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What products and services do we buy?
Why do we buy?
How often do we buy?
From where do we buy etc?
Are the issues which are dealt with in the discipline of consumer behavior
Consumer behavior can be defined as these acts of individuals (consumers)
directly involved in obtaining, using and disposing of economic goods and services
including the decision processes that precede and determine these acts.
IMPORTANCE OF CONSUMER BEHAVIOUR FOR MARKETERS
1. Consumer behavior is helpful in understanding the purchase behavior and
preferences of different consumers. As consumers we differ in terms of our
sex, age, education, income, occupation, family set-up, religion, nationality,
2. To successfully market to different market segments, the market needs
appropriate marketing strategies which we can be design only when he
understands the factors which account for these differences in consumer
behavior and tastes.
3. In today’s world of rapidly changing technology, consumer tastes are also
characterized by fast changes. Consumer behavior provides invaluable clues
and guidelines for marketers on new technological frontiers which they
should explore. For example- CTV in lieu of B/W TV
4. Consumer behavior is a process and purchase forms one part of this
process. There are various psychological and environmental factors which
influence this process, to the extent that the marketer can understand and
manipulate the influencing factors, he can predict the behavior of
Thus the importance of consumer behavior lies in the fact that the behavior
can be understood and influenced to ensure a positive purchase decision. The
marketing manager’s interest lies exactly here i.e. to ensure that his marketing
strategy results in purchase of the product.
TYPES OF CONSUMERS
All consumers can be classified as
All individuals fall into the category of personal consumer.
All business organizations, government agencies and bodies, non business
organizations such as hospitals, temples, and trusts are organizational consumers
of goods and services purchased for running the organizations.
BUYER VERSUS USER
Often the person who purchases the product is not the person who actually
consumes or uses the product.
Question – Who should be the subject of study in consumer behavior?
Should we study buyer or consumer?
Many companies play safe and focus their promotion at both the user and the
buyer. For example- Maggi Noodles- Mother and Children
A SIMPLE MODEL OF CONSUMER BEHAVIOUR
Marketing Stimuli Other Stimuli
Product - Economic
Channel of distribution -Social
Consumer Decision Making
Buyer Characteristics Buyer Decision
Personal & -Process
Consumer Decisions & Actions
EXAMPLE- “A SIMPLE MODEL OF CONSUMER BEHAVIOUR”
You are on your way ‘home’ from work after a hot, long, tiring day.
On the way you see a hoarding/ kiosk for a cola drink which promises to be
cool, refreshing and tasteful.
This hoarding/kiosk provides you a stimulus to stop at the nearest cold
drink shop and drink a cola.
All three brands (Pepsi, Coke and Thums Up) are available at the shop at a
You can recall some association with each of the three brands from the
advertisements. You have seen on media viz T.V., hoardings, newspapers,
You buy a particular brand of cola and consume.
The initial stimulus for this purchase and consumption was provided by the
This was further backed-up by other stimuli such as product display in the
shop, watching other consumers buy a particular brand, a pop material,
earlier satisfaction with a given brand etc.
Your response to these stimuli results in the purchase of a particular brand.
In between the process of receiving these stimuli and responding to
them, you went through a decision making process.
The stimuli, the process of decision making and response constitute
a simple model of consumer behavior.
DETAILED MODEL OF FACTORS INFLUENCING CONSUMER BEHAVIOUR
Reference Groups Age & Life cycle Psychological
Sub-culture stage Motivation
Family Occupation Perception
Social Class Income Learning
Role & Statuses Lifestyle Beliefs & Buyer
When a need is sufficiently pressing, it directs the person to seek its satisfaction,
it is known as motive.
Primary Needs or motives
These are physiological needs which we are
born with. For example- need for air, water,
clothing & shelter.
These are our acquired needs, which we have developed in response to the
society & environment we live in. for example- need for power, prestige, esteem,
affection, learning, status etc.
