The document discusses various factors that influence consumer behavior, including internal psychological factors, social factors, cultural factors, economic factors, personal factors, and environmental factors. It provides detailed explanations of each factor and how they shape consumer decisions. Some key internal factors mentioned are motivation, perception, learning, beliefs, attitudes, and personality. Social factors discussed include family, reference groups, roles and status. Cultural influences incorporate culture, subculture and social class.

1. UNDERSTANDING
CONSUMER BEHAVIOUR

2. CHARACTERISTICS OF CONSUMER BEHAVIOUR
• It is the process by which individuals decide whether, what, when, from whom, where and how
much to buy
• It comprises both mental and physical activities of a consumer
• It covers both visible and invisible activities of a buyer
• It is very complex
• It is very dynamic

3. CHARACTERISTICS OF CONSUMER BEHAVIOUR
(CONTD.)
• It is influenced by internal and external factors
• It is an integral part of human behaviour
• It is the sum total of the behaviour of a number of persons
• It is to act differently at different times and often respond differently to the same
stimulus at different times
• It is to learn and thereby change attitudes and behaviour

4. IMPORTANCE OF THE STUDY OF CONSUMER BEHAVIOR
• Production Policies
• Price Policies
• Distribution Policies
• Sales Promotion Policies
• 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"

5. FACTORS INFLUENCING CONSUMER BEHAVIOUR
• The consumer behaviour or buyer behaviour is influenced
by several factors or forces.
• Internal or Psychological factors
• Social factors
• Cultural factors
• Economic factors
• Personal factors
• Environment factors
• Other factors

6. INTERNAL OR PSYCHOLOGICAL FACTORS
• Motivation: A need becomes a motive when it is aroused to a sufficient level of
intensity. The types of needs are:
• Biogenic needs
• Psychogenic needs
• Perception: Each sense feeds information to the brain constantly, and the brain
selects from the environment around the individual
• Learning: It involves changes in the behaviour of an individual arising from the past
practice or previous experience. Learning process results in habits, attitudes and
beliefs.

7. INTERNAL OR PSYCHOLOGICAL FACTORS (CONTD.)
• Beliefs & Attitudes: People through acting and learning, develop their beliefs and
attitudes, which, in turn, influence their buying behaviour. Attitudes could be
classified in terms of 4 functions:
• The utilitarian or instrumental function
• The ego-defensive function
• The value-expressive function
• The knowledge function

8. INTERNAL OR PSYCHOLOGICAL FACTORS (CONTD.)
• As per Fishbein attitude-toward object model, following are the strategies for
bringing attitude change:
• Changing the relative evaluation of attributes
• Changing brand beliefs
• Add a new salient belief
• Change the strength of a salient belief
• Change the evaluation of an existing belief
• Make an existing belief more salient
• Adding an attribute
• Changing the overall brand rating

9. INTERNAL OR PSYCHOLOGICAL FACTORS (CONTD.)
• Goals: These are the external objects towards which a motive is directed. The end
goals can be abstract or concrete.
• Heuristic: It includes simple 'if . . . then' decision-making rules which can be
established before the search procedure begins, which could be divided into three
categories:
• Search heuristics
• Evaluation heuristics
• Choice heuristics

10. INTERNAL OR PSYCHOLOGICAL FACTORS (CONTD.)
• Interrupt: These are the events, which prevent the consumer from following goal
hierarchy.
• Unexpected information, inconsistent with established beliefs
• Prominent environmental stimuli
• Affective states
• Conflicts
• Approach-approach conflicts
• Avoidance-avoidance conflicts
• Approach-avoidance conflicts
• Roles: These are the images People create and project of themselves to other people

