CONSUMER BEHAVIOUR

Prepared By:
Mrs. Gurpreet K Chhabra
Astt. Prof. MERI

Overview
of
Consumer Behavior

Learning Objectives
1.
2.

3.
4.

To Understand What Consumer Behavior Is and the

Different Types of Consumers.
To Understand the Relationship Between Consumer
Behavior and the Marketing Concept, the Societal
Marketing Concept, as Well as Segmentation, Targeting,
and Positioning.
To Understand the Relationship Between Consumer
Behavior and Customer Value, Satisfaction, Trust, and
Retention.
To Understand How New Technologies Are Enabling
Marketers to Better Satisfy the Needs and Wants of
Consumers.

3
Chapter One Slide

Overview of Consumer Behavior

Definition 1: Consumer behavior:
The study of how individuals make
decisions:
On how to spend their:
Available resources( time, money effort)
On various consumption- related items.

Overview of Consumer Behavior

Definition 2: Consumer behavior

The behavior that consumers

display in :
Searching for,
Purchasing,
Using,
Evaluating,
And disposing of products and
services
That they expect will satisfy their
needs.
5

Type of Consumers
Personal Consumer :
The individual who buys goods and services for his
or her own use, for household use, for the use of a
family member, or for a friend.

Organizational Consumer :
A business, government agency, or other
institution (profit or nonprofit) that buys the goods,
services, and/or equipment necessary for the
organization to function.

Why do we need to study

Consumer Behavior?

Because no longer can we take

the customer/consumer for
granted.

Relevance of Consumer Behavior

The study of consumer behavior is very
relevant for marketers because:
Information and knowledge of buyer
motives and habits will enable them to draft
suitable marketing programmes
accordingly.

Consumer Behavior & Decision

Making interdisciplinary
Consumer behavior as a new discipline
borrowed concepts from other scientific
disciplines such as:
Anthropology
Psychology
Economics
History and geography
Socio-psychology
9

Anthropology
The influence of the
culture (within and across)
& society on the
individuals.
Emphasis on crosscultural differences

10

Psychology
Study of human thinking
and behavior
Some issues
Personality
Personal development
Cognition (thinking),
perception
Attention and its limitations
Learninge.g., acquired
tastes
11

Economics
Basic economic issues
Supply and demand
Rational decision making
Perfect information

Emphasis on predicting behavior

Complications in real life
Behavioral economicse.g.,
mental accounting
12

History and Geography

Origins of behavior,
perspectives, and
traditions
Impact of geography on
individuals
Isolation
Language development
Climate

Geographic determinism

13

Socio- Psychology
Is the study of how persons
are influenced by groups.
Cultural and interpersonal
influences on
consumptione.g.,
Fads, fashions
Diffusion of innovation
Popular culture

14

Dynamic Consumer Behavior

Thinking, feelings, and actions of individual
consumers, targeted consumer groups, and
society at large are constantly changing.
Requires ongoing consumer research and
analysis of important trends.
Makes development of marketing strategies
difficult and exciting
Shorter product life-cycle increases importance of
constant innovation

15

Marketing concepts

Production concept
Product concept
Selling concept
Marketing concept
Societal concept

Shift of focus to better serve

consumers for major reasons
Increased consumer interest in world markets.
Dramatic increase in the quality of consumer and
marketing research.
Use of technology to identify and know customers personally
Ability to track consumer reactions

Development of the Internet as a marketing tool.

E-marketing potential
Increased importance of consumer behavior research
Ability to conduct marketing research studies
17

Successful Relationships

Customer
Value

Customer
Satisfaction

Customer
Retention
18

Impact of Digital Technologies

Consumers have more power and access to
information.
Marketers can gather more information about
consumers .
The exchange between marketer and customers
is interactive and instantaneous and goes
beyond the PC.
Marketers must offer more products and
services.
19

Consumer Research
Consumer research has developed as an
extension to the field of marketing
research with emphasis on consumer
behavioral aspects.
The initial thrust on studying CB by
marketers was done for two reasons:
To determine as to why consumers made the
purchase decisions.
To understand how consumers would react to
promotional messages.
20

