Consumer behavior is the study of how individuals purchase, use, and dispose of products and services. It involves understanding consumer thoughts, feelings, and actions. Studying consumer behavior helps companies gain competitive advantages by focusing on customer retention rather than just acquisition, and by understanding customer segments. Key factors that influence consumer behavior include cultural, social, personal, and psychological factors. Models of consumer decision making include the buying process model and consumer activity model. Consumer research methods are used to understand consumer behavior and include quantitative and qualitative approaches like surveys, interviews, and observation.

1. 4. Special Studies in
Marketing
BMS 2012
Reema Rijhwani

2. Consumer Behavior

3. Definition
Study of individuals or groups acquiring, using and
disposing of products, services, ideas, or
experiences
Includes search for information and actual
purchase
Includes an understanding of consumer thoughts,
feelings, actions, perceptions, brand image etc

4. Reasons to study Consumer
Behavior
• From organizing by product units to organizing
by customer segments
• Focusing on profitable transactions than
focusing on customer lifetime value
• Focusing on not just the financial scorecard but
also on the marketing scorecard
• From shareholders to stakeholders

5. • Spreading from marketing team to the entire
organization for best consumer service
• From building brands via advertising to building
brands through performance
• Customer acquisition to customer retention
• Customer satisfaction measurement
• Competition and wide choices
• To gain competitive advantage
• To anticipate business/consumer solutions

6. Organization Chart
Traditional Modern
Consumers
Top Management
Middle Management
Front Line Staff

7. Product Levels
(Consumer Expectations)

8. Types Of Needs/Benefits
SEEK… health, time, money, popularity, better appearance,
security, praise, comfort, leisure, pride, advancement,
acceptance, enjoyment, self-confidence, prestige,
status.
BE… good parents, social, hospitable, up-to-date, creative,
influential, gregarious, efficient, trend setting,
authorities, house-proud.
SAVE… time, money, work, discomfort, worry, doubts, risks,
embarrassment.
People want to …..
DO… express their individuality, resist domination, satisfy curiosity,
emulate idols, appreciate beauty, acquire/collect things, win
affection/love, improve themselves.

9. Consumer Research
CR is undertaken to –
• Know the psychology of how consumers think, feel,
reason, and select between different alternatives (e.g.,
brands, products, and retailers)
• Know how the consumer is influenced by his or her
environment (e.g., culture, family, signs, media)
• Understand the behavior of consumers while shopping
• Understand limitations in consumer knowledge or
information processing abilities influence decisions and
marketing outcome

10. • Check how consumer motivation and decision strategies
differ between products that differ in their level of
importance or interest that they have for the consumer
• Know how marketers can adapt and improve their
marketing campaigns and marketing strategies to more
effectively reach the consumer.

11. CB Study

12. Overall Model of Consumer
Behaviour
Self-Concept
&
Learning
Decision ProcessesExternal Influences
Internal Influences
Culture
Subculture
Demographics
Social status
Reference groups
Family
Marketing Activities
Perception
Learning
Memory
Motives
Personalit
yEmotions
Attitude
s
Problem Recognition
Information Search
Alt Eval & Selection
Purchase
Postpurchase
Processes

13. Factors Influencing CB
1. Cultural Factors
2. Social Factors
3. Personal Factors
4. Psychological Factors

14. 1. Cultural Factors
• Culture – Family, by birth
• Sub culture – religious, racial groups etc
• Social class – Sharing same values, behave
homogenous

15. 2. Social Factors
• Reference groups (Direct Contact - Membership
Group *Primary Group, *Secondary Group)
• (Indirect Contact - Associative Group, Dissociate
Group, Opinion Leader)
• Family – Orientation & Procreation
• Roles & Statuses

16. 3. Personal Factors
• Age & Stage in FLC
FLC – Family Life Cycle
Bachelor Stage, Newly Married Couple, Full Nest I, Full
Nest II, Full Nest III, Empty Nest I, Empty Nest II,
Solitary Survivor I, Solitary Survivor II
• Occupation & Economic Circumstances
• Personality & Self Concept – Personality traits,
marketers must get a matching brand personality
• Lifestyle – AIO & Psychographics (VALS)

17. AIO – Attitudes, Interests &
Opinions
• Psychographic profile of market segment
• Combine demographic characteristics with
lifestyle measurement
• Asking certain statements to determine AIO –
I would prefer to stay at home than go out?
Which books do you prefer?