MASLOW’S HIERARCHY OF NEEDS
Ego Needs, Prestige, Status,
Success, Self respect
Social Needs, Affection, Friendship,
Safety & Security Needs, Protection,
Food, water, Air, Shelter, Sex etc
Same product- Many segments- example- Bicycle
One- for community
Second- Recreational/Leisure Need
Third- Need of a health aid
Fourth- for converting into rickshaw/cart
Example- Generally consumers tend to perceive the quality of perfumes on the
It can be described as “how we see the world around us”
The different sights, sounds, smells, tastes & sensations that we feel are known as
stimuli. Each person recognizes, selects, organizes & interprets these stimuli in his
own individual manner based on his needs, values & expectations and this is
known as perception since each individual’s needs, motives and expectations are
unique. Therefore each individual perception is unique.
Perception helps to explain the phenomenon of why different individuals respond
differently to the same stimulus under the same condition.
As a marketing manager you are providing stimulus to your consumers through
the physical shape, color, size, fragrance, feel, product taste, packaging,
But we all have an in built, screening system which helps us to ‘select’ &
‘recognize’ only the relevant stimuli & ignore all the others.
There are three aspects of perception:-
People are more likely to notice stimuli which relate to their immediate needs.
For the marketer, the implication is that he has to carefully and accurately identify
his potential customers since other customers are not at all likely to notice the
stimuli having identified the potential customers, the marketer has to ensure that
the stimuli are interesting enough to attract and hold their attention.
When you attempt to fit information to suit your own ideas or personal meaning
the process is known as Selective Distortion. Thus a marketer may find that his
message is often not received in the intended manner but it is twisted in different
ways by different consumers.
For example- Washing machines (Punjab), hair dye (goat- Rajasthan), Refrigerator
(for storing goods & services)
People forget much of the stimuli which they receive and only retain that
information which reinforces their values and decision.
New Born- instinctive behavior
Adult- learned behavior
For example- housewife has need for cutting down cooking time- Pressure Cooker
Positive feedback (friend)
She buys and is satisfied with its performance her response to pressure cooker is
reinforced. Satisfied housewife may settle for another product of same company
(say oven) i.e. generalization of response.
Consumers can be made to learn the desired behavior through an interplay of
motives, stimuli cues, responses and reinforcements.
BELIEFS AND ATTITUDES
A person’s belief- cooking oil ‘X’ has lowest fat content. Belief based on real facts
or notion or opinion- the person has.
A belief is a ‘descriptive’ thought that a person has about something. The belief
that the customer has about a brand is important. Therefore it determine his
behavior towards buying and using the belief constitute the brand image and if
the customer has the wrong belief he is likely to generate negative image about
The marketer must ensure that consumer have all relevant and correct
information about the brand to facilitate formation of a positive image.
Attitude is defined as a mental, emotional or rational predisposition with regard
to a fact, state, person or an object. In the context of consumer behavior we are
studying the attitude of buyers towards all the relevant attributes of a product or
services as well as the marketer and markets.
Attitude is formed on the basis of learning, knowledge, information, education,
upbringing, thinking, lifestyle, experience, predisposition, belief, faith, outlook,
communication, observation, etc. It can be good or bad, optimistic or pessimistic,
positive or negative, broad or narrow friendly or unfriendly & so on. It may be
consistent, may change with several external factors like time or environment,
may be influenced or even can influence another attitude.
DETAILED MODEL OF FACTORS INFLUENCING CONSUMER BEHAVIOUR
DEMOGRAPHIC FACTORS AND LIFESTYLE STAGE
Age influences and buyer’s decision the need for different products and services
changes with age.
Babies and children need product like milk powder, baby foods and toys.
Young adult’s need- clothes, recreational and educational facilities,
transportation and a host of other age and fashion related products.
The first factor influencing a buyer’s decision is his age need for different
products changes with age.
There are certain physiological differences between men and women which
result in their having different consumption needs. For example:- women
need certain specialized medical facilities, clothes and cosmetics. Their
requirement is different from that of men.
Consumption behavior is also influenced by the specific stage of the family
DEMOGRAPHIC FACTORS AND LIFECYCLE STAGE
STAGE IN LIFE CYCLE BUYING/BEHAVIOUR PATTERN
Single stage- young, unmarried people, living
away from home
Few financial burdens. Spend on rent, food
very basic kitchen equipment/furniture
stereo systems etc
Young children newly married.
Better off financially now, wife is usually
working, highest purchase rate, spend on
furniture, durables such as refrigerator, gas
stoves, vacation etc.
