Consumer Behaviour

1. Introduction to Consumer
Behaviour

2. What is Consumer Behaviour?
• Consumer behavior is the study of how
people make decisions about what they buy,
want, need, or act in regards to a product,
service, or company. It is critical to understand
consumer behavior to know how potential
customers will respond to a new product or
service. It also helps companies identify
opportunities that are not currently met.

3. • Consumer buying behaviour is all
psychological, social and physical behaviour of
potential customers as they become aware of,
evaluate, purchase, consume and tell other
people about products and services.”

4. • A recent example of a change in consumer behavior is the
eating habits of consumers that dramatically increased the
demand for gluten-free (GF) products. The companies that
monitored the change in eating patterns of consumers
created GF products to fill a void in the marketplace.
However, many companies did not monitor consumer
behavior and were left behind in releasing GF products.
Understanding consumer behavior allowed the pro-active
companies to increase their market share by anticipating
the shift in consumer wants.

5. The Three Factors
• Psychological Factors-In daily life, consumers are being
affected by many issues that are unique to their thought
process. Psychological factors can include perception of a
need or situation, the person's ability to learn or
understand information, and an individual's attitude. Each
person will respond to a marketing message based on their
perceptions and attitudes. Therefore, marketers must take
these psychological factors into account when creating
campaigns, ensuring that their campaign will appeal to
their target audience.

6. • Personal Factors-Personal factors are characteristics that
are specific to a person and may not relate to other people
within the same group. These characteristics may include
how a person makes decisions, their unique habits and
interests, and opinions. When considering personal factors,
decisions are also influenced by age, gender, background,
culture, and other personal issues.
• For example, an older person will likely exhibit different
consumer behaviors than a younger person, meaning they
will choose products differently and spend their money on
items that may not interest a younger generation.

7. • Social Factors-The third factor that has a significant impact on consumer
behavior is social characteristics. Social influencers are quite diverse and
can include a person's family, social interaction, work or school
communities, or any group of people a person affiliates with. It can also
include a person's social class, which involves income, living conditions,
and education level. The social factors are very diverse and can be difficult
to analyze when developing marketing plans.
• However, it is critical to consider the social factors in consumer behavior,
as they greatly influence how people respond to marketing messages and
make purchasing decisions. For example, how using a famous
spokesperson can influence buyers.

8. Importance of understanding buyer behaviour:
• Customer Needs Satisfaction: Organization should offer a
marketing mix that satisfy the marketing needs. Every
customer is looking for a satisfaction from a particular
product or service which he is buying in exchange of certain
amount of money. So buyer is always expecting something
more from the supplier and hence supplier must opt for
balance between ideal sale and practical aspect because
ultimately every extra service provided over and above the
normal practice is resulting in increase in cost of product.

9. • Marketing Mix Development- Customers’ response to
marketing mix keeps changing. Better understanding of the
factor that influence consumer helps organization
development appropriate marketing mixes.
• New Market Opportunities:Unsatisfied needs motivate
customer to buy. By understanding buyer behavior,
marketing can locate new market opportunities. Customer
now analyze specifications, quality, and cost of product
before purchasing a product. If he is unsatisfied with one
seller then thousands of other seller selling same product
are ready at his doorstep to fulfill his buying needs.

10. • Target Market Selection:Behavior is an
importance variable for market segmentation.
By understanding buyer behavior organization
can effectively segment the market.

11. 4 Forms of Buying Behaviour
• Complex
• Dissonance reducing
• Habitual
• Variety seeking

12. Complex Behaviour
• This behaviour occurs when customers get very much involved in
the purchase, and acquaint themselves with brands and quality
differences. This behaviour normally occurs in three steps:
• Firstly, the buyer develops beliefs about the product.
• Secondly, attitudes or willingness to accept get developed in the
buyer
• Thirdly a well thought out choice is made.
• This applies to costly products about which not much is known to
the consumer in the early stages. This is probable when a person
wants to buy a PC or a Laptop. There are too many product features
to consider and compare, especially if the buyer is unfamiliar with
computers and their peripherals

13. Dissonance Reducing Behaviour
• Sometimes, in spite of high involvement, the
buyer may find it difficult to differentiate
between brands.
• High involvement occurs when the product to
be purchased is:
• Costly,
• Needed infrequently, and
• The purchase is viewed as a high risk.

