Consumer

Behavior
Based on concepts from
• Psychology
• Sociology
• Anthropology
• Marketing
• Economics

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 Why do we need to study
Consumer Behavior?
• Because no longer can we take the
customer/consumer for granted.
• The more successful a firm has been in the past, the
more likely is it to fail in the future.
• Because people tend to repeat behavior for which
they have been rewarded.
• Marketing can’t be standardised
 Because cross - cultural styles, habits, tastes, prevents
such standardisation

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 Definitions
• Consumer Behavior
 Buying behavior of individuals and
households that buy products for
personal consumption.
• Consumer Market
 All individuals/households who buy
products for personal consumption.

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 Factors influencing Consumer
Buyer Behavior
• Marketing mix
• Marketing environment
• Buyer characteristics
• Buyer decision process
• Buyer decision

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 Characteristics Affecting
Consumer Behavior
Key Factors
• Cultural • Culture
• Social • Subculture
• Personal • Social Class
• Psychological

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Characteristics Affecting
Consumer Behavior
• Mature Consumers
 Consumers aged 50+ is growing rapidly.
 Mature consumers control 50% of all
discretionary income.
 Attractive market for travel, restaurant, and
cosmetics products, among others.

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 Characteristics Affecting
Consumer Behavior
Key Factors • Groups
 Membership
 Reference
• Cultural  Aspirational groups
• Social  Opinion leaders
 Buzz marketing
• Personal • Family
 Children can influence
• Psychological
• Roles and Status

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 Characteristics Affecting
Consumer Behavior
Key Factors • Age and life cycle
• Occupation
• Cultural • Economic situation
• Lifestyle
• Social  Activities, interests, and
opinions
• Personal  Lifestyle segmentation
• Personality and self-concept
• Psychological  Brand personality

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Characteristics Affecting
Consumer Behavior
Brand Personality Dimensions

• Sincerity • Excitement
• Ruggedness • Competence
• Sophistication

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 Characteristics Affecting
Consumer Behavior
Key Factors • Motivation
 Needs provide motives for
consumer behavior
 Motivation research
• Cultural  Maslow’s hierarchy of needs
• Perception
• Social  Selective attention, selective
distortion, selective retention
• Personal • Learning
 Drives, stimuli, cues, responses
• Psychological and reinforcement
• Beliefs and attitudes

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Characteristics Affecting
Consumer Behavior
Maslow’s Hierarchy of Needs
Self-actualization
Esteem Needs
Social Needs
Safety Needs
Physiological Needs

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 Types of Buying-Decision
Behavior
Difference Involvement Level
between brands High Low

Significant Complex Variety-seeking

Differences buying behavior buying behavior

Few
Dissonance- Habitual buying
Differences reducing buying behavior
behavior

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• Complex buying behavior is where the individual
purchases a high value brand and seeks a lot of
information before the purchase is made.

• Habitual buying behavior is where the individual

buys a product out of habit e.g. a daily newspaper,
sugar or salt.

• Variety seeking buying behavior is where the

individual likes to shop around and experiment with
different products. So an individual may shop around for different
breakfast cereals because he/she wants variety in the mornings!

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• Dissonance reducing buying behavior is
when buyer are highly involved with the
purchase of the product, because the
purchase is expensive or infrequent. There is
little difference between existing brands.
An example would be buying a diamond ring. There is
perceived little difference between existing diamond brand
manufacturers.

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 The Buyer Decision
Process
 Need recognition
 Information search
 Evaluation of alternatives
 Purchase decision
 Post-purchase behavior
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 The Buyer Decision
Process
Process Stages
• Need recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Postpurchase behavior
• Needs can be triggered
by:
 Internal stimuli
 Normal needs become
strong enough to drive
behavior
 External stimuli
 Advertisements
 Friends of friends
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 The Buyer Decision
Process
Process Stages • Consumers exhibit
heightened attention or
• Need recognition actively search for
information.
• Information search
• Evaluation of alternatives • Sources of information:
 Personal
• Purchase decision
 Commercial
• Postpurchase behavior  Public
 Experiential
• Word-of-mouth
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 The Buyer Decision
Process
Process Stages
• Need recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Postpurchase behavior
• Evaluation procedure depends
on the consumer and the
buying situation.
• Most buyers evaluate multiple
attributes, each of which is
weighted differently.
• At the end of the evaluation
stage, purchase intentions are
formed.
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 The Buyer Decision
Process
Process Stages
• Need recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Postpurchase behavior
• Two factors intercede
between purchase
intentions and the
actual decision:
 Attitudes of others
 Unexpected situational
factors
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 The Buyer Decision
Process
Process Stages
• Need recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Postpurchase behavior
• Satisfaction is important:
 Delighted consumers engage
in positive word-of-mouth.
 Unhappy customers tell other
people.
 It costs more to attract a new
customer than it does to
retain an existing customer.
• Cognitive dissonance is
common
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Joint Decision Making Process

