CONSUMER BEHAVIOUR

The term consumer behaviour, individual buyer behaviour, end user behaviour and consumer
buying behaviour all stands for the same. Consumer behaviour is the study of how individuals,
groups and Organisation select buy, use and dispose of goods and services, ideas or experiences
to satisfy their needs and wants.

Consumer behaviour may be defined as the decision process and physical activity individuals
engage in when evaluating, acquiring, using or disposing of goods and services.

According to Belch and Belch "consumer behaviour is the process and activities people engage
in when searching for, selecting,purchasing, using, evaluating and disposing of products and
services so as to satisfy their needs and desires".

According to Engel, Blackwell, and Mansard, 

‘Consumer behaviour is the actions and decision processes of people who purchase goods and
services for personal consumption’.

According to Louden and Bitta, 

‘Consumer behaviour is the decision process and physical activity, which individuals engage in
when evaluating, acquiring, using or disposing of goods and services’.

Nature of Consumer Behaviour:

Systematic process : Consumer behaviour is a systematic process relating to buying decisions of

the customers. The buying process consists of the following steps : 

 Need identification to buy the product 

 Information search relating to the product 
 Listining and evaluating the alternative 
 Purchase decision 
 Post purchase evaluation by the marketer

Influenced by various factors : Consumer behaviour is influenced by a number of factors the

factors that influence consumers include marketing, personal, psychological, situational, social
and cultural etc. 
Different for different customers   : All consumers do not behave in the same manner. Different
consumers behave differently. The different in consumer behaviour is due to individual factors
such as nature of the consumer's lifestyle, culture etc. 

Different for different products  : Consumer behaviour is different for different products there are
some consumers who may buy more quantity of certain items and very low quantity of some
other items. 

Vary across regions  : The consumer behaviour vary across States, regions and countries. For
instance, the behaviour of urban consumers is different from that of rural consumers.  normally
rural consumers are conservative (traditional) in their buying behaviour.
…

Vital for marketers  : Marketers need to have a good knowledge of consumer behaviour they
need to study the various factors that influence consumer behaviour of the target customers. The
knowledge of consumer behaviour enables marketers to take appropriate marketing decisions. 

Reflect status  : Consumer buying behaviour is not only influenced by status of a consumer coma
but it also reflect it. Those consumers who owned luxury cars, watches and other items are
considered by others as persons of higher status. 

Result in spread effect  : Consumer behaviour as a spread effect. The buying behaviour of one
person may influence the buying behaviour of another person. For instance, a customer may
always prefer to buy premium brands of clothing, watches and other items etc. This may
influence some of his friends, neighbours and colleagues. This is one of the reasons why
marketers use celebrities like Shahrukh Khan, sachin to endorse their brands.

Undergoes a change : The consumer behaviour undergoes a change over a period of time
depending upon changes in age , education and income level etc, for example, kids may prefer
colourful dresses but as they grow up as teenagers and young adults, they may prefer trendy
clothes. 

Information search : Search for information is a common consumer behaviour. Consumers

cannot purchase goods and services if they are unaware that a good or service exists. When a
consumer decides to buy a certain item, his decision must be based on the information he has
gethered about what products our services are available to fulfill his needs. There might be a
product available that would be better suited to the consumers needs, but if he is an aware of
product, he will not buy it. 

Brand loyalty : Brand loyalty is another characteristic of consumer behaviour. Brand loyalty is
the tendency of a consumer to buy product products or services from a certain company that one
likes or equates with having high quality goods and services. For example, if Naina's first car
was a Honda as a teenager and the car lasted 200,000 miles, she might have a tendency to buy
hondas again in the future due to her previous positive experience. This brand loyalty may be so
strong that she forgoes the information search all together when considering for next vehicle.

Scope of Consumer Behaviour:

1) Consumer behaviour and marketing management : Effective business managers realise the
importance of marketing to the success of their firm. A sound understanding of consumer
behaviour is essential to the long run success of any marketing program. In fact, it is seen as a
comerstone of the Marketing concept, an important orientation of philosophy of many marketing
managers. The essence of the Marketing concept is captured in three interrelated  orientations
consumers needs and wants, company integrated strategy. 

