An Overview of Consumer

Behavior

Naveen Kashyap, PhD

Indian Institute of Technology Guwahati
Email: naveen.kashyap@iitg.ernet.in
 Shopper, Buyer, and Consumer Benefits

• People do not buy products, they buy benefits (Practical /

Unusual)
• Shoppers go into the marketplace through various means;
they can be “just looking” or purposeful
• Buyers complete the exchange transaction
• The shopper is often the buyer, but not always
• Consumers actually use or possess that which is “purchased”
 Shopper, Buyer, and Consumer Benefits
• “Influencers” exert various levels of power over the choices
a person makes in certain product categories

• Different types of people seek different benefits

• A watch (Student vs Gift)

• The marketplace is anywhere that a transaction can be

completed
 Benefits and the Total Product Concept
• Tangible benefits are in some sense measurable
• Intangibles are associated with feelings experienced when
owning or using a product or service
• Total product concept is a broader view of goods and services
as a sum of their benefits
• Basic core
• Accessory ring
• Psychological ring
• Time dimensions
 Total Product Concept

• The basic core is the bundle of utilitarian benefits purchased

Examples are laptop design, features, memory, speed,
operating system, installed software, etc.

• The accessory ring includes “added-value” benefits

Examples are store reputation, manufacturer prestige,
location convenience, salesperson’s friendliness, etc.
 Total Product Concept
• The psychological ring includes benefits resulting from the
consumer’s feelings associated with the possession or use of
a product
Examples are a sense of belonging, feeling thrifty, feeling
ahead of the crowd, being a good homemaker

• Perceptions of time affect perceptions of other benefits.

Every purchase either saves time or expands time of the
prospective consumer.
Example eating at fast-food joint saves time as against
eating at restaurant which inflates time.
 Market Segmentation
• Different consumers seek different benefits packages in
different situations

• Consumers usually fall into groups or clusters of individuals

seeking similar benefits

• Segmenting markets means identifying like-minded clusters

behaving in similar ways and making similar decisions in
the marketplace in similar situations
Consumer Benefits and Market Segmentation

• Marketers do not create market segments; they find them

• Firms help marketers find and understand market

segments
Example: Market segments occur in college education
Consumer Benefits and Market Segmentation
• Segment bounding is a means to differentiate among
consumers and among market segments
• Develop a set of descriptors: combinations of
characteristics
• Bound segments to a specific geographic location
• Bound segments in time: relevant and up-to-date data
• Segment viability requires distinctiveness and sufficient
potential to be pursued
• Sufficient size, measurable, clearly differentiated,
reachable
Consumer Benefits and Market Segmentation
• Segmentation strategies used by marketers
• Mass marketing or undifferentiated marketing
• Concentrated marketing, also known as focused or
niche marketing; “segments of one” becoming a reality
• Differentiated marketing

• Countersegmentation reduces the number of market

segments served
 The Consumer Decision-Making Process
• Consumer decision models describe the processes
consumers go through before, during, and after making a
purchase

• Models map antecedents (causes) of a particular behavior

and consequences (results)

• Cause and effect help marketers anticipate and possibly

influence consumer actions
The Engel, Kollat, and Blackwell (EKB) Model
• EKB is a multimediation model
• EKB shows the components of decision making
1.Input
2.Information processing
3.Decision process
4.Decision process variables
5.External influences
• EKB demonstrates the multiple relationships and
interactions among the components
The Engel, Kollat, and Blackwell (EKB) Model
• Potential consumers are continually subjected to input of all
kinds
• Some input is marketer controlled, such as advertising
• Some input comes from friends or personal recollections

• The EKB model identifies five methods of information

processing
1. Exposure 4. Yielding
2. Retention 5. Comprehension
3. Attention
 Consumer Decision Process
1. Problem or need recognition
2. Information search
3. Alternative evaluation
4. Choice
5. Outcome
Two Types of Outcomes Are Possible
1. Positive evaluation leads to satisfaction; negative
evaluation leads to dissatisfaction
2. Dissonance is the feeling of uncertainty that you’ve
made the right choice
• If consumers are satisfied with a purchase, they may
become “loyal”
 Studying Consumer Behavior
The study of consumer behavior is an applied science
which draws on knowledge from disciplines such as
economics, psychology, sociology, & statistics. Methods
employed to study consumer behavior are:
Observation – this approach to study consumer behavior
consists primarily of observing consumer behavior in
different situations. Some common observational techniques
are
a) in-home observation – which places marketers inside
people’s homes to examine exactly how products are
consumed. The observation may be done with personal
interviews and surveys, video cameras or other
technologies that measure actual experience with the
product
b) shadowing – in which a researcher accompanies or
“shadows” consumers through the shopping and
consumption process, asking questions about each
step of the process.
c) physiological observational method – which involves
techniques borrowed from medicine, psychology and
other sciences. These includes cameras for measuring
eye movement, galvanic skin response and MRI.

Interviews and Surveys – surveys are an efficient way

of gathering information from a large sample of
consumers by asking questions and recording
responses. They can be conducted by mail, telephone,
Internet of in person. Some methods are
focus groups – usually consists of eight to twelve people
involves in a discussion led by a moderator skilled in
persuading consumers to discuss thoroughly a topic of
interest to the researcher

longitudinal studies – involve repeated measure of

consumer activities over time to determine changes in
their opinion, buying and consumption behaviors. A
common method of collecting data is through
membership clubs or customer loyalty programs
Experimentation – as a research, methodology attempts
to understand cause and affect relationships by carefully
manipulating independent variables (as number of ads,
packaging design) to determine how these changes
affect dependent variables (as purchase intent or
behavior). Two main types of experimentation are

a) laboratory experimentation – is conducted in a

physical environment (commercial/academic) that
permits maximum control of variables being studied
b) field experiment – which takes place in natural setting
such as home or a store

Consumption research – focuses on how people use

products rather than how they buy them, and can involve
any of the research methods (observation, survey or
experimentation). This approach requires researchers to
get inside people’s homes / places to understand how
lifestyle, values & societal trends affect consumption