11. INTERNAL OR PSYCHOLOGICAL FACTORS (CONTD.)
• Self-concept: It is the person's ideas and feelings about him or herself, which has four
attributes
• To be learned, not innate
• Stable and consistent
• Purposeful
• Unique to the individuals
• Risk and Uncertainty:
• Physical risk: The fear of injury from the product
• Financial risk: The fear of losing or wasting money
• Functional risk: The fear that the product will not serve the need
• Psychosocial risk: The fear of looking foolish

12. INTERNAL OR PSYCHOLOGICAL FACTORS (CONTD.)
• Personality: It is the collection of individual characteristics that make a person unique, and which
control an individual’s responses and relationships with the external environment. Four basic
approaches to studying personality are:
• The psychoanalytic approach
• Typology
• Trait and factor theories
• Psychographic

13. SOCIAL FACTORS
• Family: An individual normally lives through two families:
• Family of orientation
• Family of procreation
The family influence on the buying behaviour of a member may be found in two ways
• On the individual personality, characteristics, attitudes and
evaluation criteria, and
• On the decision-making process involved in the purchase of
goods and services
The family is distinguished by the following characteristics:
• Face-to-face contact
• Shared consumption
• Subordination of individual needs
• Purchasing agent

14. STAGE OF FAMILY LIFE CYCLE
• Single/Bachelor stage
• Newly married couples
• Full nest I
• Full nest II
• Full nest III
• Empty nest I
• Empty nest II
• Solitary survivor
• Retired solitary survivor

15. INFLUENCE OF CHILDREN ON BUYING DECISIONS
• Children's development as consumers goes through five stages:
• Observing
• Making requests
• Making selections
• Making assisted purchases
• Making independent purchases

16. MECHANISMS OF PERSONAL INFLUENCE
• Trickle-down theory
• Two-step flow theory

17. MULTISTAGE INTERACTION MODEL

18. THE REASONS OF WHY INFLUENCERS PASS ON
THEIR KNOWLEDGE
• Involvement
• Self-enhancement
• Concern for others
• Message intrigue
• Dissonance reduction

19. SOCIAL FACTORS (CONTD.)
• Reference group: A group is two or more persons who share a set of norms and whose
relationship makes their behaviour interdependent. A reference group is a group of people
with whom an individual associates. Various reference groups are:
• Membership or contractual groups
• Primary or normative groups
• Secondary groups
• Aspirational groups
• Dissociative or avoidance groups
• Formal groups
• Informal groups
• Automatic groups
• Indirect groups
• Comparative groups
• Disclaiment group
• Contactual group

20. SOCIAL FACTORS (CONTD.)
• Roles and status: A person participates in many groups like family, clubs, and
organizations. People choose products that communicate their role and status in
society. Marketers must be aware of the status symbol potential of products and
brands.

21. CULTURAL FACTORS
• Culture: It is a set of beliefs and values that are shared by most people within a
group. It can change over a period of time, although such changes tend to be slow,
since culture is deeply built into people's behaviour. It influences considerably the
pattern of consumption and the pattern of decision-making.
• Sub-Culture: Each culture consists of smaller sub-cultures that provide more
specific identification and socialization for their members. Sub-culture refers to a
set of beliefs shared by a subgroup of the main culture, which include nationalities,
religions, racial groups and geographic regions.

22. CULTURAL FACTORS (CONTD.)
• Social class: Social class is relatively a permanent and ordered division in a society
whose members share similar value, interest and behaviour. Social class is not
determined by a single factor, such as income but it is measured as a combination of
various factors, such as income, occupation, education, authority, power, property,
ownership, life styles, consumption, pattern etc.

23. ECONOMIC FACTORS
• Personal income
• Family income
• Income expectations
• Savings
• Liquid assets of the consumer
• Consumer credit
• Other economic factors

24. PERSONAL FACTORS
• Age: People buy different products at their different stages of cycle. Their taste,
preference, etc also change with change in life cycle.
• Occupation: The life styles and buying considerations and decisions differ widely
according to the nature of the occupation. For instance, the buying of a doctor can be
easily differentiated from that of a lawyer, teacher, clerk, businessman, landlord, etc.
So, the marketing managers have to design different marketing strategies to suit the
buying motives of different occupational groups.

