Consumer Behaviour

Unit-1

Learn with a smile 

CONCEPT
Consumer behaviour can be defined as the decision-
making process and physical activity involved in
acquiring, evaluating, using and disposing of goods and
services.
Consumer behaviour is a complex, dynamic,
multidimensional process, and all marketing decisions
are based on assumptions about consumer behaviour.
Consumer behaviour studies play an important role in
framing marketing and in deciding marketing strategies.
Consumer behaviour explains the reasons and logic that
underlie purchasing decisions and consumption patterns;
It explains the processes through which buyers make
decisions.
The study includes within its purview, the interplay
between cognition, affect and behaviour that goes on within
a consumer during the consumption process: selecting,
using and disposing off goods and services
Cognition: This includes within its ambit the
“knowledge, information processing and thinking” part;
Affect: This is the “ feelings” part. It includes the
favorable or unfavorable feelings and corresponding
emotions towards a stimuli (eg. towards a product or
service offering or a brand)
Behaviour: This is the “visible” part. In our case, this
could be the purchase activity: to buy or not a buy

The interaction is reciprocal between each of the three

towards each other and with the environment.
The subject is interdisciplinary. It has borrowed heavily
from:
psychology (the study of the individual: individual
determinants in buying behavior),
sociology (the study of groups: group dynamics in
buying behavior),
social psychology (the study of how an individual
operates in group/groups and its effects on buying
behavior),
anthropology (the influence of society on the individual:
cultural and cross-cultural issues in buying behavior),
and
economics (income and purchasing power)
Scope of Consumer Behavior: The study of consumer behavior deals
with understanding consumption patterns and behavior. It includes
within its ambit the answers to the following: -
• ‘What’ the consumers buy: goods and services -
• ‘Why’ they buy it: need and want -
• ‘When’ do they buy it: time: day, week, month, year, occasions etc.
• ‘Where’ they buy it: place -
• ‘How often they buy’ it: time interval -
• ‘How often they use’ it: frequency of use
• The scope of consumer behavior includes not only the actual buyer but
also the various roles played by him/ different individuals.
Buying roles: Actual Buyer vis a vis other users. There are five
buying roles, viz., Initiator, Influencer, Decider, User, Buyer.
The initiator is the person who identifies that there exists a
need or want;
the influencer is the one who influences the purchase
decision, the actual purchase activity and/or the use of the
product or service;
the decider is the one who decides whether to buy, what to
buy, when to buy, from where to buy, and how to buy;
the buyer is the one who makes the actual purchase;
and, the user is the person (s) who use the product or service.
These five roles may be played by one person or by different
persons.
A person may assume one or more of these roles.
This would depend on the product or service in question.
The study of consumer behaviour for any product is of vital importance
to marketers in shaping the fortunes of their organizations.
It is significant for regulating consumption of goods and thereby maintaining
economic stability.
It is useful in developing ways for the more efficient utilization of resources
of marketing. It also helps in solving marketing management problems in
more effective manner.
Today consumers give more importance on environment friendly products.
They are concerned about health, hygiene and fitness. They prefer natural
products. Hence detailed study on upcoming groups of consumers is
essential for any firm.
The growth of consumer protection movement has created an urgent need to
understand how consumers make their consumption and buying decision.
Consumers’ tastes and preferences are ever changing. Study of consumer
behavior gives information regarding color, design, size etc. which consumers
want. In short, consumer behavior helps in formulating of production policy.
For effective market segmentation and target marketing, it is essential to
have an understanding of consumers and their behavior.
Consumer Decision Making Process
Consumer Decision Making Process
Step 1 - Need is the most important factor which leads to buying of products and
services. Need in fact is the catalyst which triggers the buying decision of individuals.
An individual who buys cold drink or a bottle of mineral water identifies his/her need as
thirst. However in such cases steps such as information search and evaluation of
alternatives are generally missing. These two steps are important when an individual
purchases expensive products/services such as laptop, cars, mobile phones and so on.
Step 2 - When an individual recognizes his need for a particular product/service he tries
to gather as much information as he can.
An individual can acquire information through any of the following sources:
Personal Sources - He might discuss his need with his friends, family members, co
workers and other acquaintances.
Commercial sources - Advertisements, sales people, Packaging of a particular product in
many cases prompt individuals to buy the same, Displays (Props, Mannequins etc)
Public sources - Newspaper, Radio, Magazine
Experiential sources - Individual’s own experience, prior handling of a particular
product
Consumer Decision Making Process

 Step 3 - The next step is to evaluate the various alternatives available in the
market. An individual after gathering relevant information tries to choose the
best option available as per his need, taste and pocket.
 Step 4 - After going through all the above stages, customer finally purchases
the product.
 Step 5 - The purchase of the product is followed by post purchase evaluation.
Post purchase evaluation refers to a customer’s analysis whether the product
was useful to him or not, whether the product fulfilled his need or not?
Engel- Kollat-Blackwell Model
Engel- Kollat-Blackwell Model
This model was created to describe the increasing, fast-growing body of knowledge
concerning consumer behavior. Engel et.al. model, like in other models, has gone
through many revisions to improve its descriptive ability of the basic relationships
between components and sub-components; which consists of four stages.
First stage: Decision-process stages
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.
Second stage: Information input
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.
Engel- Kollat-Blackwell Model

