Consumer Behaviour

6th Semester IMBA

Maleeha Gul
 Introduction
• We are all consumers. We buy groceries, computers, and cars. We purchase
services ranging from bank accounts to college educations. However, we also know
that consumers are different from one another.
•
• We buy different clothes, drive different cars, and eat different foods. Moreover,
even the same consumer can make different decisions depending on the situation.
So how are we to construct coherent marketing strategies?

• In this class we will examine how and why consumers behave the way that they do.
• We will explore our intuitions about our own behavior.
• We will learn about theories developed in marketing, psychology, and other
behavioral sciences.
• And we will learn how to use these theories to predict how consumers will respond
to different marketing activities.
 Understanding the consumer
• What we buy, how we buy, where and when we buy, in how much quantity we
buy depends on our perception, self concept, social and cultural background and
our age and family cycle, our attitudes, beliefs values, motivation, personality,
social class and many other factors that are both internal and external to us.

• While buying, we also consider whether to buy or not to buy and, from which
source or seller to buy.

• In some societies there is a lot of affluence and, these societies can afford to buy
in greater quantities and at shorter intervals. In poor societies, the consumer can
barely meet his barest needs.

• The marketers therefore tries to understand the needs of different consumers and
having understood his different behaviours which require an in-depth study of
their internal and external environment, they formulate their plans for marketing.
 Why study CB
• The marketer helps satisfy needs and wants through product
and service offerings.
• For a firm to survive, compete and grow, it is essential that the
marketer identifies these needs and wants, and provides
product offerings more effectively and efficiently than other
competitors.
• A comprehensive yet meticulous knowledge of consumers and
their consumption behavior is essential for a firm to succeed.
• Herein, lies the essence of Consumer Behavior, an
interdisciplinary subject, that emerged as a separate field of
study in the 1960s.
 Why the field of CB developed:

• In order to succeed in any business, and especially in

today’s dynamic & rapidly evolving market place, marketers
need to know everything they can about consumers – what
they want, what they think, how they work, how they
spend their leisure time. The field of CB is rooted in the
Marketing concept.
• Production concept
• Product concept
• Selling Concept
• Marketing concept- CB developed from this concept. Here
everything is executed from the point of view of Consumer.
 Emergence of CB
• Consumer behaviour in management is a very young discipline.

• Various scholars and academicians concentrated on it at a much later stage. It was during the
1950s, that marketing concept developed, and thus the need to study the behaviour of
consumers was recognised.

• Marketing starts with the needs of the customer and ends with his satisfaction. When every
thing revolves round the customer, then the study of consumer behaviour becomes a
necessity.

• Consumer behaviour can be defined as the decision-making process and physical activity
involved in acquiring, evaluating, using and disposing of goods and services.

• This definition clearly brings out that it is not just the buying of goods/services that receives
attention in consumer behaviour but, the process starts much before the goods have been
acquired or bought.

• Then follows a process of decision-making for purchase and using the goods, and then the
post purchase behaviour which is also very important, because it gives a clue to the
marketers whether his product has been a success or not.
 Consumer Behaviour
• As a field of study it is descriptive and also analytical/ interpretive.

• It is descriptive as it explains consumer decision making and behavior in the context of

individual determinants and environmental influences.

• It is analytical/ interpretive, as against a backdrop of theories borrowed from

psychology, sociology, social psychology, anthropology and economics, the study
analyzes consumption behavior of individuals alone and in groups.

• It makes use of qualitative and quantitative tools and techniques for research and
analysis, with the objective is to understand and predict consumption behavior.

• It is a science as well as an art. It uses both, theories borrowed from social sciences to
understand consumption behavior, and quantitative and qualitative tools and
techniques to predict consumer behavior.
 Interdisciplinary Nature
• 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)

• Economics (income and purchasing power)