25. PERSONAL FACTORS (CONTD.)
• Income: Income is an important source of purchasing power. So, buying pattern of
people differs with different levels of income.
• Life Style: Life style to a person's pattern or way of living as expressed in his
activities, interests and opinions that portrays the “whole person” interacting with
the environment. Marketing managers have to design different marketing strategies
to suit the life styles of the consumers.

26. ENVIRONMENTAL FACTORS
• Physical surroundings: These include geographical location, décor, sounds, smells,
colour, lighting, weather and the layout of the product displays surrounding the
product. The physical surroundings affect the mood of the individual and therefore will
occur individual’s attitude towards the product.
• Social surroundings: These are concerned with presence (or absence) of other people
in the situation. The macro social environment refers to the interaction between large
groups of people (social and cultural factors) whereas micro social environment is
concerned with psychological and personal factors.

27. ENVIRONMENTAL FACTORS (CONTD.)
• Task: This comprises the particular goals and objectives that the consumer has at the
time.
• Antecedent state: It is the temporary mood or condition that the consumer brings to
the situation: tiredness, excitement, lack of cash, or perhaps a new purchase, which
needs an accessory. Antecedent states need to be distinguished from states that occur
in response to the purchasing situation, personality in that they are temporary.

28. ENVIRONMENTAL FACTORS (CONTD.)
• Time: This is concerned with the moment the behaviour occurs.
• Time of day
• Season of the year
• Day of the week
• Elapsed time

29. TYPE OF SITUATIONS CONSUMERS FACE
• Information acquisition or communications situations: the consumer is sometimes
overloaded with information and finds it difficult to sort out the wheat from the
chaff.
• Shopping situations: These refer to the retail environment. This can range from a
pedestrianized shopping street to a high-fashion supermarket area. Each has its own
atmosphere and characteristics, and each will generate specific consumer behaviour.
• Purchasing situations: These refer to the retail environment within the shops
themselves. The factors included in the purchasing situation range from the social
(the attitude of the shop assistants) to the physical (the décor and layout of the
shop).

30. TYPE OF SITUATIONS CONSUMERS FACE (CONTD.)
• Consumption situations: These surround the actual use or consumption of the
products. In most cases, marketers have no direct control over the consumption
situation, and can only make suggestions through advertising.
• Disposition situations: These are the situations under which consumers dispose of
the used-up and unwanted products. In some cases these products are simply
thrown away, but in others the consumer gives the product to a charity shop or
trades it in for a newer model

31. TYPE OF SITUATIONS CONSUMERS FACE (CONTD.)
• Person-situation interface: This refers to the synergy between the person and the
situation.
• Store Atmospherics:
• Shape the direction and duration of consumers' attention
• Express various aspects of the shop to its customers
• Convey emotions such as pleasure and interest

32. OTHER FACTORS
• Legal Factors: These include taxes, tax laws, etc. If the taxes are low and legal
restrictions are less, consumer expenditure will be more. On the other hand, if
taxes are high and restrictions on the purchases are more, consumer expenditure
will be less.
• Technology: Consumers usually prefer more up-to-date and sophisticated goods.
Technological advances contribute to the production and availability of modern
goods.

33. OTHER FACTORS
• Legal Factors: In every country, consumer expenditure is governed by legal factors
like taxes, tax laws, etc. If the taxes are low and legal restrictions are less, consumer
expenditure will be more. On the other hand, if taxes are high and restrictions on
the purchases are more, consumer expenditure will be less.
• Technology: Consumers, usually, prefer more up-to-date and sophisticated goods.
Technological advances contribute to the production and availability of modern
goods. As more and more modern goods are released to the market, the more will
be the consumer expenditure on those goods. So technological logical advances
also influence the buying behaviour of consumers.