14. • The buyer will go around to collect data, but on not making
much of headway with comprehending the data, will
decide quite hastily based on price or customer
convenience. In other words, the customer does not know
much about product category.
• After the purchase, the customer may experience some
regret, on realizing more about the product, and its weak
spots. He/she might hear about the comparative
advantages of other brands. This regret is also known as
‘dissonance’, which may develop new beliefs and attitudes
among customers.

15. Habitual Behaviour:
• For many products, we never think and apply
our minds while making purchases. The best
example is groceries. We have fixed brands,
tried and accepted through years of
purchasing experience. When we buy now we
rarely get involved, and we pick the same
brand from habit.

16. Is brand loyalty and habitual buying behaviour
same?

17. • There are mistaken views of this type of behaviour that this
is a form of brand loyalty. Brand loyalty emerges from
considerable thinking and analysis of product features,
which is in fact high involvement. In the case depicted
above, the involvement is rather low. It is a sort of habit,
which is dominant. The buying is quick and passive. The
buying behaviour first starts from brand beliefs and passive
learning.

18. Variety Seeking Behaviour:
• There are some products in which involvement during
buying is very low, but they become significant later, during
or after initial consumption. For Example , We might shift
from Priya to Mother’s pickles just because we need a
change of taste once in a while. Or a consumer may shift
toothpastes frequently for not very significant reasons. The
customer is probably seeking variety.
• The strategies depicted by different retailers are- reminder
advertising, or significant presence on shelves, or stealing
customers by price reduction or projecting special and new
qualities of competing products.

19. Assignment 1
Strategies for attempting to convert low
involvement products into one of high
involvement.

20. Consumer Behaviour in
Contemporary Environment
• Huge strides in computing technology mean that consumers are
increasingly informed because they are networked globally.
• Consumer co-creation: this movement identifies the co-creation of value
in markets and places the consumer in a reciprocal relationship with the
organisation.
• Processes, which empower consumers, not only through the operation of
extra knowledge regarding products and services, but also through the
ability to connect with
• Introduction to like-minded others and share experiences in online brand
and consumer communities.
• Consumers are also routinely involved in the process of product design in
design workshops or through design competitions.

21. • Sustainability is ‘a trend that is simultaneously economic, political,
cultural, philosophic and technological in
• nature; that is vast in scope; and which reflects the economic, political,
cultural, philosophic and technological milieu of its day’
• The Developmental School of Macromarketing argues that marketing
offers an important set of tools to promote the development and welfare
of wider society
• Scholars have made a series of suggestions as to how we should go about
doing this: bearing responsibility for the environmental impact of the
choices we make; thinking about consumption not as a political right but
rather as a responsibility; breaking the link between consumption and
carbon emissions; and putting an end to seeing the propensity to consume
as the natural state of humans.

22. Consumer Behavior and
Technology
• Consumers are more connected.
• Consumers use multiple devices
• Customers have high expectations.

23. Consumer Behavior in Electronic
Market
• With the online communication through
Internet, customers see various ads online.
• This is a major source of publicity for
segments and influencing CB.

24. Stages of purchase in Electronic
Market
• Stage 1- The most useful characteristic of Elec.
Mkt is it supports the pre purchase stage and
helps customers to know and compare
different options.
• Stage 2- During the purchase stage , after
sales services and information of quality are
the most imp points which helps the
consumers to decide which product they must
buy or which seller they must buy from.

25. • Stage 3- Post purchase behavior is very imp as
after the purchase, the consumers might have
difficulty or concern abt the product so, after
purchase services are v imp.

26. Challenges in Electronic Markets
• Consumerism
• Quality
• Added Advantage
• Mobile apps