MMUnit IV.pdf

S.S . JAIN SUBODH MANAGEMENT INSTITUTE, M-104, Unit IV Page 1
M-104
Unit IV
CONSUMER BUYING BEHAVIOR
Consumer buying behavior: Meaning and Definition:
Buyer behavior refers to the decision and acts people undertake to buy products or services for
individual or group use. It’s synonymous with the term “consumer buying behavior,” which often applies
to individual customers in contrast to businesses. Buyer behavior is the driving force behind any
marketing process.
The term consumer behavior, individual buyer behavior, end-user behavior, and consumer buying
behavior all stand for the same.
Consumer buying behavior is the sum total of a consumer's attitudes, preferences, intentions, and
decisions regarding the consumer's behavior in the marketplace when purchasing a product or service.
The study of consumer behavior draws upon social science disciplines of anthropology, psychology,
sociology, and economics.
Consumer behavior is the study of how individual customers, groups or organizations select, buy, use,
and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the
consumers in the marketplace and the underlying motives for those actions.
Consumer behavior is the study of consumers and the processes they use to choose, use (consume), and
dispose of products and services, including consumers’ emotional, mental, and behavioral responses.
Consumer behavior incorporates ideas from several sciences including psychology, biology, chemistry,
and economics.
Definition:
According to Frederick Webster- “Consumer buying behavior is all psychological, social and
physical behavior of potential customers as they become aware of, evaluate, purchase, consume
and tell other people about products and services.”
According to Belch and Belch “Consumer behavior is the process and activities people engage in
when searching for, selecting , purchasing, using, evaluating and disposing of products and
services so as to satisfy their needs and desires".
Aspects of Consumer Behavior:
Characteristics of Consumer Behavior:

Systematic process
Influenced by various factors
Varies from consumer to consumer
Different for different products
Vary across regions
Vital for marketers
Reflect status
Result in spread effect
Undergoes a change
Importance:
Production policies
Price policies
Decision regarding channels of distribution
Decision regarding sales promotion
Exploiting marketing opportunities
Rapid introduction of new products
Implementing the "Marketing concept"
Scope of Consumer Behavior:
Demand Forecasting
Designing Marketing Mix
Advertising
Production policies
Consumer Education
Analyzing Marketing Opportunities
Types of consumer behavior:
There are four main types of consumer behavior:

1. Complex buying behavior: This type of behavior is encountered when consumers are buying an
expensive, infrequently bought product. They are highly involved in the purchase process and consumers’
research before committing to invest. Imagine buying a house or a car; these are an example of a complex
buying behavior.
2. Dissonance-reducing buying behavior: The consumer is highly involved in the purchase process but
has difficulties determining the differences between brands. ‘Dissonance’ can occur when the consumer
worries that they will regret their choice.
3. Habitual buying behavior: Habitual purchases are characterized by the fact that the consumer has
very little involvement in the product or brand category. Imagine grocery shopping: you go to the store
and buy your preferred type of bread. You are exhibiting a habitual pattern, not strong brand loyalty.
4. Variety seeking behavior: In this situation, a consumer purchases a different product not because they
weren’t satisfied with the previous one, but because they seek variety. Like when you are trying out new
shower gel scents, shampoos, face creams etc.
Factors affecting Consumer Behavior:

Cultural Factors:
Culture refers to people’s shared customs, beliefs, values and artifacts that are transmitted from
generation to generation. "Culture encompasses religion, food, what we wear, how we wear it, our
language, marriage, music, what we believe is right or wrong, how we sit at the table, how we greet
visitors, how we behave with loved ones, and a million other things,"
Subcultures include nationalities, religions, racial groups, and geographic regions.
Social class is relatively homogeneous and enduring divisions in a society, hierarchically ordered and
with members who share similar values, interests and behavior.