34. OTHER FACTORS (CONTD.)
• Ethical Considerations: Ethical considerations (i.e. the sense of morality) have an important effect on the
buying behaviour of the consumers. For instance, if people are religious and spiritual minded, they spend
less on modern comforts and luxuries. On the other hand, if people are educated, civilised and advanced,
they spend more on comforts and luxuries.
• Political Factors: Political factors have an important impact on the pattern of consumption. In a controlled
economy, the consumption pattern is determined by. But in a the Government free capitalistic economy,
consumers have economic freedom and wider choice and are free to spend their Income in any way they
like.

35. BUYING ROLES
• Initiator: A person who first suggests the idea of buying the particular product or
service.
• Influencer: A person whose view or advice influences the decision.
• Decider: A person who decides on any component of a buying decision; whether to
buy, what to buy, how to buy, or where to buyer Behaviour
• Buyer: The person who makes the actual purchase.
• User: A person who consumes or uses the product or service.

36. SOURCES INFLUENCING LEVELS OF INVOLVEMENT
• Personal sources: Also called intrinsic self-relevance, these are the means-end
knowledge stored in the individual's memory, and area influenced both by the person
and by the product. Consumers who believe that the attributes of the product link
strongly to important end goals are likely to be more heavily involved with the
product.
• Situational sources: These are concerned with aspects of the immediate social or
physical surroundings of the consumer.
• A change in social circumstances could increase involvement
• Physical environment issues are about the circumstances which arise in the surrounding
environment rather than those involving people.

37. RELATIONSHIP BETWEEN CONSUMER
CHARACTERISTICS AND PRODUCT

38. CATEGORIES OF CONSUMER AS PER INVOLVEMENT
• Brand loyalists: These people tend to have strong, affective link to the product category to the
provision of personally relevant consequences. They go for the 'best brand' for their needs, but
also feel that the product category itself is an important part of their lives.
• Routine brand buyers: These people have low personal sources of involvement, but have a
favorite brand. They are more interested in the types of consequence associated with regular
brand purchases. They are not necessarily looking for the 'best brand'; only a satisfactory one
will do.

39. CATEGORIES OF CONSUMER AS PER INVOLVEMENT (CONTD.)
• Information seekers: These people have positive means-end information about the product
category, but no one brand stands out as superior. They use a lot of information to help them
find a suitable brand from within the product category.
• Brand switchers: These people have low brand loyalty with low personal involvement. They do
not have a strong relationship with the product category, as a result of which they are easily
affected by environmental factors such as sales promotions.

40. TYPES OF CONSUMER BUYING BEHAVIOUR AS PER ASSAEL

41. TYPES OF CONSUMER BUYING BEHAVIOUR AS PER ASSAEL (CONTD.)
• Complex Buying Behaviour: Consumers exhibit this when they are aware of significant differences among brands
and highly involved in a purchase which occurs when the product is expensive, bought infrequently, risky and
highly self-expressive.
• Dissonance-Reducing Buying Behaviour: Here, the consumer is highly, involved in a purchase but sees little
difference in the brands. The consumer might experience post-purchase dissonance that stems from noticing
certain disquieting features of the product or hearing favourable things about other brands. The consumer will be
alert to information that might justify his or her decision.

42. TYPES OF CONSUMER BUYING BEHAVIOUR AS PER ASSAEL (CONTD.)
• Variety-Seeking Buying Behaviour: Buying situations are characterised by low consumer
involvement but significant brand differences. Consumers are often observed to do a lot of brand
switching.
• Habitual Buying Behaviour: Purchase is made under conditions of low consumer involvement and
the absence of significant brand differences. Consumers do not search extensively for information
about the brands and are passive recipients of information

43. CONSUMER PURCHASE DECISION PROCESS
• In order to understand the purchase decision process, one has to be aware of the following
questions:
• What is to be purchased?
• What is the objective to purchase?
• Who is purchasing?
• How is the product purchased?
• On what occasion, is the product purchased?

