2. Topics Covered
Consumer-behaviour study is fundamental to marketing
Connecting with consumers and consumer insighting: The purpose
Consumer-specific characteristics as well as psychological processes influence
buying
Buying motives can be rational or irrational
Buying habits/shopping behaviour
The buying-decision journey and the stages buyers go through
Several participants play a role in most buying decisions
Business buyers evince a distinct behaviour, matching their objectives
3. Consumer-behaviour Study Is
Fundamental to Marketing
• Marketing is all about delivering value to the consumer.
• Value delivery rests on grasping consumer behavior.
• The marketer can fix the value selection for his offer if he knows
how the consumer goes about her value selection.
• Marketing strategy, as a whole, rests on grasping consumer
behaviour.
4. Connecting with Consumers and
Consumer Insighting: The Purpose
Study of Consumer Behaviour: The Route to ‘Connecting with Consumers’
In order to ‘connect with consumers’ and gain ‘consumer insights’, marketers turn to
consumer-behaviour study.
To connect with consumers/consumer insighting, marketers raise the following
questions:
• Why do they buy?
• Why do they buy one brand in preference to another?
• Why do they buy a brand again and again?
• Why do they shift from one brand to another?
• How do they buy?
• What kind of journey they make in arriving at their purchase decision?
• Wherefrom do they buy, and why?
• How frequently do they buy the product? And in what volumes?
• How do they actually consume the product?
• What other products do they buy, and why?
5. Consumer-specific Characteristics as well as
Psychological Processes Influence Buying
Consumer behaviour and buying-decision process are influenced by two entities:
1. Characteristics of the consumer as an individual (Figure 8.1)
2. Psychological processes underlying buying process
1. Characteristics of the consumer as an individual
a. Personal factors
i. Personal demographics
ii. Personal psychographics
b. Cultural factors (Exhibit 8.1)
i. Culture
ii. Subculture
iii. Social class
c. Social factors
i. Reference groups
ii. Roles assumed
d. Information reaching the consumer
Continued…
6. 2. Psychological processes underlying buying process
a. Motivation
b. Perception
c. Learning
d. Memory
• Views of Freud, Maslow and Herzberg on motivation
Figure 8.2 ‘Maslow’s Hierarchy of Needs’ provides a fivefold categorisation of the needs
Exhibit 8.2 ‘Sensory Marketing: What It Is and How It Helps Marketing’ provides details on
sensory marketing.
• Neuromarketing and brain science: A new window to sensing buyer behaviour
Exhibit 8.3 Neuromarketing: A New Tool for Sensing Buyer Behaviour’ provides details on
neuromarketing.
• Consumer characteristics and psychological processes interact and generate the buying
decision
Consumer-specific Characteristics as well as
Psychological Processes Influence Buying
…Continued
7. Buying Motives Can Be Rational or
Irrational
Why does a person buy certain products/brands?
What are his motives in buying them?
Buying motives can be defined as ‘all the impulses, desires and considerations’
which induce a buyer to purchase a given product.
Buying motives are basically of two kinds:
1. Product motives
2. Patronage motives
Figure 8.3 ’Classification of Buying Motives’ shows the classification of buying
motives in a nutshell.
Mini Case 8.1 ‘Spotting Consumer Behaviour Trends Correctly: LG Electronics’
explains how spotting the trends in consumer behaviour correctly and early is essential
for business success.
Continued…
8. Buying Motives Can Be Rational or
Irrational
Is buying process more irrational (emotional) than rational?
Behavioural economics influencing consumer behaviour theory
Exhibit 8.4 ‘Behavioural Economics, BDT, Nudge Theory and Consumer
Behaviour’ explains the impact of behavioural economics, BDT and nudge theory on
consumer behaviour.
Neuromarketing’s position on the issue. It more or less coincides with that of
the behavioural economists.
Exhibit 8.5 Buying decisions More Rational or More Emotional? Views of
Lindstorm explains the position including the views of Martin Lindstrom.
…Continued
9. Buying Habits/Shopping Behaviour
Marketers should also know the ‘buying habits’ of customers—’how, when and where’ they buy.
Buying habits/shopping behaviour vary depending on the following:
The type of goods in question
Consumer characteristics
Purchase situations involved
Technology to which the consumers get used
Social media/social networks to which the consumers get used
Buying habits can be best studied in relation to the types of products purchased.
Consumer goods have been classified into four types from this angle:
Convenience goods
Shopping goods
Specialty goods
Services
10. The Buying-decision Journey and the
Stages Buyers Go Through
The following are the main approaches:
The eight-stage approach
The five-stage approach
The funnel approach
The McKinsey consumer-decision journey approach
Figure 8.4 ‘Buying-decision Journey: Stages the Consumer Goes Through in
Buying Decision’ shows the eight-stage as well as the five-stage approaches.
Figure 8.5 ‘Purchase Funnel and Circular Journey’ explains the funnel approach.
AI and Big Data Support Analysing and Predicting Buying Behaviour
Exhibit 8.6 ‘Flipkart Captures Buying Behaviour Using AI and Big Data’ explains
how the rules of the game on understanding buying-decision journey have got altered
with these new developments. Continued…
11. The Buying-decision Journey and the
Stages Buyers Go Through
Buying behaviour has a link with buying situations
• High-involvement and low-involvement buying situations
• Variety-seeking buying behaviour and dissonance-removing buying behaviour
• New products adoption and diffusion of innovations
Everett Rogers classifies consumers according to their readiness to try new
products/ideas into five categories:
1. Innovators
2. Early adopters
3. Early majority
4. Late majority
5. Laggards
…Continued
12. Several Participants Play a Role in Most
Buying Decisions
In several cases, a number of persons participate in the purchase, each playing a
specific role:
• Initiator
• Influencer
• Decider
• Payer
• User
Parents play the decider/payer; children, the influencer
Tweens as influencers: A prominent feature in modern times
The marketer has to know ‘who all’ participate in buying and who plays what role.
Figure 8.6 ‘Consumer Behaviour/Buying Process in a Nutshell’ explains what is involved
in and what a marketer needs to know on consumer behaviour and consumer-decision
13. Business Buyers Evince a Distinct
Behaviour Matching Their Objectives
Distinctive Features of Business Markets/Organisational Buying
• More of rational buying
• Knowledgeable and professional buyers
• Size and value of the purchase is large
• Purchase is infrequent
• Time-consuming and involves long negotiations
• Several people—‘a complete buying centre’ involved
• Involves procedures/documentation
• Supplies are often made to specifications
• Competitive bids
• Few buyers, each with large buying clout
• Direct, one-to-one relationship with seller