Social Factors:
Reference Groups: A person’s reference groups are all the groups that have direct or indirect influence
on their attitudes and behavior.
An opinion leader is the person who offers informal advice or information about a specific product or
product category.
Family:
Role and Status:
Following are the roles in the family decision making process −
• Primary group
• Secondary group
Membership
groups
• Aspirational group
• Dissociative group
Non-membership
groups
Family of
Orientation
Family of
Procreation
• Consists of parents
and siblings
• Consists of person’s
spouse and children

Influencers − Influencers are the ones who give ideas or information about the product or service
to the consumer.
Gate Keepers − Gatekeepers are the family members who usually panel the information. They
can be our parents or siblings too who can in any form provide us the information about the
product.
Decision Makers − Family or our parents who usually have the power to take decisions on our
behalf are the decision makers. After the complete the research they may decide to purchase the
particular or dispose it.
Buyers − Buyer is the one who actually makes the purchase of the product.
End Users − The person who finally uses the product or consumes the service is the ultimate
consumer also called as End user as per the context.
Personal factors:
Age and Life Cycle stage
1. Bachelor Stage: Young, single people not living at home
2. Newly married couples: young , no children
3. Full nest I: child age under 6
4. Full nest II: child age over than 6
5. Full nest III: Adult married couples with dependent children
6. Empty nest I: Older married couples, no children living with them
7. Empty nest II : Older married, head retired
8. Solitary Survivor
Life Style:
A lifestyle is a person’s pattern of living in the world as expressed in activities, interests and
opinions.
(VALS Model)
Principle oriented
Status oriented
Action oriented
Personality and Self-concept:
Personality signifies the inner psychological characteristics that reflect how a person reacts to his
environment. Personality shows the individual choices for various products and brands.
Self-concept refers to `the attitude a person holds toward him--or herself'.

Psychological factors:
a) Motivation:
b) Learning
It induces changes in behavior arising from experience.
Learning process involves three steps:
Drive : strong internal stimuli impelling action.
Cues: Weak stimuli determining when, where and how the buyer will respond
Response: action
c) Perception It is the process by which we select, organize, and interpret information inputs to
create a meaningful picture of the world.
Perception processes:
Selective attention
Selective distortion
Selective retention
d) Beliefs and attitudes
A belief is a descriptive thought that a person holds about something.
A attitude is a person’s enduring favorable or unfavorable evaluations, emotional feelings, and
action tendencies toward some object or ideas.
Buying Motives:
A motive is the inner state that moves, or prompts a person to action. In the words of S. A. Sherlekar, “A
buying motive is the reason why a person buys a particular product.

One of the classifications of motives which are widely accepted is by Ramaswamy and Nama
Kumari as:
1. Product Motives
2. Patronage Motives
1. Product Motives:
Product motives are those motives which are related to the product that induce the consumer to buy the
product. Product motive may relate to different attributes of the product.
It can be further classified as:
I. Emotional product motives
II. Rational product motives
III. Operational product motives
IV. Socio-psychological motives
Emotional product motives are those which invoke a person emotionally so that he buys the product,
without analyzing and evaluating its various attributes. Examples of emotional product motives are love,
pride fear, comfort, ego, habits etc. Here consumer has the motive of only buying the product because he
is emotionally attached to it. Other factors are absent here.
As against the emotional motives, there are rational motives. These are the motives which are concerned
with the logical analysis of the various aspect of the product. Here the consumer makes a rational
evaluation of different product attributes so as to determine its want satisfying potential, only then he
buys the product. The various utility attributes of the product, credit facilities, transportation facilities etc.
are included here.
On the basis of functions performed and socio-psychological benefit provided, buying motives are
classified as operational product motive and socio-psychological product motives. Operational product
motives refer to the satisfaction derived from the function or physical utility of the product. More
efficiently the functions are performed, and more are the functions performed, better are the chances of
product being purchased.
Socio- psychological motives are different from operational motives. Here the consumer buys the product
because of the prestige attached to it. The product here is, evaluated on the basis of its social status and
prestige. It must satisfy the psychological need of the buyer of having a product which is perceived high
by the society.
2. Patronage Motive:
Patronages motives refers to those motives which make a consumer buy from a particular shop.

