Consumer Behavior

Prof. Jameel Pathan

 Who is a Consumer ?
Any individual who purchases goods and services
from the market for his/her end-use is called a
consumer.
In simpler words a consumer is one who
consumes goods and services available in the
market.
Example - Tom might purchase a tricycle for his
son or Mike might buy a shirt for himself. In the
above examples, both Tom and Mike are consumers
 What is consumer Interest ?
• Every customer shows inclination towards particular products and
services. Consumer interest is nothing but willingness of consumers
to purchase products and services as per their taste, need and of
course pocket.
• Both Ankita and Sandra went to the nearby shopping mall to buy
dresses for themselves. The store manager showed them the best
dresses available with him. Ankita immediately purchased two
dresses but Aparna returned home empty handed. The dresses
were little too expensive for Aparna and she preferred simple and
subtle designs as compared to designer wears available at the
store.
• In the above example Ankita and Aparna had similar requirements
but there was a huge difference in their taste, mind set and ability to
spend.
 What is Consumer Behavior ?
• Consumer Behavior is a branch which deals with the various stages a
consumer goes through before purchasing products or services for
his end use.
• Why do you think an individual buys a product ?
• Need
• Social Status
• Gifting Purpose
• Why do you think an individual does not buy a product ?
• No requirement
• Income/Budget/Financial constraints
• Taste
• When do you think consumers purchase products ?
• Festive season
• Birthday
• Anniversary
• Marriage or other special occasions
• There are infact several factors which influence buying decision of a
consumer ranging from psychological, social, economic and so on.
• The study of consumer behavior explains as to:
• Why and why not a consumer buys a product ?
• When a consumer buys a product ?
• How a consumer buys a product ?
Consumer Decision Making Process
• An individual who purchases products and services from the
market for his/her own personal consumption is called as
consumer.
• To understand the complete process of consumer decision
making, let us first go through the following example:
• Arnab went to a nearby retail store to buy a laptop for himself.
The store manager showed him all the latest models and after
few rounds of negotiations, Tim immediately selected one for
himself.
• In the above example Arnab is the consumer and the laptop is
the product which Tim wanted to purchase for his end-use.
• Why do you think Arnab went to the nearby store to purchase a
new laptop ?
• The answer is very simple. Arnab needed a laptop. In other
words it was actually Tim’s need to buy a laptop which took him
to the store.
• The Need to buy a laptop can be due to any of the
following reasons:
• His old laptop was giving him problems.
• He wanted a new laptop to check his personal
mails at home.
• He wanted to gift a new laptop to his wife.
• He needed a new laptop to start his own business.
• The store manager showed Arnab all the samples
available with him and explained him the features
and specifications of each model. This is called
information. Arnab before buying the laptop
checked few other options as well. The information
can come from various other sources such as
newspaper, websites, magazines, advertisements,
billboards etc.
A consumer goes through several stages
before purchasing a product or service.

NEED
↓
INFORMATION GATHERING/SEARCH
↓
EVALUATION OF ALTERNATIVES
↓
PURCHASE OF PRODUCT/SERVICE
↓
POST PURCHASE EVALUATION
 What are Cultural Factors ?