2) Consumer behaviour and non profit and social marketing : In today's world even the non-
profit organisations like government agencies, religious sects, universities and charitable
institutions have to market their services for ideas to the "target group of consumers or
institution." At other times these groups are required to appeal to the general public for support
of certain causes or ideas. Also they make their contribution towards eradication of the problems
of the society. Thus a clear understanding of the consumer behaviour and decision making
process will assist these efforts.

3) Consumer behaviour and government decision making : In recent years the relevance of
consumer behaviour principles to government decision making. Two major areas of activities
have been affected: 
i) Government services: It is increasingly and that government provision of public services can
benefit significantly from an understanding of the consumers, or users, of these services.

ii) consumer protection: Many Agencies at all levels of government are involved with regulating
business practices for the purpose of protecting consumers welfare.

4) Consumer behaviour and demarketing: It has become increasingly clear that consumers are
entering an era of scarcity in terms of some natural gas and water. These scarcities have led to
promotions stressing conservation rather than consumption. In other circumstances, consumers
have been encouraged to decrease or stop their use of particular goods believed to have harmful
effects. Programs designed to reduce drug abuse, gambling, and similar types of conception
examples. These actions have been undertaken by government agencies non profit organisations,
and other private groups. The term "demarketing" refers to all such efforts to encourage
consumers to reduce their consumption of a particular product or services.

5) Consumer behaviour and consumer education: Consumer also stands to benefit directly from
orderly investigations of their own behaviour. This can occur on an individual basis or as part of
more formal educational programs. For example, when consumers learn that a large proportion
of the billions spend annually on grocery products is used for impulse purchases and not spend
according to pre planned shopping list, consumers may be more willing to plan effort to save
money. In general, as marketers that can influence consumers' purchases, consumers have the
opportunity to understand better how they affect their own behaviour.

Importance of consumer behaviour:

1) production policies: The study of consumer behaviour effects production policies of

enterprise. Consumer behaviour discovers the habits, tastes and preferences of consumers and
such discovery enables and enterprise to plan and develop its products according to these
specifications. It is necessary for an enterprise to be in continuous touch with the changes in
consumer behaviour so that necessary changes in products may be made.

2) Price policies: The buyer behaviour is equally important in having price policies. The buyers
of some products purchase only because particular articles are cheaper than the competitive
articles available in the market.

3) Decision regarding channels of distribution: The goods, which are sold and solely on the basis
of low price mast and economical distribution channels. In case of those articles, which week
T.V. sets, refrigerators etc. Must have different channels of distribution. Thus, decisions
regarding channels of distribution are taken on the basis of consumer behaviour.

4) Decision regarding sales promotion: Study of consumer behaviour is also vital in making
decisions regarding sales promotion. It enables the producer to know what motive prompt
consumer to make purchase and the same are utilised in promotional campaigns to awaken desire
to purchase.

5) Exploiting marketing opportunities: Study of consumer behaviour helps the marketers to

understand the consumers needs, aspirations, expectations, problems etc. This knowledge will be
useful to the marketers in exploiting marketing opportunities and meeting the challenges of the
market.

6) Consumer do not always act or react predictably: The consumers of the past used to react to
price levels as if price and quality had positive relation. Today, week value for money, lesser
price but with superior features. The consumers response indicates that the shift had occurred.

7) Highly diversified consumer preferences: This shift has occurred due to availability of more
choice now. Thus study of consumer behaviour is important to understand the changes.
8) Rapid introduction of new products: Rapid introduction of new product with technological
advancement has made the job of studying consumer behaviour more imperative. For example,
the information Technologies are changing very fast in personal computer industry.

9) Implementing the "Marketing concept": This calls for studying the consumer behaviour, all
customers need have to be given priority. Thus identification of target market before production
becomes essential to deliver the desired customer satisfaction and delight.