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Buyer Decision Process for
New Products
• New Products
 Goods, service or idea that is perceived
by customers as new.
• Stages in the Adoption Process
 Marketers should help consumers move
through these stages.
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Buyer Decision Process for
New Products
Stages in the Adoption Process
• Awareness
• Interest
• Evaluation
• Trial
• Adoption

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Buyer Decision Process for
New Products
Product Characteristics
• Relative Advantage • Complexity
• Compatibility • Divisibility
• Communicability

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 Buyer’s Decision
• Product Choice
• Brand Choice
• Dealer Choice
• Purchase Timing
• Purchase Amount

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 Model of
Consumer Behavior

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 Stimulus Response Model
ENVIRONMENTAL BUYER'S BLACK BOX
FACTORS (Buyer’s Mind)
BUYER'S
RESPONSE
Marketing Environmental Buyer Decision
Stimuli Stimuli Characteristics Process

Problem
recognition Product choice

Information Brand choice

Economic Attitudes search
Product Technological Motivation
Dealer choice
Price Political Perceptions Alternative
Place Cultural Personality evaluation
Purchase
Promotion Demographic Lifestyle
Purchase timing
Natural Knowledge
decision
Purchase
Post-purchase amount
behavior
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 Model of
Consumer Behavior
• Stimulus Response Model
 Marketing and other stimuli enter the
buyer’s “black box” and produce certain
choice/purchase responses.
 Marketers must figure out what is inside
of the buyer’s “black box” and how
stimuli are changed to responses.

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The first stage of understanding buyer behavior is to focus on the factors that
determine he “buyer characteristics” in the “black box”. These can be
summarized as follows:

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 Some Consumer Behavior Roles
• Initiator - The person who determines that some need
or want is not being met.
• Influencer - The person who intentionally or
unintentionally influences the decision to buy the
actual purchase and/or use of product or service.
• Buyer - The person who actually makes the purchase.
• User - The person who actually uses or consumes the
product or service.

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 APPLICATIONS OF
CONSUMER BEHAVIOUR IN
MARKETING
• Analyze market opportunity
 Study of consumer behavior helps in
identifying needs and wants which are
unfulfilled
• Selecting the target market
 The study of the consumer trends would reveal
distinct groups of consumers with very distinct
needs and wants.

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 APPLICATIONS OF
CONSUMER BEHAVIOUR IN
MARKETING
• Determining the product mix
 Having identified the unfulfilled need
slot and having modified the product to
suit differing consumer tastes, the
marketer now has to determine the right
mix of product, price promotion and
advertising.

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 CONSUMER
BEHAVIOUR AND
LIFESTYLE
MARKETING

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 DEMOGRAPHICS,
PSYCHOGRAPHICS AND
LIFESTYLE
• Demographic variables help marketers
"locate" their target market.

• Psychographic variables provide the marketer

with more insight about the segment.
• Lifestyle analysis adds a great amount of
understanding to a typical demographic
description.

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 CHARACTERISTICS OF
LIFESTYLE
• Lifestyle is a group phenomenon
• Lifestyle pervades various aspects of
life
• Lifestyle implies a central life interest
• Lifestyles vary according to
sociologically relevant variables

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 INFLUENCES ON
LIFESTYLE
• Culture & society
• Group & individual expectations and
values
• Lifestyle patterns
• Purchase decisions
• Market reaction of consumers
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 AIO APPROACHE TO STUDY
LIFESTYLE

• What are activities? Activities indicate how a

consumer/family spends his/her/their time.
• What are interests? Interests are a family's or
consumer's preferences or priorities.
• What are opinions? Opinions are how a
consumer feels about a wide variety of events
and things.

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