UNIT III

CONSUMER BEHAVIOR
• 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 behavioural responses.
• Studying consumer behavior is important because it helps marketers
understand what influences consumers’ buying decisions.
• By understanding how consumers decide on a product, they can fill in the gap
in the market and identify the products that are needed and the products that
are obsolete.
• Studying consumer behavior also helps marketers decide how to present their
products in a way that generates a maximum impact on consumers.
Understanding consumer buying behavior is the key secret to reaching and
engaging your clients, and converting them to purchase from you.
• A consumer behavior analysis should reveal:
• What consumers think and how they feel about various alternatives (brands,
products, etc.);
• What influences consumers to choose between various options;
• Consumers’ behavior while researching and shopping;
• How consumers’ environment (friends, family, media, etc.) influences their
behavior.
 INVOLVEMENT LEVELS

• The level of involvement reflects how important or interested the consumer is in the decision. That changes
the amount of information they need to make a decision.
• The level of involvement may be considered a continuum from decisions that are fairly routine, sometimes
called habits, to decisions that require extensive thought and a high level of involvement.
• Whether a decision is low, high, or limited, involvement typically varies by consumer rather than by the
product or service. For example, for most consumers, purchasing a car is high-involvement decision because
it doesn’t happen often, it is expensive compared to their income and it is a complex and long term decision.
• When a consumer is engaged in the purchase process for the car, they might engage in extensive search using
word of mouth, online product reviews, and safety ratings.
 HIGH INVOLVEMENT