Model of Consumer Behavior

Product
Price

Marketing and
Other Stimuli

Economic
Technological

Place

Political

Promotion

Cultural

Buyers
Decision
Process

Product Choice
Brand Choice

Dealer Choice

Buyers Black Box

Buyers Response

Characteristics
Affecting
Consumer
Behavior

Purchase
Timing
Purchase
Amount

The Buyer Decision Process

Need Recognition
Information Search

Evaluation of Alternatives
Purchase Decision
Postpurchase Behavior

The Buyer Decision Process

Step 1. Need Recognition
Need Recognition
Difference between an actual state and a desired state

Internal Stimuli

External Stimuli

Hunger

TV advertising

Thirst

Magazine ad

A persons normal
needs

Radio slogan
Stimuli in the
environment

The Buyer Decision Process

Step 2. Information Search
Personal Sources

Family, friends, neighbors

Most influential source of
information

Commercial Sources

Advertising, salespeople
Receives most information
from these sources

Public Sources

Experiential Sources

Mass Media
Consumer-rating groups
Handling the product
Examining the product
Using the product

The Buyer Decision Process

Step 3. Evaluation of Alternatives
Product Attributes
Evaluation of Quality, Price, & Features

Degree of Importance
Which attributes matter most to me?

Brand Beliefs
What do I believe about each available brand?

Total Product Satisfaction

Based on what Im looking for, how satisfied

would I be with each product?

Evaluation Procedures
Choosing a product (and brand) based on one
or more attributes.

The Buyer Decision Process

Step 4. Purchase Decision
Purchase Intention
Desire to buy the most preferred brand

Attitudes
of others

Unexpected
situational
factors

Purchase Decision

The Buyer Decision Process

Step 5. Postpurchase Behavior
Consumers Expectations of
Products Performance
Products Perceived
Performance

Satisfied
Customer!

Dissatisfied
Customer
Cognitive Dissonance

CONSUMER DECISION
RULES
Compensatory decision rule- On the basis of
this decision rule, a shopper evaluates store or
brand alternatives in respect of each salient
attribute and assigns weight for each store or
brand in a consideration set .The computed
value reflects the stores relative edge as a
potential purchase choice . The proposition is
that the shopper will select the store or brand
that scores the highest among the options
evaluated. This rule is characterized by allowing
a positive evaluation of a store or brand on one
attribute to compensate or make for a negative
evaluation on some other attribute.

 Non- compensatory decision rule - on the basis of this rules

consumers do not balance positive assessment of store on one
dimension against a negative evaluation on other dimensions:
~ Conjunctive rule - Here the shopper establishes a specific, minimal
acceptable level as a cut off point for each dimension. If a particular
prospective store falls below the cut off point on any dimension
(evaluative criteria), it is dropped from the consideration set.
~ Disjunctive rule Here a shopper sets up a specific ,minimal
acceptable level as a cut off point for each dimension . Acceptability
of a store depends if the store meets or exceeds the limit
established for any one dimension considered most important by the
customer.
~ Lexicographic decision rule Here the shopper first ranks the
dimensions in terms of their perceived salience or importance .The
shopper then compares the various brand alternatives in terms of a
single attribute that is considered most important. If one brand
scores sufficiently high on this top-ranked dimension (regardless of
the scores on any other attributes) ,it is selected & process ends ,
else process continues with next highest alternative.

FISKS CONCEPTUAL MODEL OF

DEPARTMENT STORE IMAGE
DIMENSION

DETERMINANTS

Locational convenience

1) Access route
2) Traffic barrier
3) Travelling time
4) Parking availability

Merchandise suitability

1) Number of brands stocked

2) Quality of line
3) Breadth of assortment
4) Depth of assortment
5) Number of outstanding
departments in the store

Value for price

1) Price of a particular item in a particular

store
2) Price of same item in another store
3) Price of another item in the same store
4) Price of same item in the substitute
store
5) Trading stamps & discounts

Sales effort and store

services

1)
2)
3)
4)
5)
6)
7)

Courtesy of sales clerks

Helpfulness of sales clerks
Reliability and usefulness of
advertising
Billing procedures
Adequacy of credit arrangements
Delivery promptness and care
Eating facilities