Applications of consumer behaviour:

1) Analysing market opportunity: Consumer behaviour study help in identifying the unfulfilled
needs and wants of consumers. This requires examining the friends and conditions operating in
the Marketplace, consumers lifestyle, income levels and energy influences. This may reveal
unsatisfied needs and wants. Mosquito repellents have been marketed in response to a genuine
and unfulfilled consumer need.

2) Selecting target market: Review of market opportunities often helps in identifying district
consumer segments with very distinct and unique wants and needs. Identifying these groups,
behave and how they make purchase decisions enable the marketer to design and market
products or services particularly suited to their wants and needs. For example, please sleep
revealed that many existing and potential shampoo users did not want to buy shampoo fax price
at rate 60 for more and would rather prefer a low price package containing enough quantity for
one or two washers. This finding LED companies to introduce the shampoos sachet, which
become a good seller.

3) Marketing-mix decisions: Once unsatisfied needs and wants are identified, the marketer has to
determine the right mix of product, price, distribution and promotion. Where too, consumer
behaviour study is very helpful in finding answers too many preplexing questions. The factors of
marketing mix decisions are:
i) product ii) price iii) promotion iv) distribution

4) Use in social and non profits marketing: Consumer behaviour studies are useful to design
marketing strategies by social, governmental and not for profit organisations to make their
programmes more effective such as family planning, awareness about AIDS.
Factors Influencing Consumer Behaviour

The Various factors influencing Consumer Behaviour can be classified into 4 categories:

Economic Factors

Personal Factors

Cultural and Social Factors

Psychological Factors
Economic Factors influencing consumer behaviour:

Personal Income –Total Income of the consumer

Discretionary Income –Income available to a consumer after deducting taxes and basic cost of
living.

Disposable Income –Income available with consumer to spend according to his wishes

Family Income –Income of the family. Lower income families have less demand than
prosperous families.

Consumer Expectations Regarding Future Income

Availability of Liquid Assets with the consumer

Consumer Credit –Availability of consumer credit, Credit policies

Level of Standard of Living -A consumer demands more and spends more with increase in his
income or expectations of future profits or availability of liquid cash or availability of credit but
saves and demands less in its absence. The nature of consumption and buying pattern of a
consumer is also affected by the income of the family and the level of standard of living.

Personal Factors influencing Consumer Behaviour:

Age –People of different ages have different needs.

Occupation –Professionals, businessman, salaried-workers have different demands.

Life Cycle Stage –Newly born, Teenager, Bachelor, Married, Parent, Grand Parent

Lifestyle–Achievers, Strugglers, Strivers, Makers

Personality –Aggressive, Shy, Introvert, Extrovert, Conservative, Experimental

Self-Concept–One`s perceptions towards themselves.

Cultural Factors affecting Consumer Behaviour

Culture–Culture is basically the way of living and thinking pattern that is followed from
generation to generation in a society. It includes knowledge, belief, traditions, morals, values,
customs and other such habits that are acquired by people as members of a society.Eg. Indian
culture is entirely different from cultures of other Asian, Arabic and Western countries.

Sub-culture–Sub-culture is a segment of culture which helps a marketer to know another

person's culture either psychologically, socially or through mass identification. Sub-culture
consists of a group of people within a culture who exhibit similar buying behaviour and have
similar believes.E.g. Within India, buying behaviour of muslims of the north India can be
differentiated form the muslims of the south India

Social class–Social class segments the market on the basis income criteria and standard of
living. It refers to divisions of members of a society on the basis of education, occupation,
income etc. Usually people belonging to the same social class have similar preferences in case of
choice of residence, entertainment, luxary products etc.E.g. Buying behaviour of the upperclass
can be easily differentiated from the middle and lower class.

Social Factors influencing Consumer Behaviour

Social Group –A group is any collection of individuals with similar interests, opinions and
activities. An individual draws cues regardingconsumption and disposal of products from various
social groups he belongs to.

