By: Amit Tyagi

Introduction
Consumer behaviour can be defined as the decision-making process and physical activity involved in acquiring, evaluating, using and disposing of goods and services. Process starts much before the goods have been acquired or bought. Process of decision-making for purchase and using the goods, and then the post-purchase behaviour shows the acceptance of goods/service by the end user

Who are consumers???

It generally refers to any one engaging in any one or all of the activities like decision making or acquiring, judging, using & disposing of goods/service. End user of any good/service.

Consumer Behaviour Role

Reason for Studying Consumer behaviour

Consumer decisions are affected by the behaviour either individual or group. Consumer behaviour is a complex, dynamic, multi-dimensional process, and all marketing decisions are based on assumptions about consumer behaviour.

Micro Perspective: It involves understanding consumer for the purpose of helping firm or organization to achieve its objectives.

Societal Perspective is on the macro level. Consumers collectively influenced economic and social conditions within a society. Consumers strongly influence what will be the product, what resources will be used and it affects our standard of living.

Contd
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 companys products and those of its competitors? How can the product be improved in their opinion? How the customers use the product? What is the customers attitude towards the product and its advertising? What is the role of the customer in his family?

Framework for studying Consumer Behaviour

Consumer & Market Segment

By market segmentation we imply that the entire market is broken down into smaller group having similar wants. They are homogeneous in themselves and heterogeneous with other groups. The market can be broken down on various bases. These are Demographic, Psychographic, Benefit Segmentation etc.

Consumers are different in their needs, wants, desire and are from different backgrounds, education experience therefore segmenting the market is very necessary for effective marketing of goods/services. Segmentation helps in expanding the market by better satisfying the specific needs or desires of particular customers.

Basis for Segmentation

Geographic Segmentation Demographic Segmentation Psychological/Psychographic Sociocultural Segmentation Use-Related Segmentation Benefit Segmentation

Environmental Influences on Consumer Behaviour

Introduction
The factors that influence consumer behaviour can be classified into Internal factors or (individual determinants) and, External environmental factors. External factors do not affect the decision process directly, but percolate or filter through the individual determinants, to influence the decision process

Individual Determinants

Motivation and Involvement

Motivation is that internal force that activates some needs and provides direction of behaviour towards fulfillment of these needs.

Maslows Hierarchy Need

Attitudes
These are learned predispositions towards people, objects and event Attitudes are responsible for our responses and are not inborn but are learnt from people around us. A person having a carefree attitude will buy an object without much involvement. People who want to play safe and avoid risk talking, will go for a safe investment.

Personality and Self - concept

Sum total of our mental, physical and moral qualities and characteristics that are present in our self and that make us what we are. Consumers try to buy the products that match their personality

Learning and Memory

We are exposed to a wide range of information, but retain only a small portion of it. We tend to remember the information that we are interested in or, that is important to us Our motives, attitudes, personality filters the information. Keeping only relevant information in our minds and, keeping the others out. This is known as selective retention.

Information Processing
Consumers assimilate and evaluate selective information and this reflects on their motives, attitudes and personality and self-concept. Different individuals can evaluate same information in a different manner.

External Determinants

Cultural Influences
Complex sum total of knowledge, belief, traditions, customs, art, moral law or any other habit acquired by people as members of society Different emphasis is given by different cultures for the buying, use, and disposing of products

Sub-cultural Influences
Within a culture, there are many groups or segments of people with distinct customs, traditions and behaviour

Products are designed to suit a target group of customers that have similar cultural background and are homogeneous in many respects.

Social Class
By social class we refer to the group of people who share equal positions in a society. Social class is defined by parameters like income, education, occupation, etc. Within a social class, people share the same values and beliefs and tend to purchase similar kinds of products. Their choice of residence, type of holiday, entertainment, leisure all seem to be alike.

Social Group Influences

A group is a collection of individuals who share some consumer relationship, attitudes and have the same interest These groups could be primary where interaction takes place frequently and, consists of family groups

Secondary groups are a collection of individuals where relationship is more formal and less personal in nature like the Lions, Rotary

Family Influence
Children learn the family tradition and customs, and they imbibe many behavioural patterns from their family members, both consciously and unconsciously.

Types: Nucleus families & Joint family

Personal Influences
Each individual processes the information received in different ways and evaluates the products in his own personal way. This is irrespective of the influence of the family, social class, cultural heritage, etc.

Some individuals may lay greater emphasis on price, others on quality, still others on status, symbol, convenience of the product, etc

Other Influences
National or regional events Situation variables such as product display, price reduction, free gifts and attractive offers also influence consumer behaviour

Diffusion of Innovation

Introduction
Diffusion is a process by which the acceptance of an innovation/new product, a new idea, a new service, is spread by communication to members of a social system over a period of time.

Innovation
An innovation is an idea, practice, or product, perceived to be new by an individual or a group. A product is said to be an innovation when it is perceived by the potential market as a change, and not by a technological change brought in it.

Classification of new product/service

Firm Oriented Product Oriented Continuous, Dynamically continuous, Discontinuous innovation Market Oriented Consumer-oriented Items

Diffusion Process
Diffusion process is the manner in which innovations spread throughout the market. Spread refers to the purchase behaviour where a product is purchased with some continuing regularity.

Factors influencing-Spreading of Innovation

Type of group Perceived risk Type of decision Marketing effort Fulfillment of felt need Trial Compatibility Relevant advantage Complexity Observability

Rate of Diffusion
The rate of diffusion can be low or high. Marketers have 2 options that can influence the rate of diffusion. 1. Market Penetration Strategy 2. Market Skimming Strategy