Consumer Behaviour

Module – 1
Dr.Virupaksha Goud

Topics to be covered :
Introduction to the study of Consumer Behaviour : Meaning & Definition of CB, Difference between
Consumer and Customer, Nature and characteristics of Indian Consumers
Consumer Movement in India, Rights and Responsibilities of consumers in India, Benefits of
Consumerism

Meaning and Definition of Consumer Behaviour

Consumer Behaviour refers to “the mental and emotional processes and the observable behaviour
of consumers during searching for, purchasing and post consumption of a product or service.
The term consumer behaviour is defined as the behaviour that consumers display in searching for,
purchasing, using, evaluating and disposing of products and services that they expect will satisfy
their needs. Consumer Behaviour focuses on how individuals make decisions to spend their available
resources (time, money, effort) on consumption-related items. That includes what they buy, why
they buy it, when they buy it and where they buy it, how often they buy it, how often they use it,
how they evaluate it after the purchase, the impact of such evaluations on future purchases , and
how they dispose it off.

Difference between Consumer and Customer

A consumer is anyone who typically engages in any one or all of the activities like searching for,
purchasing and post consumption of a product or service.
The term consumer is used for both personal consumers and organizational consumers and
represents two different kinds of consuming entities. The personal consumer buys goods and
services for her or his personal use, or for household consumption, or for just one member of the
family.
The other category of consumer is the organizational consumer, which includes profit and not-for-
profit organizations. Manufacturing firms buy raw materials to produce and sell their own goods.
Anyone who regularly makes purchases from a store or a company is termed as customer of that
store or the company. Thus, a customer is typically defined in terms of specific store or company.

A customer – purchases and pays for a product or service

• A consumer – is the ultimate user of the product or service; the consumer may not have paid for
the product or service
Consider the following example:
• A food manufacturing business makes own-label, Italian ready meals for the major supermarkets.
• So far as the business is concerned, the customer is the supermarket to whom it supplies meals
• The consumer is the individual who eats the meal

Nature and Characteristics of Indian Consumers

 Working men and non-working women exhibit exactly the same kind of buying behaviour,
that of spending a lot of time browsing at shops for categories that interest them. For
example, men buying books, music and sports goods will spend the same time as women
buying groceries. This has implications for retail store layouts as far as merchandise planning
goes. This has been successfully implemented by Spencer’s and other retailers.
  Urban, educated, affluent Indians think and speak by and large in their native languages,
even though they read English. This has implications for marketers as far as communication
and media plans go. PepsiCo is a company that comes to mind on this aspect, with their
award winning slug lines over the years.

 Young consumers consume products very differently than older ones. They are far less
emotional in their buying behaviour, and much more experimentative. Witness young,
single and newly married consumers who don’t get newspapers delivered home anymore.
Instead, they consume news on the Internet. Media conglomerates like Bennett, Coleman
and Company have used this trend wisely with their online newspaper editions.

 A so-called SEC A consumer will display SEC C behaviour, depending on the nature of goods
and services bought. For example, someone buying a few hundred rupees of vegetables
will still ask for some free dhania or lemons as a top up! This has implications for fruits and
vegetables retailers. Again, a retailer like Spencer’s has incorporated these learnings into
their weekly and monthly catalogues that communicate deals and offers.

 Female buyers of automobiles and electronic goods look at different requirements when
buying them, but are equally aware of their features and benefits as male buyers.
Successful examples include the two-wheeler industry that has launched products targeted
specifically for women. Also, Sony comes to mind with their Vaio range of coloured
laptops.

 With a rise in affluence, advances in medical science and health and nutrition, in urban
areas Indians are becoming physically bigger in size. This is especially true for the younger
generation. The few that have taken note of this, such as Revolution, Mustard and
Pantaloons, have benefited enormously.

 Indian consumers are very proud of their Indianness. While we are open to western ideas
and concepts, we are equally at home with our home grown stuff. Witness the number of
multinational corporations that have changed their merchandise portfolio, communication
tonality and even pricing, to get a slice of the Indian market. Examples that come to mind
are McDonald’s, Pizza Hut and Dominos.

 Still conventional in terms of using credit card for payment and online shopping but now
there has been a transition in the behaviour of customer.