The various social groups an individual forms a part of are:

Reference Group–It refers to all those people which directly affect the purchase pattern and
decision of a consumer as they serve as a point of reference or comparison for the consumer
while making a purchase decision.

Contractual Group–It includes friends, family, peers who have a direct and daily face to face
interaction with an individual. They are the most important source of influence on consumer
behaviour.

Avoidance Group–A group of people that have a negative impact on a consumer. A consumer
disassociates himself from such a group and avoid using products and services used,
recommended or promoted by the avoidance group.

Aspirational Group–It includes film stars, TV celebrities, Sport stars etc. whom a consumer
aspires to be. A consumer wants to associate himself with people he aspires and uses products
and services used, recommended and promoted by them.

Opinion Leaders –It refers to a key individual in a group which influences the behaviour of
members of the group by providing them relevant information about new trends and products in
the market.

Role and Status –Every person plays many roles in the society i.e. employee to his boss, parent
to his children, referrer for young ones, advisor to peers etc. and their buying pattern depends
upon the role they play in the society. People also select and buy products according to their
status in the society.Social status of a person refers to his/her position in the society depending
upon his income, occupation, education etc.E.g. CEO of a company would prefer to buy branded
products from big stores, while a worker in the same company may prefer value for money
products from nearby stores.
Psychological Factors affecting Consumer Behaviour:

Customers behave differently towards the same marketing mix (product) due to their respective
psychological makeup. The psychological factors that affect consumer behaviour are:

Motivation –A motive is an internal force that drives a person to do something i.e. fulfill a
need, achieve a goal, solve a problem. Different motives of a consumer can be understood
through Maslow Hierarchy of needs. All consumers react differently towards a product
depending upon their position in the hierarchy. i.e. an individual will first satisfy his basic needs
and then move upward in the hierarchy with satisfaction of each want.

Involvement –It refers to the amount of interest or importance a consumers shows towards a
product. A consumer may have high or low involvement in a product.For e.g.a cricketer will give
very high importance and will be highly involved while purchasing a cricket bat while he may
have very low involvement and interest when purchasing luggage bags.

Perception–It is a process of selecting, organizing, and interpreting information from our

internal and external environment to form a meaningful picture. All consumers perceive the same
product differently according to their own perceptions.For e.g. Wrestling is perceived differently
by different people, some perceive it a meaning less fighting while some consider it a sport.

Learning –It is a process which brings a permanent change in the behaviour of a person.
People generally learn through past experiences and develop a certain behaviour towards a
product or service.

Personality –It refers to the total of all physical, mental and moral characteristics of a person.
Customers buy products that suit their personality, for example some people prefer wearing
formal clothes some like to wear casual clothes depending upon what suits their personality.

Lifestyle–A person`s lifestyle is made up of his activities, opinions and interests. Lifestyle of a
person also depends upon his position in the life cycle stage i.e. Teenager, Bachelor, Married
etc.E.g. while teenagers or children are care free and majorly spend on recreation activities and
Parents are more money conscious and majorly spend on consumer durables.

Attitude –Attitude is a person`s predisposition to act favourably or unfavourably towards a

product, service, event, people etc. It is the way a person thinks or feels about an object.
Consumers develop a positive or negetive attitude towards a product or service due to a
marketing stimuli, situational variables, experience or advertising and then decide upon an
intended action for that product or service.For E.g. entrepreneurs attitude towards risk, some are
risk takers some like to play it safe.
 Application of Consumer behaviour knowledge in Marketing

Marketing is the entire process of researching customer needs and preferences, developing
product and service solutions to match, and promoting the benefits to targeted customers.
Understanding basic buyer behavior and the steps consumers follow in making purchase
decisions helps significantly in developing effective marketing plans.