Full Nest- Ⅰ
Youngest child under-6
Spend maximum on home purchases,
interested in new products, influence by
advertising. Buy T.V., baby foods, cough,
medications, toys etc
Full Nest- Ⅱ
Youngest child over-6
Some wives return to work, better financial
position, buy large sized packs, education,
bicycles, house purchasing
Full Nest- Ⅲ
Old married couple with dependent children
Financial position still better, spend on
education, better furniture, cars, appliances
Empty Nest- Ⅰ
Older married couples, no children at home,
have head still working
Spend on travel, recreation, health care, self
improvement, home improvement etc
Empty Nest- Ⅱ
Older married, no children at home, head
Drastic reduction in income, buy medical
appliances, Medicare products for health
Solitary survivor Likely to sell home, but income still good
Working Reduced income, spend on medical products
EDUCATION AND OCCUPATION
Education widens a person’s horizons, refines his tastes and makes his outlook
Occupation also shapes the consumption needs people following specialized
occupations such as- photography, music, carpentry etc need special tools and
Further the status and role of a person within an organization affects his
occupation behavior. For example- chief executive buys 3 piece suits of best
fabric; handmade leather briefcase junior manager in same organization may also
buy similar things- but compromises on quality.
The income which a person earns is an extremely important influence on his
consumption behavior. He may aspire to buy certain goods and services but his
income may become a constraint. Person’s attitude towards spending vs saving
and his borrowing power are also important.
Small size packaging in sachets is meant for LIG customers.
Luxury products are more income sensitive than necessities.
Personality is sum total of an individual’s psychological traits, characteristics,
motives, habits, attitudes, beliefs and outlooks. Personality is the very essence of
individual differences in consumer behavior. Personality is defined as those inner
psychological characteristics that both determine and reflect how a person
responds to his environmental stimuli. Personality is enduring and ensures that a
person’s responses are consistent over time.
Different types of personalities can be classified and each type responds
differently to the same stimuli and personality can be used to identify and predict
For example- Charms cigarettes used by young, modern, carefree personality.
Potential marketer segment students and other young people.
Surf’s Lalitaji- A middle class traditional forthright and objective housewife for
appeal to a potential customer of surf.
Lifestyles are defined as patterns in which people live; as expressed by the
manner in which they spend money and time on various activities and interests.
Lifestyle is a function of our motivations learning, attitudes, beliefs and opinion,
social class, demographic factors, personality etc.
Life style is measured by a technique known as psychographics. It involves
measuring consumer’s responses to activities, interests and opinions (AIO) along
with collecting information on demographic factors.
ACTIVITIES INTERESTS OPINIONS DEMOGRAPHICS
Work Family Themselves Age
Hobbies Home Social issues Education
Social Job Politics Income
Vacation Community Business Occupation
Entertainment Recreation Economics Family Size
Club Membership Fashion Education Dwelling
Community Food Products Geography
Shopping Media Future City Size
Sports Achievements Culture Stage in life cycle
Garden Vareli, Raymonds, Vimal textiles have based their promotional strategies
DETAILED MODEL OF FACTORS INFLUENCING CONSUMER BEHAVIOUR
The study of culture encompasses all aspects of a society such as its religion,
knowledge, language, laws, customs, traditions, music, art, technology, work
patterns, products etc. All these factors makeup the unique distinctive
personality of each society.
1. Formal learning
In which parents and elders teach children the proper way to behave.
2. Informal Learning
In which we learn by imitating the behavior of our parents, friends, film actors/
artists in action.
In which instructions are given about the specific method by which certain
things have to be done such as printing, dancing, singing etc.
Through a marketer can influence all the 3 types of learning through his
company’s advertising strategy. It is informal learning which is most amenable
to such influences.
The kind of products and advertising appeals that can work effectively in a
society depend largely on its cultural background.
For Eg:- In American society, individualism, freedom, achievement, success,
material, comfort, efficiency and practically are the values. Products/services
which fulfill these values are successfully marketed in America.
In Indian society- conformity, spiritualism, respect for elders, traditionalism and
education are few dominant cultural values.
However our society is undergoing a cultural metamorphosis, some major
cultural shifts have far reaching consequences for the introduction of a vast
variety of new products and services. Some of these changes are-
With more women joining the work force there is an increasing demand for
products like gas stoves, mixies, washing machine, precooked food, fast food
People in our society today wish to acquire relevant education and skills that
would help improve their career prospects , so many professional/ career
oriented centres are coming up.