 Basically, all Indian consumers are lazy and convenience oriented. As a result, marketers
have come up with applications like Bigbasket, makemytrip, bookmyshow etc to provide
convenience to the end consumers.
Consumer Movement in India
  Consumerism is used to refer to the consumerist movement or consumer activism, which
seeks to protect and inform consumers by requiring such practices as honest packaging and
advertising, product guarantees, and improved safety standards. In this sense it is a
movement or a set of policies aimed at regulating the products, services, methods, and
standards of manufacturers, sellers, and advertisers in the interests of the buyer.
 Traditionally, the sellers or marketers were dominating as consumers had very little choice
of products and services. This resulted in sellers resorting to unethical trading activities and
cheating the customers.
 The attitude of marketers led to exploitation of consumers around the globe, through use of
restrictive and unfair trade practices. Marketers were harming the consumers in many ways,
including charging high prices, deceptive practices, high-pressure selling, unsafe products
and poor services. In order to protect themselves from marketers, and assert their own
rights, consumers started organizing themselves into groups of activists. Understanding the
genuine need to protect the consumers, the govt. also started several actions like
legislations in these lines.

Consumer Protection Act – 1986 – Rights of Consumer

 The Consumer Protection Act, 1986 was enacted for better protection of the interests of
consumers. The provisions of the Act came into force with effect from 15-4-87. Consumer
Protection Act imposes strict liability on a manufacturer, in case of supply of defective goods
by him, and a service provider, in case of deficiency in rendering of its services.
 In order to protect the interest of consumers, govt. of India has passed legislation under the
Consumer Protection Act 1986. Six rights of consumers are recognized –
1. Safety – Right to be protected against the marketing of goods and services that are
hazardous to life and property.
2. Information – Protection against unfair trade practices, and the right to be informed about
the quality, quantity, purity, standard and price.
3. Choice – Right to choose a variety of products and services at competitive prices.
4. Representation – The right to be heard and be assured that the consumer’s interests are
received due considerations at appropriate forums.
5. Redressal – Right to seek redressal against unfair and restrictive trade practices and
exploitation of consumers.
6. Consumer Education – Right to consumer education.

The Act also envisages establishment of Consumer Protection Councils at the central, state and
district levels, whose main objectives are to promote and protect the rights of consumers.
 To provide a simple, speedy and inexpensive redressal of consumer grievances, the Act
envisages a three-tier quasi-judicial machinery at the national, state and district levels. These
are: National Consumer Disputes Redressal Commission known as National Commission,
State Consumer Disputes Redressal Commissions known as State and District Consumer
Disputes Redressal Forum known as District Forum.

Responsibilities of Consumer
 As a consumer, you have the responsibility to educate yourself.
 Before making a major purchase, read Fact Sheets from the Consumer Product Safety
Commission.
 Responsible consumers make comparisons to find the best product or service at the best
price.
 Consumers (and producers) must do their part to cut down on pollution.
 Every consumer should be aware of the limited supplies of resources and adjust their
consumption accordingly.
  Reduce the use of non-biodegradable materials .
 Reuse products when they can
 Recycle materials to reduce waste
 Consumers must follow the instructions given by the manufacturer for the safe use of
products.
 You have the responsibility to report unfair, unsafe, and illegal business practices.
 You can speak out by telling others and writing letters to magazines and newspapers.
 Read consumer information publications and other consumer resources.
 Attend classes or workshops on consumer issues and problems.

Benefits of Consumerism
 Economic growth : Consumerism increases consumption, more consumption requires more
production, more production means more jobs and more income in society, and more
income means more consumption. This is the cycle which if managed properly can bring
growth and prosperity to society. Malpractices like charging high prices, pressure selling,
unfair trade practices can also be stopped by Consumerism and thus leads to economic
growth.
 Competition between companies: As the consumption increases due to consumerism,
competition between the companies also increases to grab more and more no. of
consumers.
 Diversity of choices, people generally have a variety of options when buying products.
 Companies try to produce safe and reliable products - Consumerism" is the concept that
the marketplace itself is responsible for ensuring economic justice and fairness in society.
Consumer protection policies and laws compel manufacturers to make products safe.
 Consumer Education : Consumerism educates the consumers about the basic rights
consumer has got and how can they react if there is any malpractice followed by the sellers.
 Product Research and Information to Consumers : All the information related to product is
being provided by the marketer to the consumers.
 Inculcate Honesty, Responsibility and Responsiveness on to manufacturers and Marketers
: Manufacturers and marketers are bound to follow fair trade practices and provide quality
products to the consumers.
 Move towards Societal concept of Marketing : Manufacturers have got certain
responsibility towards society as well and they are bound to use eco friendly packaging and
perform actions which do not cause any harm to the society.

Thank You