There are four main applications of consumer behavior:

The most obvious is for marketing strategy i.e., for making better marketing campaigns. For
example, by understanding that consumers are more receptive to food advertising when they are
hungry, we learn to schedule snack advertisements late in the afternoon. By understanding that
new products are usually initially adopted by a few consumers and only spread later, and then
only gradually, to the rest of the population, we learn that:-

1. Companies that introduce new products must be well financed so that they can stay afloat
until their products become a commercial success and It is important to please initial customers,
since they will in turn influence many subsequent customers brand choices.
2. A second application is public policy. In the 1980s, Accutane, a near miracle cure for
acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if taken by
pregnant women. Although physicians were instructed to warn their female patients of this, a
number still became pregnant while taking the drug. To get consumers’ attention, the Federal
Drug Administration (FDA) took the step of requiring that very graphic pictures of deformed
babies be shown on the medicine containers.
3. Social marketing involves getting ideas across to consumers rather than selling
something. Marty Fishbein, a marketing professor, went on sabbatical to work for the Centers for
Disease Control trying to reduce the incidence of transmission of diseases through illegal drug
use. The best solution, obviously, would be if we could get illegal drug users to stop. This,
however, was deemed to be infeasible. It was also determined that the practice of sharing needles
was too ingrained in the drug culture to be stopped. As a result, using knowledge of consumer
attitudes, Dr. Fishbein created a campaign that encouraged the cleaning of needles in bleach
before sharing them, a goal that was believed to be more realistic.
4. As a final benefit, studying consumer behavior should make us better consumers. Common
sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should
pay less per ounce than if you bought two 32 ounce bottles. In practice, however, you often pay a size
premium by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you
to the need to check the unit cost labels to determine if you are really getting a bargain.

Customer vs. Consumer – Relationship & Difference

The words “customer” and “consumers” are often interchangeably used and are easily confused
with one another. It is high time that common folk and businesses alike learn the meaning of
“customer” and “consumer”.
So when do we use “customer” and “consumer”, and for whom?
Definition Of Customer

A customer is the individual/business/organization which buys the offering from the seller via a

financial transaction or monetary exchange.
In simple terms –  Customer is the buyer of the offering.
Example: A person buying a gift for someone from a gift shop – the person is a customer of the
gift shop.
In general, businesses tend to focus on getting more customers as they help them grow and gain
more profits. There are different ways of classifying customers based on the different segments
of businesses. But for the sake of simplicity, we can classify them into two categories:
1. End-Customer – They are the people who buy the product offered for their own use, in
turn becoming the consumer of the specified product.
2. Reseller – They are the intermediary who buys the goods for selling it to others and
hence just acting as a customer and not as a consumer of the purchased product.
Role Of Customer
Customers help drive businesses and are their main focus – it is by selling to the customers that
they are able to sustain themselves and run their operations. Without customers, there would be
no point of businesses staying open.
Customers help in improving the quality of the products and services offered by companies and
businesses. This is achieved by surveying the current customers – generally termed as Customer
Relationship Management (CRM) – in order to measure and improve upon the satisfaction and
expectations of the customers.

Definition Of Consumer

A consumer is an individual who is the end-user of the product/service offered by a business.

In simple terms – Consumer is the end-user who consumes the offering.
Example: Take a kid who recently got candy from his dad. Even though his dad was the
customer who bought the candy, this child is the consumer who ends up consuming the product.
Role Of Consumer
While a customer may or may not consume the purchased product, service or good, a consumer
on the other hand actually consumes/uses the product. This makes consumers great for
businesses to judge the actual usefulness and the genuineness of their products.
Consumer behaviour is a great tool in identifying the product that is currently in demand and the
ones that have gone obsolete. They are used by businesses to target their ideal audience easily, in
turn helping them have the maximum impact on the company’s sales and growth.
This brings us to the fact that consumers can also be the customers – but not always.

Relationship Between Customer And Consumer

Customer and consumer can be used interchangeably – quite simply because a customer and
consumer can be the same person. Buying groceries for oneself is a great example.
A person buying groceries from the supermarket for himself becomes the customer of the
supermarket – they are paying for the groceries provided by the supermarket. Upon consuming
the groceries, the customer also becomes the consumer.
But this is just one case where an individual can be both, the customer as well as the consumer.
But they differ – hence why there are two terms, customer and consumer.