Many time consumers have reasons to buy the goods from a particular shop only. The patronage of that
shop attracts him. Patronage motive may also be classified as emotional patronage motive and rational
patronage motive.
Many times the buyer buy goods from a specific shop for reason not clear to them also. Such motives are
called emotional patronage motives. Here the reason for buying from that shop is purely subjective. Each
buyer may have his own personal reason. On the other hand rational patronage motive are the logical
reason that a consumer has for buying the goods from a particular shop only.
Here the consumer is aware of advantages of that shop in terms of wide variety of goods, wide selection,
good quality, easy availability, good behavior of salesman, after sale services etc. and therefore he is
attached to the shop. Thus, we see that motives have significant influence on the consumer behavior. A
marketer should therefore develop a clear understanding of the product and patronage buying motives
before he goes to attract the customers and develop their loyalty.
According to Mc Carthy, buying motives are of eight types:
1. Satisfaction of sense
2. Preservation of species
3. Fear
4. Rest and recreation
5. Pride
6. Sociability
7. Striving
8. Curiosity
Consumer Decision making:
The Consumer or Buyer Decision Making Process is the method used by marketers to identify and track
the decision making process of a customer journey from start to finish.
The consumer decision-making process can seem mysterious, but all consumers go through basic steps
when making a purchase to determine what products and services will best fit their needs.
Consumer decision making process involves the consumers to identify their needs, gather information,
evaluate alternatives and then make their buying decision.
The buying behavior model is one method used by marketers for identifying and tracing the decision
making process of a customer from the start to the end. According to Philip Kotler, the typical buying
process involves five stages the consumer passes through described as under:
i) Problem Identification: During need or problem recognition, the consumer recognizes a
problem or need that could be satisfied by a product or service in the market. Problem
Recognition is the first stage of the buyer decision process. At this stage, the consumer
recognizes a need or problem. The buyer feels a difference between his or her actual state and
some desired state.

ii) Information Search: Once the need is recognized, the consumer is aroused to seek more
information and moves into the information search stage. The second stage of the purchasing
process is searching for information. After the recognition of needs, the consumers try to find
goods for satisfying such needs. They search for information about the goods they want.
iii) Evaluation of Alternatives: With the information in hand, the consumer proceeds to
alternative evaluation, during which the information is used to evaluate” brands in the choice
set. Evaluation of alternatives is the third stage of the buying process. Various points of
information collected from different sources are used in evaluating different alternatives and
their attractiveness. While evaluating goods and services, different consumers use different
bases.
iv) Purchase Decision: After the alternatives have been evaluated, consumers take the decision to
purchase products and services. They decide to buy the best brand. But their decision is
influenced by others’ attitudes and situational factors.
v) Post-purchase Evaluation: In the final stage of the buyer decision process, post purchase
behavior, the consumer takes action based on satisfaction or dissatisfaction. In this stage, the
consumer determines if they are satisfied or dissatisfied with the purchasing outcome. Here is
where cognitive dissonance occurs, “Did I make the right decision.” Consumers go through
the 5 stages of the buyer decision process in taking the decision to purchase any goods or
services.
Cognitive Dissonance:
Customer post-purchase dissonance is one of the common issues faced by most of the marketers. It occurs
when your customers become dissatisfied with the product they purchased from your store.
Cognitive dissonance occurs when tension arises between a person's attitudes or beliefs and a decision
that contradicts those pre-existing modes of thinking. The psychological phenomenon also occurs when
a person chooses between two equally attractive or equally unappealing options. According to the
Business Dictionary's website, the most common example of cognitive dissonance in the business
world is the occurrence of "buyer's remorse." This happens when a consumer makes a decision to
purchase an item and, shortly after, experiences guilt over the choice, wondering if the other equally
appealing item might have brought greater satisfaction.
Cognitive dissonance can occur in many areas of life, but it is particularly evident in situations where an
individual's behavior conflicts with beliefs that are integral to his or her self-identity. For example,
consider a situation in which a man who places a value on being environmentally responsible just
purchased a new car that he later discovers does not get great gas mileage.
The conflict
It is important for the man to take care of the environment.
He is driving a car that is not environmentally-friendly.
In order to reduce this dissonance between belief and behavior, he has a few difference choices. He can
sell the car and purchase another one that gets better gas mileage or he can reduce his emphasis on
environmental-responsibility. In the case of the second option, his dissonance could be further minimized
by engaging in actions that reduce the impact of driving a gas-guzzling vehicle, such as utilizing public