Physical fitness, good health and smart appearance are on a premium today so
slimming centres and beauty parlors are mushrooming in major cities.
A sub culture is an identifiable distinct, cultural group which while following the
dominant cultural values of the overall society also has its own beliefs, values
and customs that set them apart from other members of the same society.
Sub cultural category Illustrative sub culture
Nationality Indian, Pakistani, Sri Lankan
Religion Hinduism, Sikhism, Islam, Christianity
Race Black, white, Asian
Age Young, middle aged, elderly
Sex Female, male
Occupation Farmer, teacher, doctor
Social class South, north, western
Geographic location South, north, eastern, western India
These subcultures offer readymade market segments to the marketer who can
position his products to meet the specific needs, motivation, perceptions and
attitudes of each sub culture. However the marketer may need to modify both
his product and advertising appeal to suit their specialized needs.
Each member of a society is a member of several groups( such as elderly,
keralite, Christian, female, teacher.)
Social classes can be defined as relatively permanent and homogeneous
divisions in a society which individuals or families sharing same values, life
styles, interests and behavior can be categorized. Social class is a concept based
on distribution of status and the categories are usually ranked in a hierarchial
order ranging from low to high status. Social status is an idea basis for
segmenting the market.
Major social classes and their dominant characteristics and buying behavior
Social class Distinguishing
Upper Upper Elite of society, aristocrats, or top industrialists,
inherited wealth; well known family background;
spend money lavishly but in discreet,
Spend on property, homes, best
education for children, frequent
foreign vacations, antiques,
jewellery, custom made cars
Lower Upper Top professionals, businessman who have
earned rather than inherited money, style and
taste is conspicuous and flamboyant, they seek
professions which will reflect their status
Spend on large homes with
flashy and expensive décor, best
education for children,
imported cars, latest household
gadgets, 5-star hotels.
Upper Middle Professional careerists coming from middle class
values of respectable buying conformity,
emphasis is on good education, style is gracious
Spend on buying quality
products, irrespective of the
category of product it is quality
which is the most important
feature, color TV, VCR, Maruti
car are some of the products
associated with this class.
Lower Middle White collar workers such as office workers,
small businessman, traders, value neatness and
cleanliness and want their home and professions
to reflect this
Spend a great deal of time
shopping around for best
bargain, they buy refrigerator,
B/W TV, scooter, motor cycle
Upper Lower Poorly educated, semi- skilled factory workers,
they comprise the largest social class segment.
Their major motivation is security, purchase
decision, often impulsive about exhibits a high
degree of brand loyalty
B/W TV, gas stove, ceiling or
table fan are bought but largely
on hire purchase basis, if
Lower Lower Often uneducated, at the bottom of the society
and working as unskilled labor , live from day to
day basis with little planning for future.
Buy only the basic necessities of
life usually buy loose and
unbranded products have no
comprehension and value of
The consumer’s decision to purchase and use certain products and services is
influenced not only by psychological factors, his personality and life style, but
also by the people around him with whom he interacts and various social
groups he belongs to .
A group is defined as two or more people who interact to achieve individual or
The 3 categories of groups are-
Primary & Secondary groups- A primary group is one with which an
individual interacts on a regular basis and whose opinion is of importance
For eg:- family, neighbours, close friends, collegues and co-workers
Secondary groups are those with which an individual interacts only
occasionally and does not consider their opinion very important.
Formal & Informal groups- Rotary, lions, Jaycees are well known social
groups in our society. A formal group has a highly defined structure,
specific roles and authority positions and specific goals. An informal group
is loosely defined and may have no specified roles and goals. For eg-
meeting neighbours over lunch once in a month, for friendly exchange of
Membership & Symbolic groups- A membership group is one to which a
person belongs or qualifies for membership. All workers in a factory
qualify for membership to the labour union. Symbolic group is one in
which an individual aspires to belong but is not likely to be recognized as
a member. A head clerk in an office may act as if he belongs to the top
management group by adopting their attitudes, values and modes of
Reference groups- are used in advertising to appeal to different market
segments, group situation with which potential customers can identify
are used to promote products and services. Hidden in this appeal in the
subtle inducement to the customer to identify himself with the user of
the product in question. The three types of reference group appeals are
celebrities, experts and common man.
celebrities Film stars & sport Heroes
experts Doctors, accountants, lawyers
Common man Lalitaji (surf)
Indirect reference groups comprise those individuals or groups with
whom an individual does not have any direct face to face contact such as
filmstars, TV stars, sportsmen, politician.