• 1. High price:
• Where the products are highly priced consumers display high involvement; for example, buying
a designer product. When buying a Mercedes car, a consumer displays high involvement, but not
when buying a second-hand car.
• 2. Technical features:
• When a consumer is buying products having complex features then they spends time in getting
themselves familiarized with the product, which shows high involvement. Such products include
computers, refrigerators, washing machines, TVs, music system, cars, DVDs, and so on.
Manufacturers provide product manuals to facilitate easy understanding of the product.
• 3. Major differences between alternatives:
• High involvement is caused when the consumer notice major differences between alternatives; for
example, Swiss and Chinese wrist watches. Consumers spend more time to evaluate the difference to
arrive at the right decision.
• 4. Projection of self:
• Some consumers are very specific about what they buy; for example, if a con­sumer claims that he
uses only branded products, it means the consumer is ready to pay more for the brand and convince
himself that he is not a run-of-the-mill type buyer.
• 5. Evaluation of risks:
• Presence of high risks leads to high involvement. A consumer is interested to evaluate risks to know
how to minimize them and if possible to avoid them; for example, hair dyes contain chemicals. A
consumer evaluates if its use can result in health problem, and if so, how to avoid such risks.
 LOW INVOLVEMENT
• 1. Brand hopping:
• Some consumers do not display brand loyalty. They switch from one brand to another. Whenever a
new consumer product appears in the market, they buy it on trial basis. Brand hopping is common
where differences between the brands are minimum.
• 2. Availability of alternative brands:
• When a consumer finds similar alternatives within the same product class, they settles for any one
brand. In this case, buying process is not time consuming.
• 3. Effect on consumer’s self-image:
• This situation generally arises when the consumer is buying daily-consumption items; for example, if
they want to buy Marie biscuits, they may pick up Marie by Parle or by Britannia. This is because it
neither reflects the status nor damages the consumer’s image.
 CHARACTERISTICS AFFECTING CONSUMER BEHAVIOR
• 1. Cultural Factors
• Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture, and social
class.
• Culture
• Basically, culture is the part of every society and is the important cause of person wants and behavior. The
influence of culture on buying behavior varies from country to country therefore marketers have to be very
careful in analyzing the culture of different groups, regions or even countries.
• Subculture
• Each culture contains different subcultures such as religions, nationalities, geographic regions, racial groups
etc. Marketers can use these groups by segmenting the market into various small portions. For example
marketers can design products according to the needs of a particular geographic group.
• 2. Social Factors
• Social factors also impact the buying behavior of consumers. The important social factors are: reference groups, family, role
and status.
• Reference Groups
• Reference groups have potential in forming a person attitude or behavior. The impact of reference groups varies across
products and brands. For example if the product is visible such as dress, shoes, car etc then the influence of reference groups
will be high. Reference groups also include opinion leader (a person who influences other because of his special skill,
knowledge or other characteristics).
• Family
• Buyer behavior is strongly influenced by the member of a family. Therefore marketers are trying to find the roles and
influence of the husband, wife and children. If the buying decision of a particular product is influenced by wife then the
marketers will try to target the women in their advertisement. Here we should note that buying roles change with change in
consumer lifestyles.
• Roles and Status
• Each person possesses different roles and status in the society depending upon the groups, clubs, family, organization etc. to
which he belongs. For example a woman is working in an organization as finance manager. Now she is playing two roles, one
of finance manager and other of mother. Therefore her buying decisions will be influenced by her role and status.
• 3. Personal Factors
• Personal factors can also affect the consumer behavior. Some of the important personal factors that influence the buying
behavior are: lifestyle, economic situation, occupation, age, personality and self concept.
• Age
• Age and life-cycle have potential impact on the consumer buying behavior. It is obvious that the consumers change the
purchase of goods and services with the passage of time. Family life-cycle consists of different stages such young singles,
married couples, unmarried couples etc which help marketers to develop appropriate products for each stage.
• Occupation
• The occupation of a person has significant impact on his buying behavior. For example a marketing manager of an
organization will try to purchase business suits, whereas a low level worker in the same organization will purchase rugged
work clothes.
• Economic Situation
• Consumer economic situation has great influence on his buying behavior. If the income and savings of a customer is high then
he will purchase more expensive products. On the other hand, a person with low income and savings will purchase
inexpensive products.
• Lifestyle
• Lifestyle of customers is another import factor affecting the consumer buying behavior. Lifestyle
refers to the way a person lives in a society and is expressed by the things in his/her surroundings.
It is determined by customer interests, opinions, activities etc and shapes his whole pattern of
acting and interacting in the world.
• Personality
• Personality changes from person to person, time to time and place to place. Therefore it can
greatly influence the buying behavior of customers. Actually, Personality is not what one wears;
rather it is the totality of behavior of a man in different circumstances. It has different
characteristics such as: dominance, aggressiveness, self-confidence etc which can be useful to
determine the consumer behavior for particular product or service.
• 4. Psychological Factors
• There are four important psychological factors affecting the consumer buying behavior. These are: perception,
motivation, learning, beliefs and attitudes.
• Motivation
• The level of motivation also affects the buying behavior of customers. Every person has different needs such as
physiological needs, biological needs, social needs etc. The nature of the needs is that, some of them are most
pressing while others are least pressing. Therefore a need becomes a motive when it is more pressing to direct the
person to seek satisfaction.
• Perception
• Selecting, organizing and interpreting information in a way to produce a meaningful experience of the world is called
perception. There are three different perceptual processes which are selective attention, selective distortion and
selective retention. In case of selective attention, marketers try to attract the customer attention. Whereas, in case of
selective distortion, customers try to interpret the information in a way that will support what the customers already
believe. Similarly, in case of selective retention, marketers try to retain information that supports their beliefs.
• Beliefs and Attitudes
• Customer possesses specific belief and attitude towards various products. Since such
beliefs and attitudes make up brand image and affect consumer buying behavior therefore
marketers are interested in them. Marketers can change the beliefs and attitudes of
customers by launching special campaigns in this regard.
CONSUMER BEHAVIOR AND BUYING DECISION PROCESS
• 1. Problem Recognition
• It’s in fact, the beginning of the buying process It is a perception. We realize what we should ideally
have and what we have at present. The decision to buy a particular product depends on the necessity
of that product to the buyer from FMCG to a luxury product
• 2.Information Seeking
• This follows the problem recognization stage. The search is mostly directed towards the products
that are consistent with our needs. The amount and type of information that is collected are related to
the product in relation to the need for the product information that can be gathered by ads, visiting
the store through the internet or by talking with your friends.
• 3.Evaluation of Alternatives
• When the consumer seeks information he realizes the alternative choices available and gets the
background against which choices can be made.The brand which consumer considers while
making a purchase decision forms an evoked set which is a small proportion of the total available
brands. Promotion, especially advertising provides information to the consumers enabling him to
evaluate
• 4. Buying Decision
• After the alternative choices are evaluated The brands are ranked & the top-ranking brand may be
purchased. Ultimate buying decisions may undergo a change if the preferred brand is not
available.
• 5.Post-Purchase Evaluation
• Now the product has been bought and consumed. It is the stage for post-purchase evaluation. The
consumer may either be satisfied or dissatisfied. A satisfied consumer stores the product
information in his memory and uses it next time at the time of the problem recognition stage. A
dissatisfied consumer may go in for another brand next time he is out to buy. He will seek
additional & will consider another set of brands
 THE BUYER DECISION PROCESS FOR NEW PRODUCTS
• Stage 1: Needs Requirement
• Needs requirement is the first and most fundamental step in the potential customer’s decision-making
process. The customer’s need results from two main influences: internal and external stimuli. Companies
wanting to optimize this stage of the buying process need to help potential customers recognize and define
their needs. Gathering information through market research, interviews, surveys, and focus groups helps
organizations understand their customers’ needs.
• Stage 2: Information Search
• In this specific stage, having recognized a problem or need, customers want to identify their selections. The
Information Search stage is when consumers seek information about a product or service. They might do
this by talking to friends and family, looking online, reading reviews, or visiting a store. During this stage,
consumers are trying to learn more about what they want and determine which options are available.
• Stage 3: Evaluation of Alternatives
• After gathering information, consumers will enter the evaluation of alternatives stage. They will
compare their options and decide which is best for them. They might consider factors such as price,
quality, or features.
• In this stage of the buying decision process, businesses influence consumer behavior by providing
information about the products or services available. This can be done through
advertising, product demonstrations, and other marketing activities. The goal is to persuade
the customer that the company’s products or services are the best option available.
Therefore, businesses must provide accurate and unbiased information about their products or
services during this stage. Doing so can increase the chances that customers will choose their
company’s products or services over their competitors.
• Stage 4: Purchasing Decision
• The purchasing decision stage of the buying decision process is when customers make a final decision
about which product or service to buy. Businesses can influence this stage by providing product reviews,
detailed descriptions, and pricing information to help customers compare and choose between different
options. By helping customers understand their options and make an informed decision, businesses can
increase the chances of making a sale.
• Stage 5: Post-Purchase
• Finally, the post-purchase stage helps foster brand loyalty and referral business. Post-purchase is when
consumers use and assess the product or service and decide if they are satisfied or not and whether or not
they would recommend it to others.
• Businesses influence customers in the post-purchase stage in several ways. First, companies can
encourage customers to leave positive reviews about their products or services. This helps to build word-
of-mouth marketing and creates social proof that can influence other potential customers.