18. Psychographics – VALS Model

19. 4. Psychological Factors
• Perception
- Selective Attention
- Selective Distortion
- Selective Retention
• Learning – Drive, Cues, Discrimination
• Beliefs and Attitudes
• Motivation – Maslow’s Theory & McClelland's
Theory

20. Maslow’s Motivational Theory

21. McClelland's Theory of Need
Need for Power – High on power, risk, control, goal,
task oriented, effective negotiator, positive or negative
in nature
Need for Achievement – Motivated, seek personal
success than rewards & success, risk but in degree,
seek to excel
Need for Affiliation – co-operating emotional bonds, no
risk taker, organization goals more important, wants to
be liked by people, sense of belonging

23. Consumer Decision Making
Models

24. 1. Buying Process
Problem
Recognition
Post Purchase
Behavior
Purchase
Decision
Evaluation of
Alternatives
Information
Search

25. • Problem Recognition – Internal & External Stimuli
Marketers should incite this stimulus
• Information Search – attention and active search –
drawn from sources (commercial, public, personal &
experience)
Marketers should cater to all relevant info points
• Evaluation of alternatives – perception, belief, attitudes,
brand image etc
Marketers try brands/products to be in sync or alter them
for consumer benefit

26. • Purchase Decision – situation and other peoples opinion
• Post purchase Behavior – Satisfaction, actions, use &
disposal
Marketers use this to derive strategies, communication etc

27. 2. Health Model
Pre-
contemplation
MaintenanceAction
PreparationContemplation

28. 3. Consumer Activity Model
Pre
“Deciding what to do”
During
“Doing it”
Post
“Keep it going”

29. Consumer Research
Definition
• The systematic and objective process of gathering,
recording, and analyzing data for aid in understanding
and predicting consumer thoughts, feelings, and
behavior
• In global environment, research has become utmost
important
• Consumer Research an important study in market
research

30. • Domain - Primary and Secondary Research
• Types - Quantitative and Qualitative Research
• Primary Methods – Surveys, Behavioral (Focus Groups,
Personal Interviews, Projective Technique, Observation,
Moles, Online, Scanner), Experimental
• Secondary Research - Internal Sources, Government
Publication, Periodicals & Books, Commercial Data

31. Buying Behavior
• Buying Roles
- Initiator
- Influencer
- Decider
- Buyer
- User

32. Consumer Involvement ……cont

33. • Complex Buying Behavior – Beliefs, attitudes for brands,
products, risky and high investment. Eg. Automobiles,
heavy equipments, IT services etc
• Dissonance Reduced Buying Behavior – High
investment, infrequent, narrow down to various
parameters – product, brand or company wise. Eg.
Mobiles phones
• Variety Seeking Buying Behavior – Brand switching,
probably satisfied but seek variety, shelf space & advtg
& availability important to ensure sales. Eg. Creams
• Habitual Buying Behavior – Routine, passive recipient of
information, brand familiarity than brand conviction
FMCG categories like soaps, shampoos, juices etc.

34. Adoption Process / Innovation Diffusion
1. Innovator who
make up 2.5% of all
purchases of the
product, purchase the
product at the
beginning of the life
cycle. They are not
afraid of trying new
products that suit their
lifestyle and will also
pay a premium for that
benefit.
2. Early Adopters
make up 13.5% of
purchases, they are
usually opinion leaders
and naturally adopt
products after the
innovators. This group
of purchasers are
crucial because
adoption by them
means the product
becomes acceptable,
spurring on later
purchasers.
3. Early Majority
make up 34% of
purchases and have
been spurred on by
the early adopters.
They wait to see if the
product will be
adopted by society
and will purchase only
when this has
happened. They early
majority usually have
some status in society.
4. Late Majority make
up another 34% of
sales and usually
purchase the product
at the late stages of
majority within the life
cycle.
5. Laggards make up
16% of total sales and
usually purchase the
product near the end
of its life. They are the
‘wait and see’ group.
They wait to see if the
product will get
cheaper. Usually when
they purchase the
product a new version
is already on the
market. Some may call
Laggards, bargain
hunters!

35. Thank You