• Cultural factors comprise of set of values and ideologies of a

particular community or group of individuals. It is the culture of
an individual which decides the way he/she behaves. In simpler
words, culture is nothing but values of an individual. What an
individual learns from his parents and relatives as a child becomes
his culture.
• Example - In India, people still value joint family system and family
ties. Children in India are conditioned to stay with their parents till
they get married as compared to foreign countries where children
are more independent and leave their parents once they start
earning a living for themselves.
• Cultural factors have a significant effect on an individual’s buying
decision. Every individual has different sets of habits, beliefs and
principles which he/she develops from his family status and
background. What they see from their childhood becomes their
culture.
 Sub culture
• Is defined as a distinct cultural group that exists as an
particular segment within a larger, more complex society.
• Ex. Nationality, social class, Religion etc.
• Division of sub culture
Religious sub culture : Based on different faiths, Beliefs
and Religion like
1. Hindus
2. Muslims
3. Christians
4. Buddhists
5. Jain
6. Sikhs
 Social Factors
• Human beings are social animals. We need people
around to talk to and discuss various issues to reach to
better solutions and ideas. We all live in a society and it
is really important for individuals to adhere to the laws
and regulations of society.
• Social Factors influencing consumer buying decision can
be classified as under:
• Reference Groups
• Immediate Family Members
• Relatives
• Role in the Society
 Personal Factors
• Consumer Behaviour helps us understand the buying tendencies and
spending patterns of consumers. Not all individuals would prefer to buy
similar products.
• Consumer behaviour deals with as to why and why not an individual
purchases particular products and services.
• Occupation
• The occupation of an individual plays a significant role in
influencing his/her buying decision. An individual’s nature of job
has a direct influence on the products and brands he picks for
himself/herself.
• Arnab was working with an organization as Chief Executive Officer
while Amit, Arnab’s friend now a retired professor went to a nearby
school as a part time faculty. Arnab always looked for premium
brands which would go with his designation whereas Amit preferred
brands which were not very expensive. Arnab was really conscious
about the clothes he wore, the perfume he used, the watch he wore
whereas Amit never really bothered about all this.
 Psychological Factors
• Motivation
• Chandni went to a nearby restaurant and ordered pizza for herself.
• Why did Chandni buy pizza ?
• Answer - She was feeling hungry and wanted to eat something.
• In the above example, Hunger was the motivating factor for Nancy
to purchase pizza. There are several other factors which motivate
individuals to purchase products and services. An individual who is
thirsty would definitely not mind spending on soft drinks, packaged
water, juice and so on. Recognition and self esteem also influence
the buying decision of individuals.
• Why do people wear branded clothes ?
• Individuals prefer to spend on premium brands and unique
merchandise for others to look up to them. Certain products become
their status symbol and people know them by their choice of picking
up products that are exclusive. An individual who wears a Tag
Heuer watch would never purchase a local watch as this would be
against his image.
• Perception
• What is Perception ?
• What an individual thinks about a particular product or service is
his/her perception towards the same. For someone a Dell Laptop
might be the best laptop while for others it could be just one of the
best brands available.
• Individuals with the same needs might not purchase similar products
due to difference in perception.
• Priti and Anita had a hectic day at work and thus wanted to have
something while returning from work. Priti ordered a large chicken
pizza with French fries and coke while Anita preferred a baked
vegetable sandwich. Though both Priti and Anita had the same
motivation (hunger), but the products they purchased were entirely
different as Anita perceived pizza to be a calorie laden food.
Individuals think differently and their perceptions do not match.
• Individuals perceive similar situation differently due to difference in
the way they interpret information.
• here are three different processes which lead to difference in
perception:
• Selective Attention - Selective attention refers to the process
where individuals pay attention to information that is of use to them
or their immediate family members. An individual in a single day is
exposed to numerous advertisements, billboards, hoardings etc but
he is interested in only those which would benefit him in any way.
He would not be interested in information which is not relevant at the
moment.
• Selective Distortion - Consumers tend to perceive information in a
way which would be in line to their existing thoughts and beliefs.
• Selective Retention - Consumers remember information which
would be useful to them, rest all they forget in due course of time.
Michael wanted to purchase a watch for his wife and thus he
remembered the RADO advertisement which he had seen several
days ago.
• Learning
• Learning comes only through experience. An individual comes to
know about a product and service only after he/she uses the same.
An individual who is satisfied with a particular product/service will
show a strong inclination towards buying the same product again.
• Beliefs and Attitude
• Beliefs and attitude play an essential role in influencing the buying
decision of consumers. Individuals create a certain image of every
product or service available in the market. Every brand has an
image attached to it, also called its brand image.
• Consumers purchase products/services based on their opinions
which they form towards a particular product or service. A product
might be really good but if the consumer feels it is useless, he would
never buy it.
 Perception
• To understand the buyer and to make a customer out of him is the
main purpose of the study of consumer behavior. Though this
problem has been an aliased from different viewpoints under
different premises, it still remains a complex one. On the other hand
the buyer is a riddle. He is a highly complex entity. His needs &
desires are innumerable. Some are latent, some manifest and some
others are highly dominant. These have different priorities in the his
scheme of things. The buyer has his own ideas & plans about
realizing these needs &desires. The first & foremost task of the
marketer is to get close to the buyer and understand his need-
structure & priorities. There are four major factors which influence
the behavior of the consumers. They are
• :1.Psychological factors influencing Customer Behavior
• 2.Social Psychological factors influencing Customer Behavior
• 3.Sociological factors influencing Customer Behavior
• 4.Economic factors influencing Customer Behavior