Congeniality

Post-transaction
satisfaction

1)
2)
3)
4)
5)

Store layout
Store dcor
Merchandise displays
Class of customers
Store traffic and congestion

1)
2)

Satisfaction with good in use

Satisfaction with returns and
adjustments
Satisfaction with price paid
Satisfaction with accessibility to
store

3)
4)

CUSTOMER VALUE

Customers are value maximisers,and they tend to take

rational purchase decisions
Concept of customer Delivered value/customer perceived
value-it is the difference between prospective custmers
evaluation of all the costs of an offering and the
alternatives.
Customer delivered value=total customer value-total
customer cost.
Total customer value-is the percieved monetary value of
the bundle of the bundle of economic,functional &
psychological benefits that customer expect from a given
market offering.
Total customer cost-is the bundle of costs,customers
expect to incur in evaluating,obtaining,using&disposing
off,the given market offering.

Customer satisfaction-S=P-E
S=SATISFACTION LEVEL
P=PERFORMANCE AS PERCIEVED BY CUSTOMER
E=PERFORMANCE AS ALREADY EXPECTED BY THE CUSTOMER.
Therefore,P<E, P=E, P>E.

Consumer Buying Decision Process

Marketers Must Identify and Understand:
Who Makes the Buying Decision
Types of Buying Decisions
Stages in the Buying Process

CONSUMER BUYING
BEHAVIOR
BUYING ROLES:
initiator--a person who first suggests the idea of
buying the product or service
influencer--a person whose views or advice
influences the decision
decider--a person who decides on any component of
a buying decision
buyer--the person who makes the actual purchase
user--a person who consumes the product/service.

Types of Buying Decisions

High
Involvement

Low
Involvement

Significant
differences
between
brands

Complex
Buying
Behavior

VarietySeeking
Behavior

Few
differences
between
brands

DissonanceReducing Buying
Behavior

Habitual
Buying
Behavior

VARIOUS TYPES OF BUYING

SITUATIONS
Complex buying situation-purchasing a car, computer, house
etc.stress is on pre-purchase councelling.Involvement on marketers
part is very high because brands differ widely.
Habitual buying situation-purchasing grocery items, low involvement
because brands differ marginally marketers job is to make it
available easily.
Dissonance-reducing buying situation-purchasing carpets, I-tech
electric devices, personal computers etc.High involment is required
at post purchase level so as to reduce post purchase dissonance of
customers.
Variety-seeking buying situation-purchasing
cookies,perfumes,cosmetics products,clothes,shoes etc.Low
involvement.stress is on attracting retailers& customers through
attractive offers, prompting them to switch brands.

Levels of Consumer Decision

Making
Extensive Problem
Solving

Limited Problem
Solving

Routine Response
Behavior
38

Levels of Consumer Decision

Making
Extensive Problem Solving
A lot of information needed
Must establish a set of criteria for
evaluation

Limited Problem Solving

Criteria for evaluation established
Fine tuning with additional information

Routinized Response Behavior

Usually review what they already know
39
Chapter Fifteen Slide

A search by the consumer to establish

the necessary product criteria to evaluate
knowledgeably the most suitable product
to fulfill a need.

Extensive
Problem
Solving

Problem solving occurs when

buyers purchase more expensive
important or technically complicated
product/service for the first time.
less frequently purchased products
in an unfamiliar product category
requiring information search &
evaluation
40

A limited search by a consumer for a

product that will satisfy his or her
basic criteria from among a selected
group of brands.

Limited
Problem
Solving

Problem solving occurs when buyers

are confronted with an unfamiliar
brand in a familiar product category.
Often occurs when consumer
purchasing new, updated version of
something already purchased before.