44. CONSUMER PURCHASE DECISION PROCESS (CONTD.)
• The John Dewey model outlined the following five stages of decision-making:
• A difficulty is felt
• The difficulty is located and defined
• Possible solutions are suggested
• Consequences are considered
• A solution is accepted

45. CONSUMER PURCHASE DECISION PROCESS (CONTD.)
• Robinson, Faris and Wind proposed a new model of purchase-decision process
comprising of 5 steps:

46. CONSUMER PURCHASE DECISION PROCESS (CONTD.)
1st Step: Problem or Need Recognition
The buying process starts when the buyer recognises a problem or need, which can be triggered by
internal stimuli (hunger, thirst) or external stimuli (shop visit, neighbour's purchase)
2nd Step: Information Search
Having recognised the need, the consumers undertake a series of pre-purchase activities. The information
search comes from two sources:
• Internal search (such as from memory)
• External search (such as from outside sources)

47. CONSUMER PURCHASE DECISION PROCESS (CONTD.)
3rd Step: Evaluation of Alternatives
Consumers make a choice from the consideration set (the group of products from which
the final choice is to be made) with the help of decision rule or heuristic.
4th Step: Purchase Decision

48. CONSUMER PURCHASE DECISION PROCESS (CONTD.)
5th Step: Post-Purchase Behaviour
After purchasing the product, the consumers experience some level of
satisfaction or dissatisfaction, which would influence their post-purchase
actions and product use.

49. BUYING MOTIVES
• Primary Motives: The reason to purchase a product class
• Secondary Motives: The reason to purchase a particular brand
• Rational Motives: The reasons based on logical assessment of buyer’s situation
• Emotional Motives: The reasons related to consumer’s feelings about the brand
• Conscious Motives: The reasons connected with awareness
• Dormant Motives: The reasons below the conscious level

50. MODEL OF MOTIVATION DEVELOPED FROM PSYCHOLOGICAL EVENTS

51. THE CLASSIFICATION OF BUYING MOTIVES

52. THE CLASSIFICATION OF BUYING MOTIVES (CONTD.)
Product Buying Motives
• These refer to those influences and reasons, which prompt a buyer to choose a
particular product in preference to other products. They include:
• Physical attraction of the product such as design, shape, dimension, size, colour,
package, performance, price etc.
• Psychological attraction of the product such as the enhancement of the social prestige
or status of the purchaser through its possession
• Product buying motives may be sub-divided into two groups:
• Emotional product buying motives
• Rational product buying motives

53. EMOTIONAL PRODUCT BUYING MOTIVES
• A buyer decides to purchase a product without thinking over the matter logically and
carefully, because of:
• Pride or Prestige
• Emulation or Imitation
• Affection
• Comfort or desire for comfort
• Sex appeal or sexual attractions
• Ambition
• Desire for distinctiveness or individuality
• Desire for recreation or pleasure
• Hunger and thirst
• Habit

54. RATIONAL PRODUCT BUYING MOTIVES
• A buyer decides to purchase a product after careful consideration (i.e. after thinking
over the matter consciously and logically), because of:
• Safety or Security
• Economy
• Relatively low price
• Suitability
• Utility or versatility
• Durability of the product
• Convenience of the product

55. THE CLASSIFICATION OF BUYING MOTIVES (CONTD.)
Patronage Buying Motives
• These refer to those considerations or reasons, which prompt a buyer to buy the
product wanted by him from a particular shop in preference to other shops.
• Product buying motives may be sub-divided into two groups:
• Emotional patronage buying motives
• Rational patronage buying motives

56. EMOTIONAL PATRONAGE BUYING MOTIVES
• A buyer patronises a shop (i.e. purchases the things only from a particular shop)
without reasoning, because of:
• Appearance of the shop
• Display of goods in the shop
• Recommendation of others
• Imitation
• Prestige
• Habit