Direct reference groups are ones which exert a significant influence on
consumer’s purchase decision and behavior can be classified as
Formal shopping groups
Consumer action groups
Family – two families shape an individual’s consumption behavior.
1. Family of orientation is the family in which an individual is born, consists
of parents, brothers and sisters.
2. Family of procreation consists of consumer’s spouse and children. Within
the family, different members play different roles, marketers want to find
out exactly the role played by individual member. For eg- traditionally
wife purchases food, clothing and other household sundries, Husband
plays a dominant role in the purchase of automobiles/insurance children
are also beginning to exert their influence on family purchase decisions.
TV, music system, personal computers etc.
An individual may participate in many groups has position within each
group can be defined in terms of activities he is expected to perform. For
At workplace At home
Individual manager Spouse/parents
Requires 3 piece suit, tie,
Reason To reflect status Informal/comfort
Each role a person plays has a status which is relative prestige according
to society. People buy and use products which reflect their status.
The norms of a group are the implicit rules of conduct and behavior that
are expected of its member.
For eg:- multinational company in India
Norm for office wear is shirt/tie even in summer
Marketers need to identify the various groups to which potential
consumers belong to market the products required.
This implies that members of a group have adopted attitudes and
behavior patterns that are consistent with the group’s norms. In the
context of consumer behavior it refers to the percentage of members who
knowingly use the same brand of product.
Apart from family, a consumer is influenced by the advice he receives
from his friends, neighbours, relatives and collegues about what products
and services he should buy.
This process of influencing is known as the opinion leadership process and
is described as the process by which the opinion leaders normally
influences the actions and attitudes of others.
The advice of opinion leaders is sought in case of specific products. People
who have acquired considerable knowledge and experience in a particular
field are considered as opinion leaders in that area.
Advertisers/marketers are therefore concerned with reaching opinion
Diffusion of Innovation
The acceptance of new products, brands and ideas is known as the
diffusion of innovation. Marketers are concerned with spread or diffusion
of this innovation.
CONSUMER BEHAVIOR- DECISION
In between the stage of receiving the stimuli and responding to it, the consumer
goes through the process of making his decision.
A decision is the selection of an alternative out of the several number of
LEVELS OF CONSUMER DECISIONS
As a buyer are consumer, we are all the time making decisions such as
1. What product to buy
2. Which brand to buy
3. From where
LEVELS OF PURCHASE RELATED CONSUMER DECISIONS FOR PERSONAL
2 wheel or 4 wheel vehicle
Scooter, motor cycle, moped, car, jeep
Brand level Scooter Car
Bajaj, Honda, Kinetic Maruti, Chevrolet
Motor cycle Jeep
Yamaha, Hero Honda, Bajaj M&M, Tata Sumo
Kinetic, Luna etc
Type of Retail Outlet
Company showroom, exclusive brand dealer outlet
Multinational brand dealer outlet
Dealer outlet near home/recommended
Dealer outlet with servicing facility
PROCESS OF DECISION MAKING
Making a decision is a rational and conscious process in which the consumer
evaluates each of the available alternatives to select the best amongst them.
Each decision you make involves an elaborate mental thought process, a degree
of active reasoning, though on the surface it may not always seen to be so.
For eg:- Daily Bread- Decision variable, brand quantity, retail outlet
Sofa set- Decision variable, far more in number
Readymade/ made to order
From shop/ to be built at home
Type of material and design
2. Alternative differentiation
3. Time pressure
Which influence the degree of active reasoning undertaken by the consumer in
his process of decision making.
When a product is perceived to be of great personal importance to the
customer, such as personal clothing, or its purchase involves a great deal of
money or risk viz jewellery, car , home, company shares the level of
involvement is likely to be very high the consumer is likely to spend a great deal
of time before arriving at the final decision. In contrast when buying items
which do not reflect much on the consumer’s personality or their purchase
involves small amounts of money or the risk associated with them is not high,
the degree of involvement of the consumer is likely to be low.