transportation more frequently or riding his bike to work on occasion. A more common example of
cognitive dissonance occurs in the purchasing decisions we make on a regular basis. Most people want to
hold the belief that they make good choices. When a product or item we purchase turns out badly, it
conflicts with our previously existing belief about our decision-making abilities.
Consumer behavior models:
The different approaches have been used to analyze consumer behavior. Many models are proposed to
investigate consumer behavior classified as traditional and contemporary models.
TRADITIONAL MODELS
a) Economic model: The economic model of consumer behavior focuses on the idea that a
consumer's buying pattern is based on the idea of getting the most benefits while minimizing
costs. Thus, one can predict consumer behavior based on economic indicators such as the
consumer's purchasing power and the price of competitive products. For instance, a consumer
will buy a similar product that is being offered at a lower price to maximize the benefits; an
increase in a consumer's purchasing power will allow him to increase the quantity of the products
he is purchasing.
b) Learning model: This model is based on the idea that consumer behavior is governed by the
need to satisfy basic and learned needs. Basic needs include food, clothing and shelter, while
learned needs include fear and guilt. Thus, a consumer will have a tendency to buy things that
will satisfy their needs and provide satisfaction. A hungry customer may pass up on buying a nice
piece of jewelry to buy some food, but will later go back to purchase the jewelry once her hunger
is satisfied.

c) Psychoanalytic model: The psychoanalytical model takes into consideration the fact that
consumer behavior is influenced by both the conscious and the subconscious mind. The three
levels of consciousness discussed by Sigmund Freud (id, ego and superego) all work to influence
one's buying decisions and behaviors. A hidden symbol in a company's name or logo may have an
effect on a person's subconscious mind and may influence him to buy that product instead of a
similar product from another company.
d) Sociological model: The sociological model primarily considers the idea that a consumer's
buying pattern is based on his role and influence in the society. A consumer's behavior may also
be influenced by the people she associates with and the culture that her society exhibits. For
instance, a manager and an employee may have different buying behaviors given their respective
roles in the company they work for, but if they live in the same community or attend the same
church, they may buy products from the same company or brand.
II. Contemporary models
The important contemporary models of consumer behavior are:
a) Engel-Kollat-Blackwell Model
b) Nicosia Model
c) Stimulus-Response Model
d) Howard-Sheth model
[A] Engel-Kollat-Blackwell Model:
The Engel Kollat Blackwell Model of Consumer Behavior was created to describe the increasing, fast-
growing body of knowledge concerning consumer behavior. This model, like in other models, has gone
through many revisions to improve its descriptive ability of the basic relationships between components
and sub-components.
The Engel Kollat Blackwell Model of Consumer Behavior or consists of four distinct stages;
1. Information Input Stage: At this stage the consumer gets information from marketing and non-
marketing sources, which also influence the problem recognition stage of the decision-making process. If
the consumer still does not arrive to a specific decision, the search for external information will be
activated in order to arrive to a choice or in some cases if the consumer experience dissonance because
the selected alternative is less satisfactory than expected.
2. Information Processing Stage: This stage consists of the consumer’s exposure, attention,
perception, acceptance, and retention of incoming information. The consumer must first be
exposed to the message, allocate space for this information, interpret the stimuli, and retain the
message by transferring the input to long-term memory.
3. Decision Process Stage: The central focus of the model is on five basic decision-process stages:
Problem recognition, search for alternatives, alternate evaluation (during which beliefs may lead
to the formation of attitudes, which in turn may result in a purchase intention) purchase, and
outcomes. But it is not necessary for every consumer to go through all these stages; it depends on
whether it is an extended or a routine problem-solving behavior.
4. Variables Influencing the Decision Process: This stage consists of individual and
environmental influences that affect all five stages of the decision process. Individual
characteristics include motives, values, lifestyle, and personality; the social influences are culture,
reference groups, and family. Situational influences, such as a consumer’s financial condition,
also influence the decision process.