41

Routinized
Response
Behavior

At this level, consumers have

experience with the product
category and a well-established
set of criteria to evaluate the
brands is considered.
Response behavior occurs
when buyers purchase low cost,
low risk, brand loyal, frequently
purchased, low personal
identification or relevance, items
with which they are familiar.
42

Types of consumer involvement

and decision making
Routine

Limited

Extensive

Involvement

Short

Low to
moderate

High

Time

Low

Short to
moderate

Long

Cost

Short

Low to
moderate

High

Information
Search

Internal only

Mostly
internal

Internal &
external

Number of
alternatives

one

few

many
43

 Motivation is the
driving force within
individuals that impels
them to action.
Needs are the
essence of the
marketing concept.
Marketers do not
create needs but can
make consumers
aware of needs.

 Innate Needs
Physiological (or biogenic) needs that are
considered primary needs or motives

Acquired Needs
Learned in response to our culture or
environment. Are generally psychological and
considered secondary needs

 The sought-after results of motivated

behavior
Generic goals are general categories of
goals that consumers see as a way to
fulfill their needs
Product-specific goals are specifically
branded products or services that
consumers select as their goals

Is a body spray
an innate or
acquired
need?

Positive

Motivation
A driving force
toward some
object or condition
Approach Goal
A positive goal
toward which
behavior is
directed

Negative

Motivation
A driving force
away from some
object or condition
Avoidance Goal
A negative goal
from which
behavior is
directed away

 Rationality implies that consumers select

goals based on totally objective criteria,
such as size, weight, price, or miles per
gallon
Emotional motives imply the selection of
goals according to personal or subjective
criteria

 What products
might be purchased
using rational and
emotional motives?
What marketing
strategies are
effective when
there are combined
motives?

 Needs are never fully satisfied

New needs emerge as old needs are
satisfied
People who achieve their goals set new
and higher goals for themselves

 Are used when a consumer cannot attain

a specific goal he/she anticipates will
satisfy a need
The substitute goal will dispel tension
Substitute goals may actually replace the
primary goal over time

 Failure to achieve a goal may result in

frustration.
Some adapt; others adopt defense
mechanisms to protect their ego.

 Methods by which people mentally

redefine frustrating situations to protect
their self-images and their self-esteem

Construct

Items

Aggression

In response to frustration, individuals may resort to aggressive

behavior
in attempting to protect their self-esteem. The tennis pro
who slams his tennis racket to the ground when disappointed with
his game or the baseball player who physically intimidates an
umpire
for his call are examples of such conduct. So are consumer
boycotts of companies or stores.

Rationalization

People sometimes resolve frustration by inventing plausible

reasons
for being unable to attain their goals (e.g., not having enough
time to practice) or deciding that the goal is not really worth
pursuing
(e.g., how important is it to achieve a high bowling score?).

Regression

An individual may react to a frustrating situation with childish or

immature behavior. A shopper attending a bargain sale, for
example,
may fight over merchandise and even rip a garment that another
shopper will not relinquish rather than allow the other

Construct

Items

Projection

An individual may redefine a frustrating situation by projecting

blame for his or her own failures and inabilities on other
objects/persons. Thus the golfer who misses a stroke may blame
his golf clubs .

Daydreaming

Daydreaming or fantasizing enables the individual to attain

imaginary gratification of unfulfilled needs.

Identification

People resolve feelings of frustration by subconsciously identifying

with other persons or situations that they consider relevant. For e.g.
if the individual experiences frustration, he overcomes the frustration
by using the advertised product.

Repression

Another way that individuals avoid the tension arising from

frustration is by repressing the unsatisfied need. Thus individuals
may force the need out of their conscious awareness.

What type of
defense
mechanism is
this
spokesperson
using in this
ad?

Physiological arousal
Emotional arousal
Cognitive arousal
Environmental arousal

Chapter Four
Slide

58

 Behaviorist School
Behavior is response to stimulus
Elements of conscious thoughts are to be ignored
Consumer does not act, but reacts

Cognitive School
Behavior is directed at goal achievement
Needs and past experiences are reasoned,
categorized, and transformed into attitudes and beliefs

Chapter Four
Slide

59

 Researchers rely on a
combination of
techniques
Qualitative research is
widely used
Projective techniques
are often very
successful in
identifying motives.
Chapter Four
Slide

60

 Term coined in the 1950s by Dr. Ernest

Dichter
Based on premise that consumers are not
always aware of their motivations
Identifies underlying feelings, attitudes,
and emotions