Third stage: Information processing

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.
Fourth stage: 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. This model incorporates many items, which influence consumer
decision-making such as values, lifestyle, personality and culture.
Limitations
 The model did not show what factors shape these items (personality, values and
culture), and
 why different types of personality can produce different decision-making?
Factors affecting Consumer behavior
1. Cultural Factors affecting Consumer Behaviour
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. 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.
Subcultures
Each culture further comprises of various subcultures such as
religion, age, geographical location, gender (male/female), status
etc.
Religion (Christianity, Hindu, Muslim, Sikhism, Jainism etc)
A Hindu bride wears red, maroon or a bright colour lehanga or saree
whereas a Christian bride wears a white gown on her wedding day. It
is against Hindu culture to wear white on auspicious occasions.
Muslims on the other hand prefer to wear green on important
occasions.
Social class (Upper Class, Middle class and Lower Class)
People from upper class generally have a tendency to spend on
luxurious items such as expensive gadgets, cars, dresses etc. You
would hardly find an individual from a lower class spending money
on high-end products. A person who finds it difficult to make ends
meet would rather prefer spending on items necessary for survival.
Individuals from middle class segment generally are more interested
in buying products which would make their future secure.
2. Social Factors affecting Consumer Behaviour
Social Factors influencing consumer buying decision can
be classified as under:
Reference Groups (Example - Religious Associations,
Political Parties, Clubs etc), Immediate Family Members,
Relatives
Role in the Society
Status in the society
3. Personal Factors affecting Consumer Behaviour
Occupation
Age
Economic Condition
Lifestyle
Personality (fitness freak would look for fitness
equipments)
4. Psychological Factors affecting Consumer Behaviour
Motivation
Nancy went to a nearby restaurant and ordered pizza for herself.
Why did Nancy buy pizza ?
Answer - She was feeling hungry and wanted to eat something.
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.
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.
Role of Family in Consumer Behaviour
An individual’s immediate family members play an
essential role in influencing his/her buying
behaviour.
An individual tends to discuss with his immediate family
members before purchasing a particular product or
service. Family members might support an individual’s
decision to buy a particular product, stop him for
purchasing it or suggest few other options.
Family comprises of:
Parents
Siblings
Spouse
Grandparents
Relatives (Cousins/Aunts, Uncles etc)
EXAMPLES
A Bachelor would never purchase Women’s Horlicks or
Kellogg’s K special or a female perfume but when he has a
wife at home; he would love to purchase them for his
wife.
A young girl who has never purchased shaving creams or
men’s perfume all through her life for herself would not
mind purchasing for her husband, father or father in law.
A working woman would have different needs as
compared to a housewife. A woman who goes to office
would prompt her husband to buy formal trouser and
shirt, office bag, make up products etc for her while a
house wife would not like spending on all these as she
does not require an office bag and so on.
In countries like India, where children are supposed to
stay with their parents till the time they get married,
the influence of parents on an individual’s buying
decisions can not be ignored. What he sees from his
childhood becomes his habit or in other words
lifestyle. 
Children also influence the buying decisions of
individuals. An individual spends happily on toys,
candies, ice creams, chocolates. sweets when he has
children at home.
 Children in the family prompt their parents to
subscribe to Disney Channel, Cartoon network and so
on.
Nuclear families and Joint Family also affect the buying
decisions.
Factors affecting Consumer behavior
Changing Pattern Of Consumer Behavior In India
 Changing Pattern Of Consumer Behavior In India
The tide is changing in the consumer behaviour in India, riding
on the back of higher disposable income, changing lifestyle,
urbanisation of semi-urban and rural communities, shifting
demography, increasing consumer awareness, growing Internet
penetration and innovative promotional campaigns.
Consumers in India have become more conscious buyers,
looking at options, engaging over Internet and understanding
the usefulness of the products.
Consumers are now more informed and buy products after doing
their own research, rather than just relying on marketers or
company promotions.
Further, with social media making inroads even in the
hinterland (German word which means ‘the land behind’)
through smartphones, consumers are seen exchanging notes on
product reviews before making a buying decision.
Consumers in India have now become more value
conscious. They are demanding higher services and value
for their money.
Experimenting with new products/impulsive buying: The
impulsive buying in consumers in India can be linked with
the options available both on the online and offline
medium.
Consumers are relying more on the reviews of their peers
and friends, engaging in active decisions about products
and services over social media sites, before making any
buying decisions.
Increased Internet penetration in the country has changed
the buying pattern of people.
Easy availability of credits: The availability of credit has also
enhanced the consumption pattern for younger generation
in the country. (EMI options)