For eg:- toilet soap, tooth brush. Biscuits, shoe polish etc.
When we are under pressure to make a decision quickly we cannot afford to
spend a long time finding out about the various products or brands. We
probably buy whichever is readily available
For eg:- purchase of car tyre/tube under emergency on the road when it bursts
and purchase when we need to buy tyres.
When the consumer perceives that the various alternatives which are available
are very different from one another in terms of their features and benefits
offered, he is likely to spend more time in gathering information and evaluating
these different features.
On the other hand, in case of products which are not very different from one
another either in terms of their features or benefits offered, the consumer is
bound to perceive them as being almost the same and buy the first available
product/brand which satisfies his minimum expectations.
TYPES OF PURCHASE DECISION BEHAVIOR- THREE TYPES OF BUYING BEHAVIOR
Routinised response behavior
Limited problem solving
Extended problem solving
ROUTINISED RESPONSE BEHAVIOR (RRB)
This occurs when the consumer already has some experience of buying and
using the product. Consumers do not give much thought or time. When buying
such products and already have a preferred brand. The degree of involvement in
buying such products is low. Frequently purchased and low cost products such
as razor blades, coffee powder, tooth paste, soap, soft drinks etc fall in this
Marketers dealing in products involving RRB must ensure the satisfaction of
existing customers by maintaining consistent quality service and value.
LIMITED PROBLEM SOLVING (LPS)
In this type of buying behavior, the consumer is familiar with the product and
the various brands available, but has no established brand preferrance. The
consumer would like to gather additional information about the brands to
arrive at him brand decision.
For eg:- Branded refined oils (shopkeeper’s view)
LPS also takes place when a consumer encounters an unfamiliar brand in a
known product category. For eg:- Saffola
The marketer’s task in a situation where he is introducing a new brand in a well
known product category is to design a communication strategy that gives
complete information on all the attributes of the brand thus increasing the
consumer’s confidence and facilitating his/her purchase decision.
EXTENSIVE PROBLEM SOLVING (EPS)
EPS occurs when the consumer is encountering a new product category. He
needs information on both the product category as well as the various brands
available in it.
The marketing strategy for such buying behavior must be such that it facilitates
the consumer’s information gathering/learning process about the product
category and his own brand.
The marketer must be able to provide his consumer with a very specific/unique
set of positive attributes regarding his own brand so that the purchase decision
is made in his favor.
The concept of EPS is most applicable to new products. The product may be new
at the generic product concept level (magi noodles) or it may be an established
product concept but new for a particular consumer (tribal exposed to concept of
STAGES IN THE BUYER DECISION PROCESS
In making a purchase decision the consumer goes through the five stages of
1. Problem recognition
2. Pre-purchase information search
3. Evaluation of alternatives
4. Purchase decision
5. Post purchase behavior
However, in case of routine purchases, the consumer may skip the second &
third stages and straight away go the stage of purchase decision.
Problem recognition- the buying process starts with the buyer recognizing
a need or a problem
Pre-purchase information search- External & Internal
Internal- refers to recalling relevant information stored in the memory.
External- refers to deliberate and voluntary seeking of information,
recognized the product/brand under consideration which can be from-
1. Personal sources- family, friends, colleagues, neighbors
2. Commercial sources- advertisements, retailers, salesperson
3. Public sources- seeing others, consumer information centres
EVALUATION OF ALTERNATIVES
Commonly used criteria
Attitudes towards the different brands/alternatives under consideration
The stage of the buying decision process gives the marketer a chance to modify
his product offering in keeping with the relative importance attached to each
attribute by various consumer segments, altering beliefs and attitudes about his
own brand and calling attention to neglected product attributes.
Consumer end up buying a brand which is not his most preferred because of
Preferred brand not available
Attractive incentive on other brand
POST PURCHASE BEHAVIOR
After purchasing the product if consumer finds that its performance/utility
matches up to his expectation, satisfaction occurs.
Satisfaction will reinforce customer’s perceived favorable image of the brand
which can get extended to the entire range of products manufactured by the
Customer may also strongly recommend the brand to others. However, if the
product is not upto his expectation, dissatisfaction results. The customer may
decide to stop buying other products of the company and inform people known
to him/her about the poor quality performance of the product.