 Questions answered
• To understand the likes and dislikes of the consumer,
extensive consumer research studies are being
conducted. These researches try to find out:
• ➢ What the consumer thinks of the company’s
products and those of its competitors?
• ➢ How can the product be improved in their opinion?
• ➢ How the customers use the product?
• ➢ What is the customer’s attitude towards the
product and its advertising?
• ➢ What is the role of the customer in his family?
 Consumer Behaviour Roles
• Initiator : Initiator is the individual who determines that some need or
want is not being fulfilled and authorises a purchase to rectify the
situation.
• Gatekeeper : Influences the family’s processing of information. The
gatekeeper has the greatest expertise in acquiring and evaluating the
information.
• Influencer : Influencer is a person who, by some intentional or
unintentional word or action, influences the buying decision, actual
purchase and/or the use of product or service.
• Decider : The person or persons who actually determine which product or
service will be chosen.
• Buyer : Buyer is an individual who actually makes the purchase
transaction.
• User(s) : User is a person most directly involved in the use or consumption
of the purchased product.
 Consumer Behaviour Roles
• Example 1:
• A child goes to a kindergarten school. She comes back home and asks her parents to buy her a set of
color pencils and crayons. Now the roles played are:
• 1. Initiator: the child in nursery school
• 2. Influencer: a fellow classmate
• 3. Decider: the father or the mother
• 4. Buyer: the father or the mother
• 5. User: the child
• Example 2:
• The lady of a house who is a housewife and spends her day at home doing household chores
watches TV in her free time. That is her only source of entertainment. The TV at home is giving
problem. She desires a new TV set, and says that she wants an LCD plasma TV. Now the roles played
are:
• 1. Initiator: the housewife (mother)
• 2. Influencer: a friend / neighbour
• 3. Decider: the husband or the son
• 4. Buyer: the husband or the son
• 5. User: the family
 Whom should the marketers target –
Buyers or Users?
• Does the decision dependon the type of products?
Different household members can perform each of the roles
singly or collectively.
• For example,
in deciding which videocassette to rent for entertainment,
parents might decide on the movie
but children may play a role directly by making their
preferences known, or indirectly when
parents keep the children’s likes in mind.
• One parent may actually go to the store to get the
video, but the entire family may watch it
 Development of Marketing Concept

• Marketing concept evolved in late 1950s and the field of consumer behaviour
is deeply rooted in
this concept.
After World War II, there was great demand for almost all sorts of products
and the marketing
philosophy was to produce cheap goods and make them available at as many
places as possible.
This approach suited the marketers because demand exceeded supply and
consumers were more
interested in obtaining the product rather than in any specific features.
This approach is called a production orientation and is based on the
assumption that consumers
will buy what is available and would not wait for what they really want . The
marketer does not
really care to know what consumer preferences are.
• The next stage has been product orientation, which assumes that
consumers will buy the product
that offers them the highest quality in terms of performance and
features. The company makes
all efforts to improve product quality. The focus is on the product
rather than on what the
consumers need or want. Professor Levitt has called this excessive
focus on product quality as
“marketing myopia.” This we see happen in highly competitive
markets where some companies
keep on adding unnecessary features, passing their cost on to the
consumers, in hopes of attracting
them.
• Selling orientation evolved as a natural consequence of production orientation and product
orientation. The marketer is primarily focused on selling the product that it unilaterally decided
to produce. The assumption of this approach is that consumers would not buy enough of this
product unless they are actively and aggressively persuaded to do so. This approach is known as
“hard-sell” and consumers are induced to buy what they do not want or need. The problem
with
this approach is that it does not take consumer satisfaction into account. This often leads to
dissatisfaction and unhappiness in consumers and is likely to be communicated by word-
ofmouth to other potential consumers, discouraging them to buy the product.
Soon marketers realised that they could easily sell more goods if they produced only those
goods that they had first confirmed consumers would buy. Thus, consumer needs and wants
became the marketer’s primary focus. This consumer-oriented marketing approach came to be
called as the marketing concept. The important assumption underlying marketing concept is
that a company must determine the needs and wants of its target markets and deliver the
desired
satisfactions more efficiently and effectively than the competition. This is the key to successful
marketing.
 The diversity of CB
• Human being differs from one to another. It is not easy to predict the human behaviour.
Human being differs in their taste, needs, wants and preferences. But one constant thing
is that we all are consumers.

• CB is a vast and complex subject. Understanding CB and “knowing consumers’ are not
that simple.

• It is almost impossible to predict with one hundred per cent accuracy, how consumer(s)
will behave in a given situation.

• Marketers are interested in watching people shopping, parading, playing, entertaining, as

they are keenly interested in the wide variety of behaviours they display.

• The efforts of all marketers are to influence the behaviour of consumers in a desired
manner.
• The term CB describes two different kinds of consuming entities:
the personal consumer and the organizational consumers. The
Personal consumer buys goods and services for his or her own
use, for the use of the household or as a gift for a friend. In each
of these contexts, individuals, who are referred to as end users
or ultimate consumers, buy the products for fine use.

• The second category of consumer- the organizational consumer-

includes profit and not-for-profit businesses, government
agencies (local, state, and national), and institutions (e.g.
Schools, hospitals, and prisons), all of which must buy products,
equipments and services in order to run their organization.
 Ethics of Marketing & Corporate
Environment:
• No environmental degradation- less promotion for tobacco & drug- the
societal marketing concept requires that all marketers adhere to
principles of social responsibility in the marketing of their goods &
services. According to the societal marketing concept, fast-food
restaurants should develop foods that contain less fat and starch and
more nutrients, and marketers shouldn’t advertise alcoholic beverages or
cigarettes to young people, or use young models or professional athletes
in liquor or tobacco advertising.

• Some critics are concerned that an in-depth understanding of CB makes it

possible for unethical marketers to exploit human vulnerabilities in the
market place and engage in other unethical marketing practices in order
to achieve individual business objectives. As a result, many trade
associations have developed industry wide code of ethics.