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Page 1 of 14
Prof.Nilesh Limbore
Unit No.2 Unit Name- Consumer Behaviour Subject- (106 Basics of Marketing)
Unit 2
Consumer Behaviour
Meaning and Definition:
Consumer behaviour is the study of how individual customers, groups or organizations select,
buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the
actions of the consumers in the marketplace and the underlying motives for those actions.
Marketers expect that by understanding what causes the consumers to buy particular goods and
services, they will be able to determinewhich products are needed in the marketplace, which
are obsolete, and how best to present the goods to the consumers.
The study of consumer behaviour assumes that the consumers are actors in the marketplace. The
perspective of role theory assumes that consumers play various roles in the marketplace. Starting
from the information provider, from the user to the payer and to the disposer, consumers play
these roles in the decision process.
The roles also vary in different consumption situations; for example, a mother plays the role of
an influencer in a childs purchase process, whereas she plays the role of a disposer for the
products consumed by the family.
Some selected definitions of consumer behaviour are as follows:
According to Engel, Blackwell, and Mansard, consumer behaviour is the actions and decision
processes of people who purchase goods and services for personal consumption.
According to Louden and Bitta, consumer behaviour is the decision process and physical
activity, which individuals engage in when evaluating, acquiring, using or disposing of goods
and services.
Page 2 of 14
Prof.Nilesh Limbore
Unit No.2 Unit Name- Consumer Behaviour Subject- (106 Basics of Marketing)
Psychological factors such as buying motives, perception of the product and attitudes towards the
product.
Situational factors such as physical surroundings at the time of purchase, social surroundings and
time factor.
Social factors such as social status, reference groups and family.
Cultural factors, such as religion, social classcaste and sub-castes.
The rich rural consumers may think twice to spend on luxuries despite having sufficient funds,
whereas the urban consumers may even take bank loans to buy luxury items such as cars and
household appliances. The consumer behaviour may also varies across the states, regions and
countries. It may differ depending on the upbringing, lifestyles and level of development.
Page 3 of 14
Prof.Nilesh Limbore
Unit No.2 Unit Name- Consumer Behaviour Subject- (106 Basics of Marketing)
Page 4 of 14
Prof.Nilesh Limbore
Unit No.2 Unit Name- Consumer Behaviour Subject- (106 Basics of Marketing)
The consumer behaviour is not only influenced by the status of a consumer, but it also reflects it.
The consumers who own luxury cars, watches and other items are considered belonging to a
higher status. The luxury items also give a sense of pride to the owners.
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.
Need
Page 5 of 14
Prof.Nilesh Limbore
Unit No.2 Unit Name- Consumer Behaviour Subject- (106 Basics of Marketing)
Social Status
Gifting Purpose
Why do you think an individual does not buy a product?
No requirement
Income/Budget/Financial constraints
Taste
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, and economic and so on.
The study of consumer behaviour explains as to:
Personal Sources
Page 6 of 14
Prof.Nilesh Limbore
Unit No.2 Unit Name- Consumer Behaviour Subject- (106 Basics of Marketing)
Commercial Sources
Public Sources
Personal Experience
Perception also plays an important role in influencing the buying decision of consumers.
Buying decisions of consumers also depend on the following factors:
Personal Sources - He might discuss his need with his friends, family members,
coworkers and other acquaintances.
Page 8 of 14
Prof.Nilesh Limbore
Unit No.2 Unit Name- Consumer Behaviour Subject- (106 Basics of Marketing)
Commercial sources - Advertisements, sales people (in Tims case it was the store manager),
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 - Individuals own experience, prior handling of a particular product (Tim
would definitely purchase a Dell laptop again if he had already used one)
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 customers analysis whether the product was useful to him or not, whether
the product fulfilled his need or not?
5 Common Factors Influencing Consumer Behaviour
Consumer behaviour can be broadly classified as the decisions and actions that influence
the purchasing behaviour of a consumer. What drives consumers to choose a particular product
with respect to others is a question which is often analyzed and studied by marketers. Most of the
selection process involved in purchasing is based on emotions and reasoning.
The study of consumer behaviour not only helps to understand the past but even predict the
future. The below underlined factors pertaining to the tendencies, attitude and priorities of people
must be given due importance to have a fairly good understanding of the purchasing patterns of
consumers
1. Marketing Campaigns
Advertisement plays a greater role in influencing the purchasing decisions made by consumers.
They are even known to bring about a great shift in market shares of competitive industries by
influencing the purchasing decisions of consumers. The Marketing campaigns done on regular
basis can influence the consumer purchasing decision to such an extent that they may opt for one
brand over another or indulge in indulgent or frivolous shopping. Marketing campaigns if
undertaken at regular intervals even help to remind consumers to shop for not so exciting
products such as health products or insurance policies.
Page 9 of 14
Prof.Nilesh Limbore
Unit No.2 Unit Name- Consumer Behaviour Subject- (106 Basics of Marketing)
2. Economic Conditions
Consumer spending decisions are known to be greatly influenced by the economic situation
prevailing in the market. This holds true especially for purchases made of vehicles, houses and
other household appliances. A positive economic environment is known to make consumers
more confident and willing to indulge in purchases irrespective of their personal financial
liabilities.