• PSYCHOLOGICAL FACTORS
• These are the factors which are the personal attributes of an
individual. We shall study Five of them : Attitude, Motivation,
Perception, Personality and Learning
• Different people see things, events, and ideas from different view
point, and hold different opinions, views for them. In other words
they have different “Perception” of the world
• Definition
Perception is defined as the process by which the individual selects,
organises, and interprets various stimuli into a meaningful &
coherent picture of the world. Marketers are deeply interested in
such perceptions the consumers hold about their products &
services, brands,company etc
• Elements of perception :
• The following are the elements of perception
:1.Sensation – is the immediate & direct response of the
sensory organs to stimuli. Stimulus is a single input of
any of the senses. Human beings have sensory receipt
or scaled sensory organs. They are :
• a. Eyes for sights & seeing,
• b. Ears for sounds & hearing,
• c. Nose for smells & smelling,d.Tongue for tastes &
tasting,
• e. Skin for textures, touch & feeling,
• 2.Marketers try to stimulate the sensory organs of a
consumer to create a favorable perception towards their
products.
• Perception in Marketing :
• Marketers have realized that understanding the perception process
of consumers help them to design better ways to help them perceive
favorably. The main methods of stimuli are thro’ advertising,
communication, messaging, company news etc. Thus the marketers
have to develop specific stimuli thro’ these methods so that the
consumers perception about their products clearly & enduringly.
These are some techniques :
• 1.Brand development & Perceptual Mapping – This technique helps
the marketers to determine how the products or services appear to
the consumer in relation the other competitive brands on one or
more relevant attributes of the products or services.
• 2.Retail Stores – In retail stores normally all the brands in a
particular category of products are arranged at the same place, so
they have a direct competitive setting. The brands which claim to be
special in any respect should be specially displayed to gain attention
 Consumer motivation
• Motivation is the driving force within individuals that
impels them to action
Needs
 Innate needs Biogenic or Primary Physiological needs
 Acquired needs ( Psychological or Secondary) learned
from culture or environment
 Intrinsic Needs- His her own comfort
Motives
 Positive
 Negative
Goals
 Generic Goal
 Product specific
Rational Vs Emotional Motives
 Personality
• The inner psychological characteristics
that both determine and reflect how a
person responds to his or her environment
 Nature of personality
• Personality reflects individual differences
• Personality is consistent and enduring
• Personality can change
 Theories of Personality
• Freudian theory
Unconscious needs or drives are at the
heart of human motivation
• Neo Freudian personality theory
Social relationships are fundamental to the
formation and development of personality
• Trait theory
Quantitative approach to personality as a set
of psychological traits
• Freudian Theory &
Product Personality:
Sigmund Freud’s
psychoanalytic theory
of personality. It
comprises of Id, Ego,
and Superego
• NEO-FREUDIAN PERSONALITY THEORY This theory
is also called as socio-analytic theory. the researchers
here believed that social relationships are fundamental
to the formation and development of personality.
“KAREN HORNEY” proposed 3 types of personality
groups:-
• a) Compliant individuals-who move towards others
(desire to be loved ,wanted & appreciated)
• b) Aggressive individuals-who move against others
(desire to excel & win admiration)
• c) Detached individuals-who move away from others
(desire independence , self-sufficiency, and individualism
or freedom)
• TRAIT THEORY • Personality theory with
a focus on psychological characteristics. •
Trait- any distinguishing, relatively
enduring way in which one individual
differs from another. • Personality is to
linked to how consumers make their
choices or to consumption of a broad
product category-not a specific brand
• FROM CONSUMER MATERIALISM TO COMPULSIVE CONSUMPTION •
Consumer materialism the extent to which a person is considered
“materialistic” • Fixed consumption behavior consumers fixated on certain
products or categories of products. • Compulsive consumption behavior
“addicted” or “out-of-control” consumers
• . BRAND PERSONALITY • Brand personality is as if “making the brand
alive” • The attribution of human personality traits (seriousness, warmth,
imagination, etc.) to a brand as a way to achieve differentiation. • Usually
done through long-term advertising and appropriate packaging and
graphics. • These traits inform brand behavior through both prepared
communication/packaging , etc. and through the people who represent the
brand- its employees. • The way in which it speaks of its products or
services shows what kind of person it would be if it were human. •
• A brand without a personality has trouble gaining awareness and
developing a relationship with customer. Product personality and Gender •
Assigning of gender as part of personality description is fully consistent with
the marketplace reality that products and services, in general are viewed by
consumers as having a “gender-being.” • Armed with such knowledge of the
perceived gender of a product or a specific brand, marketers are in a better
position to select visual and copy-text for various marketing messages. •
E.g.: Hero Honda Pleasure- “why should boys have all the fun” : Gillette
Venus . Feminine products *Cleaning, Home care products Masculine
products *gadgets, bikes, cars, etc.
 Belief attitude and behavior
• beliefs
the knowledge that a consumer has about objects, their attributes,
and their benefits
• objects
products, people, companies, and things about which people hold
beliefs and attitudes
• attributes
characteristics or features than an object might or might not have
• benefits
the positive outcomes that attributes might provide to the consumer
• Note: people buy a bundle of benefits, not product attributes; hence,
benefit segmentation as a basis for segmentation beliefs can differ
between people beliefs and attitudes are directed toward some
specific object of those beliefs and attitudes
three types of beliefs:
• 1. object-attribute beliefs
• 2. attribute-benefit beliefs
• 3. object-benefit beliefs
• A person's attitude about an object can be
a function of the beliefs that a person
holds with regard the attitudinal object, but
can also be a function of the importance of
the individual attributes about which a
person has beliefs.
• BEHAVIORS AND BEHAVIORAL INTENTIONS
• behaviors
everything that consumers do related to
acquiring, using, and disposing of products
• behavioral intentions
the intentions of consumers to behave in a
particular way with regard to the acquisition, use,
and disposition of products
• Note: behavioral intentions are presumed to
precede behaviors. We therefore assume that
measures of behavioral intentions are
suggestive of future consumer actions
(behaviors).