[B]Nicosia Model:
Nicosia Model of Consumer Behavior was developed in 1966, by Professor Francesco M. Nicosia, an
expert in consumer motivation and behavior. This model focuses on the relationship between the firm
and its potential consumers. The model suggests that messages from the firm (advertisements) first
influences the predisposition of the consumer towards the product or service. Based on the situation, the
consumer will have a certain attitude towards the product. This may result in a search for the product or
an evaluation of the product attributes by the consumer. If the above step satisfies the consumer, it may
result in a positive response, with a decision to buy the product otherwise the reverse may occur. Looking
to the model we will find that the firm and the consumer are connected with each other, the firm tries to
influence the consumer and the consumer is influencing the firm by his decision.
The Nicosia model of Consumer Behavior is divided into four major fields:
1. Field 1: The firm’s attributes and the consumer’s attributes. The first field is divided into two
subfields. The first subfield deals with the firm’s marketing environment and communication efforts that
affect consumer attitudes, the competitive environment, and characteristics of target market. Subfield two
specifies the consumer characteristics e.g., experience, personality, and how he perceives the promotional
idea toward the product in this stage the consumer forms his attitude toward the firm’s product based on
his interpretation of the message.
2. Field 2: Search and evaluation. The consumer will start to search for other firm’s brand and evaluate the
firm’s brand in comparison with alternate brands. In this case the firm motivates the consumer to
purchase its brands.
3. Field 3: The act of the purchase. The result of motivation will arise by convincing the consumer to
purchase the firm products from a specific retailer.
4. Field 4: Feedback of sales results. This model analyses the feedback of both the firm and the consumer
after purchasing the product. The firm will benefit from its sales data as a feedback, and the consumer
will use his experience with the product affects the individual’s attitude and predisposition’s concerning
future messages from the firm.

[C] Howard Sheth model:
The Howard Sheth Model is an approach for analyzing the combined impact of the social, psychological
and marketing factors on the buying behaviour or preference of the consumers and the industrial buyers
into a logical order of information processing.
John Howard and Jagadish Sheth introduced the Howard Sheth Model in the year 1969. The concept was
published in their book ‘The Theory of Buyer Behaviour’.
Three Levels of Decision-Making in Howard Sheth Model
The model has described the three significant stages of the buyer’s decision-making or selection of a
particular brand. Let us now discuss each of these in details below:
a) Extensive Problem Solving
This is the initial stage of decision-making, where the buyer is new to the market. He/she has no or little
information about the brands and has no preference for a particular product or service. Thus, a consumer
is an information seeker at this level, who checks out different brands available in the market, before
making a buying decision.
b) Limited Problem Solving
At this level, the buyer has inadequate or incomplete information about the product, market or the brands
operating in it. Sometimes the buyer is confused among the various alternatives. Therefore, to make a
buying decision, he/she look for a comparative study of the different brands and the products available in
the market.

c) Routinized Response Behavior
The habitual response behavior stage is where the buyer is entirely aware of the products offered by
different brands and the features, pros and cons of each product. He/she is capable of evaluating and
comparing the multiple options available in the market.Here, the buyer decides in advance, which product
is to be purchased.
Variables of Howard Sheth Model
Beginning with the stage of extensive problem solving, the buyer slowly converts into a regular customer
of the organization, at the routinized response behavior level.
This whole process of buyer’s decision-making functions on four pillars of this model or the four
essential elements of this model. These variables are elaborated below:
Input Variables
The stimulus inputs refer to the idea or information clue about the brand and its product in terms of
product quality, distinctiveness, price, service offered and availability.
These can be further classified as follows:
1. Significant Stimuli: The significant stimuli are the physical traits of the product and the brand. It
includes the product’s price, quality, availability, distinctive characteristics and service.

2. Symbolic Stimuli: The marketing strategies like advertisement and publicity creates a psychological
impact on the buyer’s perception of a product’s rhetorical and visible features.
3. Social Stimuli: The social stimuli comprises of the various environmental factors which are
considered as a source of information for the buyers. It includes family, social class and reference
groups.
Hypothetical Constructs
The hypothetical constructs depict the central part of the model. It includes all those psychological
variables which play a vital role in the buyer’s decision-making process.
It can be further bifurcated into the following two categories:
Perceptual Constructs
These components define the consumer’s procurement and perception of the information provided at the
input stage.
It is an essential element since it drives the buyer’s brand selection and purchases, which includes:
Sensitivity to Information: The buyer’s level of understanding or openness towards the information
received by him/her.
Perceptual Bias: On the grounds of individual perception of each brand, the buyer is partial towards
a particular brand.
Search for Information: The buyer also seeks for more information to ensure the right decision-
making.
Learning Constructs
The learning constructs define the buyer’s knowledge, opinion, attitude and end decision on product or
brand selection.
Following are the various learning constructs of a buyer:
Motive: The specific goal or purpose for which the product purchase is carried out.
Choice Criteria: The set of principles or benchmarks defined for product selection.
Brand Comprehension: The information about the product or brand pertained by the buyer.
Attitude: The buyer’s perspective and willingness to purchase a product of a particular brand defines
his/her attitude.
Confidence: The trust or faith of the buyer in a specific brand and its products builds his/her
confidence.
Intention: The buyer’s purchase motive, preference criteria, brand comprehension, consumer
attitude and confidence, results in the selection of a particular brand.
Satisfaction: After-purchase, the buyer evaluates his/her level of contentment, to find out whether
the product has fulfilled the expectations or not.
Output Variables
The output or as we say, the result of the buyer’s decision-making can be seen in the form of his/her
response towards the input variables.
It consists of five major components which are arranged systematically below:

1. Attention: The buyer’s level of concentration and alertness with which he/she understands the
information provided, is termed as attention.
2. Brand Comprehension: The awareness of the buyer regarding a particular brand and its products is
known as brand comprehension.
3. Attitude: The buyer’s evaluation of a brand in terms of individual likes and dislikes, determines
his/her behaviour, interest and awareness towards it.
4. Intention: The aim or objective of the buyer for purchasing a product can be seen as the buying
intention.
5. Purchase Behaviour: All the above elements result in the actual purchase of a product by the buyer.
Exogenous Variables
There are certain other external factors which influence the buying behavior of an individual or a firm by
hampering the product purchase of a preferred brand.
The exogenous variables are the environmental forces or components of this model. These are as follows:
1. Importance of Purchase: If the buyer perceives the product to be less crucial, involving a low cost,
then there is a little brand preference.
2. Personality Variables: Personal traits like ego, self-esteem, anxiety, dominance, authoritarian, etc.
influences a buyer’s decision-making while purchasing a product.
3. Social Class: A buyer’s social group, including the family, friends and other reference groups impact
the selection or rejection of a particular brand.
4. Culture: The buyer’s values, beliefs and ideas frame his/her purchase motive and inhibitors.
5. Organization: The buyer’s interaction with the social groups defines their authority, status and
power. The hypothetical constructs of a buyer are affected by such formal or informal
communications.
6. Time Pressure: The buyer, at times, is under the pressure of taking a timely decision, which makes
him/her look for alternatives if the product of the preferred brand is unavailable at the moment.
7. Financial Status: The buyer’s inability to purchase a product or unaffordability restricts him/her
from buying it.
[D] Stimulus Response Model:
Another model of consumer behavior, called the stimulus-response or “black box” model, focuses on the
consumer as a thinker and problem solver who responds to a range of external and internal factors when
deciding whether or not to buy. These factors are shown in Figure below:

As illustrated in the figure above, the external stimuli that consumers respond to include the marketing
mix and other environmental factors in the market. The marketing mix (the four Ps) represents a set of
stimuli that are planned and created by the company. The environmental stimuli are supplied by the
economic, political, and cultural circumstances of a society. Together these factors represent external
circumstances that help shape consumer choices.
The internal factors affecting consumer decisions are described as the “black box.” This “box” contains a
variety of factors that exist inside the person’s mind. These include characteristics of the consumer, such
as their beliefs, values, motivation, lifestyle, and so forth. The decision-making process is also part of the
black box, as consumers come to recognize they have a problem they need to solve and consider how a
purchasing decision may solve the problem. As a consumer responds to external stimuli, their “black box”
process choices based on internal factors and determine the consumer’s response–whether to purchase or
not to purchase.
Like the economic man model, this model also assumes that regardless of what happens inside the black
box (the consumer’s mind), the consumer’ response is a result of a conscious, rational decision process.
Many marketers are skeptical of this assumption and think that consumers are often tempted to make
irrational or emotional buying decisions. In fact, marketers understand that consumers’ irrationality and
emotion are often what make them susceptible to marketing stimuli in the first place.
For this reason, consumer purchasing behavior is considered by many to be a mystery or “black box.”
When people themselves don’t fully understand what drives their choices, the exchange process can
be unpredictable and difficult for marketers to understand.
(Note: Also read disadvantages and advantages of all consumer behavior models.)

MMUnit IV.pdf

More Related Content

Similar to MMUnit IV.pdf

Recently uploaded

MMUnit IV.pdf