3. Personal Preferences
At the personal level, consumer behaviour is influenced by various shades of likes, dislikes,
priorities, morals and values. In certain dynamic industries such as fashion, food and personal
care, the personal view and opinion of the consumer pertaining to style and fun can become the
dominant influencing factor. Though advertisement can help in influencing these factors to some
extent, the personal consumer likes and dislikes exert greater influence on the end purchase made
by a consumer.
4. Group Influence
Group influence is also seen to affect the decisions made by a consumer. The primary influential
group consisting of family members, classmates, immediate relatives and the secondary
influential group consisting of neighbors and acquaintances are seen have greater influence on
the purchasing decisions of a consumer. Say for instance, the mass liking for fast food over home
cooked food or the craze for the SUVs against small utility vehicle are glaring examples of the
same.
5. Purchasing Power
Purchasing power of a consumer plays an important role in influencing the consumer behaviour.
The consumers generally analyze their purchasing capacity before making a decision to buy and
products or services. The product may be excellent, but if it fails to meet the buyers purchasing
ability, it will have high impact on it its sales. Segmenting consumers based on their buying
capacity would help in determining eligible consumers to achieve better results.
Understanding, analyzing and keeping track of consumer behaviour is very critical for a
marketing department to retain their position successfully in the market place. There are various
other factors too that influence consumer behaviour apart from the four listed above.
Page 10 of 14
Prof.Nilesh Limbore
Unit No.2 Unit Name- Consumer Behaviour Subject- (106 Basics of Marketing)
Physical risk The fear of injury from the Buying a car with defective brakes;
product buying drugs with unpleasant side
effects.
Financial risk Losing or wasting money Buying a car that depreciates quickly;
buying a computer and finding the price
falls to half within three months.
Functional risk Finding out the product will Buying a car that breaks down
not do the job you bought it constantly; buying a painkiller that does
for not stop the pain; buying a computer and
having to replace the falty hard drive
every two months.
Psychological risk The fear of looking foolish Buying a suit that friends think looks
weird on you; buying a Robin Reliant.
To deal with these risks people learn heuristics. These are simple rules that seem to work most
of the time. Heuristics are subject to alteration in the light of new knowledge.
Heuristics can be used by the consumer to simplify decision making. They may be stored in the
consumers memory, or may be constructed on the spot based on the information received, but
either way they allow the consumer to reach rapid decisions without overstretching his or her
cognitive capacity.
Use of heuristics in the extreme leads to habitual behaviour. For example I go to the same
restaurant on the same night with the same bloke to eat the same meal and have a natter. I
cannot be bothered with scanning a huge menu and have to go through that entire decision
making - I am usually too tired and simply want to enjoy the company.
Page 11 of 14
Prof.Nilesh Limbore
Unit No.2 Unit Name- Consumer Behaviour Subject- (106 Basics of Marketing)
Some customers may have less rigid heuristics but they may still be a barrier to purchasing. A
customer has the price of 1000 as the most he or she will pay for a computer. This may be so
strong that a good value for money machine at 1,200 will be spurned in order to buy one which
is only half as good for 800.
Recognition of a problem
(need)
Determination of
characteristics, specification
and quantity of needed item
Page 12 of 14
Prof.Nilesh Limbore
Unit No.2 Unit Name- Consumer Behaviour Subject- (106 Basics of Marketing)
Purpose of The individual consumers buy The organizations buy goods and services for
Buying goods and services for ultimate their business needs. The buying purpose of
use or satisfy their needs. The them is to earn profit by using and reselling
buying purpose of such the goods and services.
consumers is not to earn profit by
reselling the goods and services.
Market Most of the consumers may not Organizational purchase criteria are
Knowledge have adequate knowledge and specifically defined. Organizational buyers
information about market usually have fewer brands to choose from
situation, available goods and than do individuals, and their purchases must
Page 13 of 14
Prof.Nilesh Limbore
Unit No.2 Unit Name- Consumer Behaviour Subject- (106 Basics of Marketing)
services, etc. The educated be evaluated on the basis of criteria that are
customers may be aware and specific to the overall needs of the
have knowledge about market organization. The organizational buyers have
and goods. full knowledge of market and suppliers.
Types of Consumers buy many goods to Organizational buyers buy limited goods to
Goods use to satisfy personal or family use to conduct business.
needs.
Effect Consumer buying behaviour is Many individuals are involved in the buying
effected by age, occupation, process. Within large organizations, rarely is
income level, education, gender one individual solely responsible for the
etc. of consumers. purchase of products for the purchase of
products or services. Instead, many
individuals and departments may be involved
and departments may be involved in the
buying process.
Buying The consumer buying process is Buyers and sellers in the organizational
Process very simple. No need to fulfil any market must maintain extensive contact.
formality. There is also no need
to maintain extensive contact
with sellers.
Page 14 of 14
Prof.Nilesh Limbore