Difference Between Consumer And Customer

COMPARISION CUSTOMER CONSUMER

The buyer of goods or services is The user of goods or services is known
MEANING
known as the Customer. as a Consumer.
PURPOSE Resale or Consumption Consumption only; No resell
Not necessary; Price may or may not be
PURCHASE Yes; Price is paid by the customer
paid by the consumer
TYPE Individual or Organization Individual or group of people
It is quite clear that customers and consumers are similar to one another. But they vary in slight
context and that’s is where people generally miss out on and use them interchangeably.
Basically, a customer is the purchaser of products/goods/ services while a consumer is a person
who is the user of these products/goods/services. The customer doesn’t really need to use the
product to be called as such – the act of buying makes him a customer.
A customer may have bought the product for their own needs or, for the necessity of
consumption or, for adding value to themselves or others. A customer could have also bought the
product with the intention of reselling it to others. Meanwhile, a consumer is the one who bought
the product for the purpose of consumption and personal use only.
Customer pays for the purchase of the product or service. They also may make back the money
spent by reselling or from another party – in case he had bought it for another person. A
consumer, on the other hand, does not necessarily pay for the product. Take the example of gifts
given to children that are purchased by parents – in this case, the children are the consumers and
parents are the customers of the gift shop.
Finally, a customer may be an individual or an organization or a business – buyers of products. A
consumer can be an individual or a group of people or a family – users of products they may or
may not have purchased.

Consumer Decision Making Process

Consumer Decision making is a process through which the nmmmmmcustomer selects the most
appropriate product out the several alternatives.The Consumerdecision making process consists
of a series of steps that a buyer goes through in order to solve a problem or satisfy a need. They
are as follows:

(1) Need/Problem Recognition–A purchase process starts with a need, a problem or a motive
within a consumer`s mind. Any internal or external stimulus may drive a customer to believe that
he lacks something and motivates him to look for something that will satisfy his need or solve
his problem.

(2) Information Search –When a need/problem receives heightened attention from a buyer, he
become more receptive about information that may solve his problem and starts gathering data
about products/services that will satisfy this need. He uses his personal sources (friends, family,
peers etc.) and commercial sources (radio, T.V., newspapers, internet etc.) to look for relevant
information.

(3) Evaluation of Alternatives –After collecting information from various sources, the customer
evaluates the benefits and disadvantages of various product alternatives and develops a set of
choices regarding the product attributes, brand, store etc. that suit his/her needs, taste &
preference, personality, lifestyle etc.
(4) Selection and Trial –After keeping a set of choices in mind the customer makes the first
product trial. He may buy different products in small quantities (1 kg, 1 packet, 1 bottle) or
actually use products individually for some time (tasting food, inspecting phones, taking a test
drive) to form an opinion and develop an attitude towards the product.

(5) Purchase Decision –When the customer believes that a product or service offers the best
solution to his need or problem, he makes the actual purchase. This includes making a product
choice, choosing a brand, a dealer and deciding the amount and time of purchase.

(6) Post Purchase Dissonance/Behaviour –A person seeks reassurance after making a purchase.
A purchase generally has the following three outcomes:

Actual Performance is equal toexpected performance –Customer`s behaviour is natural as the

product performed according to his expectations. This leads to repeat purchases.

Actual Performance is less than expected performance –The customer is dissatisfied as the
product did not meet his expectations and hence he rejects the product.

Actual Performance is more than expected performance –This leads to customer

delight/satisfaction as the product performance is better than his expectations. This leads to
customer loyalty.

A simplified framework for studying consumer behavior gives in detail the shaping of consumer
behavior, which leads a consumer to react in certain ways and he makes a decision, keeping the
situations in mind. The process of decision-making varies with the value of the product, the
involvement of the buyer and the risk that is involved in deciding the product/service.