57. RATIONAL PATRONAGE BUYING MOTIVES
• A buyer patronises a shop after careful consideration (i.e. after much logical
reasoning and careful thinking), because of:
• Convenience
• Low price charged by the shop
• Credit facilities offered
• Services offered
• Efficiency of salesmen
• Wide choice
• Treatment
• Reputation of the shop

58. BUYING PATTERNS
• In addition of trying to understand why people behave as they do (buying motives),
it is also important to monitor what they do, in particular what they buy, how often,
where to buy and so on.
• Ehrenberg has found out that in ‘stationary’ markets, in which sales and brand shares
are stable, regular buying patterns can be discerned and can be described using the
proportion of the population buying in period and the average number of times they
buy. The number of repeat buyers of each brand in the next and subsequent periods
can then be predicted.

59. CLASSIFICATION OF CONSUMER DECISION RULES

60. COMPENSATORY DECISION RULE
• The consumers evaluate brand options for each relevant attribute and compute a
weighted or summated score allowing trade-offs, so that a weakness in one area can be
compensated for in another. There are two variations of this rule:
• Simple additive rule: It involves a straight tally of the product's
positive aspects, and a comparison of this tally with the tally for
other products.
• Weighted additive rule: The consumers do not give equal
importance to all the attributes in consideration and assign weights
accordingly

61. NON-COMPENSATORY DECISION RULE
• These rules do not allow consumers to balance positive evaluations of a brand on one
attribute against a negative evaluation on some other attribute. There are three
variations of this rule:
• Conjunctive decision rule
• Disjunctive rule
• Lexicographic decision rule

62. NON-COMPENSATORY DECISION RULE (CONTD.)
Conjunctive Decision Rule
The consumers establish a separate, minimally acceptable level as a cut-off point for each
attribute. If any particular brand falls below the cut-off point on any one attribute, the
brand is eliminated from further consideration. Because the conjunctive rule can result in
several acceptable alternatives, it becomes necessary in such cases for the consumer to
apply an additional decision rule to arrive at a final selection.

63. NON-COMPENSATORY DECISION RULE (CONTD.)
Disjunctive Decision Rule
This is the ‘mirror image’ of the conjunctive rule, where the consumers also establish a
separate, minimally acceptable level as the cut-off point for each attribute, which may be
higher than the one normally established for conjunctive rule. If a brand meets or exceeds
the cut-off established for any one attribute, it is accepted.

64. NON-COMPENSATORY DECISION RULE (CONTD.)
Lexicographic Decision Rule
The consumers first rank the attributes in terms of perceived relevance or importance.
Then they compare the various alternatives in terms of the single attribute that is
considered most important. If one brand scores sufficiently high on this top-ranked
attribute regardless of the score on any of the other attributes, it is selected and the
process ends. When there are two or more surviving brand alternatives, the process is
repeated with the second highest-ranked attribute and so on, until reaching at a point
where one of the brands is selected since it exceed the others on a particular attribute.

65. BUYER BEHAVIOUR MODELS
• The Economic Model: The buyer is a rational man whose buying decisions are totally
governed by the concept of utility.
• The Learning Model: Buyer behaviour can be influenced by manipulating drives, stimuli
and responses of the buyer.
• The Psychoanalytical Model: The individual consumer has a complex set of deep-seated
motives, which drive him or her towards certain buying decisions.
• The Sociological Model: The individual buyer is influenced by society by intimate groups
as well as social classes.

66. BUYER BEHAVIOUR MODELS (CONTD.)
• The Stochastic model: This model is based on the assumption that earlier observed
behaviour forms a valid basis for predicting the future.
• The Systems Model: It is systematic buyer behaviour model totally from the marketing
man's standpoint, where the human being is analysed as a system with stimuli as the
input to the system and behaviour as the output of the system. Two important models
are:
• The Nicosia model
• The Howard and Sheth model