses
which persuade the buyer to patronage specific shops.
• Just like product motives, patronage motives can also be grouped as
emotional and rational.
• 1. Emotional Patronage Motives are those that persuades a customer
to buy from specific shops, without any logical reason behind this
action. He may be subjective for shopping in his favourite place.
• 2. Rational Patronage Motives are those which arise when selecting a
place depending on the buyer satisfaction that it offers a wide
selection, it has latest models, offers good after sales service etc .

15. Nature and Characteristics of Indian Consumers
1. Young Demographics - Indian Market is blessed with young population (60% is
below 30 yrs). They demand new set of products and services. They are able to
earn more thus enabling them to spend more for better life
2. Aspirational consumer – The Indian consumers demands the same standard of
living as the developed country. They look for better priced products that offers
excellent value
3. Value Consciousness – Indian consumers are value conscious. They look for value in
their purchases even in luxury products!!!
4. Networked consumer – The global trend of networked consumers are mirrored in
India as well. They are connected thro’ websites, social media, mobile phones etc
5. Socially Conscious – there is an increased awareness about good practices, trust,
transparency, ethics etc. Values have become important to the consumers.
6. Brand Switchers – due to lot of competitors and choices, consumers are constantly
switching the brands. Thus the brand manager has to find a very powerful
differentiator to encourage consumers to stay with the brands

16. Nature and Characteristics of Indian Consumers
7. Thinking beyond categories – categories, in India, are becoming irrelevant. E.g.,
Mobile – camera, music player, organizer, internet browsing, games etc.
8. Religious Diversity – the 1 billion Indians belong to 7 religions viz., Hinduism,
Muslim, Christianity, Sikhs, Buddhism, Jainism and Zoroastrians + castes and
sub-castes. The customs differs for different sect
9. Diversity in dress and food habits – every state or religion has its own dress
styles, ornaments, jewellery etc north and south Indian food habits
differs…even religion wise – food habits differs
10. Working women – tremendous growth in late 1990s – they are key decision-
makers in purchasing
11. Conservatives – belongs to middle-class; cost-saving, spending more time -DM
12. Rising purchasing power – mkt for luxury products is increased at an astonishing
rate;

17. Factors influencing Indian consumers:
1. Changing Demographics
2. Smaller Households
3. Increasing awareness
4. Westernization
5. Organized retail stores
6. Celebrity influence
7. Quality-oriented outlets
8. Freebies
9. Product color, size, design and shape
10. Changes in saving and investment patterns

18. Consumer Movement in India
• In India, the consumer movement as a "social force" originated with
the necessity of protecting and promoting the interests of consumers
against unethical and unfair trade practices.
• Food shortage, black marketing, adulteration of food-products, high
prices, etc. gave birth to the consumer movement in an organized
form in the 1960s.
• At the initial stage, consumer organization were largely engaged in
writing articles and holding protests.
• Thus, they formed consumer groups to look into the malpractices in
ration shops and overcrowding in the road passenger transport.

19. Consumer Movement in India
• The consumer movement was started due to the dissatisfaction of the
consumers as many unfair trade practices was followed by the sellers
• There was no legal system available to consumers – to protect them from
exploitation
• In India, the movement started in the year 1920 via Consumer protection
Act.
• This act’s main objective was to protect the interest of the consumers by
educating and uniting the consumers to fight against the malpractices and
injustice done by any organization
• This movement is a social movement where the consumers together fight
against the injustice

20. Rights of Consumers in India
• Right to Safety
• Right to be Informed
• Right to Choose
• Right to be Heard
• Right to seek redressal
• Right to Consumer Education
• Right to Healthy Education
• Right to Basic Needs

21. Responsibilities of Consumers in India
• Responsibility of Self-help
• Proof of Transportation
• Proper Claim
• Proper use of Products/Services

22. Consumerism
• In the word Consumerism, “ Consumer” means the user and “ism” means
movement, and hence, consumer movement popularly known as
consumerism.
• It is an organised and collective movement of consumers.
• The movement seeking to protect and inform consumers by requiring such
practices as honest packaging and advertising, product guarantees, and
improved safety standards.
• Movement and policies aimed at regulating products, service, methods and
standards of manufacturers, sellers and advertisers in the interests of the
buyer.
• Consumerism is an organized movement of citizens and government to
protect the rights and increase the power of buyers in relation to sellers.

23. Benefits of Consumerism
1.Consumer education
2.Consumer Groups can liaison between Government & Industry
3.Product Research & Information to Consumer
4.Inculcate Honesty, Responsiveness & Responsibility on to Manufacturers
& Marketers.
5.Move towards Societal Concept of Marketing
6.Improvement in supply
7.Product rating

24. Obstacles of consumerism
1. Lack of leadership
2. Illiteracy
3. Difficulty in disseminating consumer education
4. Cumbersome legal process
5. Lack of effective implementation of legislative measures