MODULE 3

Reference Book – Principles of Marketing (17 th edition- 2018)

Kotler
Armstrong
Agnihotri
 TOPICS TO BE COVERED
✓Meaning of consumer behaviour
✓Factors influencing Consumer behaviour
✓Buying decision process and its stages
 CONSUMER BUYER BEHAVIOUR
The buying behaviour of final consumers-individuals and households
that buy goods and services for personal consumption.

All of these final consumers combine to make up the consumer market

• Ask friends
• Research
• I will check on website and store
• Reviews
• Compare
• Ask an expert
• Store / online
THE MODEL OF BUYER BEHAVIOUR
Consumers make many buying decisions everyday and the buying
decision is the focal for the marketer’s effort

Most companies research what consumer’s buy, why? Where they

buy? When they buy? How they buy? How much they buy? The
answers are not easy as they are stored in the minds of the
consumer
How do customer’s respond to the various marketing efforts?

Starting point is the STIMULUS-RESPONSE MODEL OF BUYER BEHAVIOUR

THE MODEL OF BUYER BEHAVIOUR
Mind of the
consumer

BUYER’S RESPONSES
THE ENVIRONMENT
• BUYING ATTITUDE AND PREFERENCES
BUYER’S BLACK BOX
• PURCHASE BEHAVIOUR: WHAT THE
MARKETING ▪ BUYER’S
OTHER BUYER BUYS, WHEN, WHERE AND
STIMULI
• ECONOMIC
CHARATERICTICS
• PRODUCT HOW MUCH
• TECHNOLOGICAL ▪ BUYER’S DECISION
• PRICE • BRAND ENGAGEMENTS AND
• SOCIAL PROCESS
• PLACE RELATIONSHIPS
• CULTURAL
• PROMOTION

WE CAN MEASURE WHAT THE BUYER BUYS, WHEN, WHERE

AND HOW MUCH BEHAVIOUR. BUT ITS DIFFICULT TO “SEE”
INSIDE THE CONSUMER’S HEAD AND FIGURE WHY (THAT IS
WHY IT IS CALLED THE BLACK BOX)
• The marketing stimuli enter the mind of the customer’s black box and produces certain responses

• So marketers want to know HOW THE STIMULI ARE CHANGED INTO RESPONSES inside the
consumer’s black box

• THE
BUYER’S CHARACTERISTICS
BLACK BOX HAS TWO PARTS BUYER’S DECISION PROCESS

•
Influences how he or she perceives and reacts to From Need recognition, information search,
the stimuli which include variety of cultural, alternate evaluation to the purchase decision and
social, personal and psychological factors. post purchase behaviour
“The PROCESS whereby individuals decide whether what, when, how
and from whom to purchase goods and services”

In this process the consumer deliberates within himself before finally

making a move
PROCESS??
➢ Whether to spend money or not?

➢ yes! Then assess needs and wants – wants are unlimited but resources are limited

➢ The subsequent consumption problems relate to the place from where to buy, quantity to buy, cash or credit
purchases etc.

➢ The entire consumption behaviour consists of both physical as well as mental activities.

➢ The physical activities involve visiting the place, examining the product being sold, selecting the product and
consuming it.

➢ Mental activities involve deliberations within the mind of the consumer, forming of attitudes, absorbing
communication about the product (advertising material) and learning to prefer a particular brand.
IMPORTANCE OF CONSUMER BEHVIOUR??

Explain why studying the behaviour of a consumer is so critical for a

marketer and How does it help?
• Modern marketing concept
• Person’s buying process is influenced by social class, culture, lifestyle
and other factors
• Consumers vary
• Competition
• The company that really understands consumer responses to different
products, features, prices and advertising appeals has a big advantage
over its competitors.
Characteristics affecting consumer behaviour

CULTURAL SOCIAL
FACTORS FACTORS
PERSONAL
➢ Culture ➢ Groups and
FACTORS
➢ Subculture social
➢ Age and life
➢ Social Class networks PSYCHOLOGI
cycle stage
➢ Family CAL FACTORS
➢ Occupation
➢ Roles and ➢ Motivation
➢ Economic
status ➢ Perception
situation
➢ Learning BUYER
➢ Lifestyle
➢ Beliefs and
➢ Personality and
attitudes
self concept
 CULTURAL FACTORS

➢ Culture – the set of basic values, perceptions, wants and behaviours learned by a member of society from family
and other important institutions: EX: Indian Culture
o The aspects of Indian culture are relevant to marketing include the joint family system, customs, food eaten and
festivals celebrated.
o In India the clothing worn and then food consumed is largely affected by the climate, nature and the economic
situation in India.
➢ Sub-Culture: Each culture contains smaller groups or sub-cultures that provide more specific identification. Which
includes nationalities, religion, racial groups, geographic regions
➢ Social Class: not just determined by the income but also education, wealth, occupation and other variables. Social
class shows distinct product and brand preferences in areas such as clothing, jewelry, automobile, leisure , financial
services etc.
 SOCIAL FACTORS

➢ Groups and social networks : many small groups influence consumers behaviour. Membership groups,
reference groups (aspirational groups), word of mouth influence, opinion leaders ,Online social networks,
social media influencers.
➢ Family :Marketers are interested in the roles and the relative influence of the husband, wife and children
on the purchase of a large variety of products.
➢ Roles and status
 PERSONAL FACTORS

➢ Age and life cycle stage: Each stage of the life cycle has its own financial situation and typical product interests.
➢ Occupation : A marketer must try to identify the occupational groups that have an above average interest in his
product and services.
➢ Economic situation: A persons economic circumstances consist of his spendable income. Savings and assets,
borrowing power and attitude toward spending vs saving money
➢ Lifestyle : A person’s lifestyle refers to the person’s pattern of living in the world as expressed in his activities,
interests and opinions
➢ Personality and self concept :By personality we mean the persons distinguishing psychological characteristics such
as self-confidence, sociability, dominance, autonomy, adaptability, aggressiveness. It has been found that personality
types can be classified and strong correlations may exist between personality types and product or brand choice
PSYCHOLOGICAL FACTORS

➢ Motivation : A person has multiple needs at any point of time. A need becomes a motive when a person
is sufficiently interested to seek satisfaction of the need. Among all the different theories of human
motivation Sigmund Freud and Abraham Maslow’s Theories, which are the most popular, carry
different implication for consumer analysis and marketing.
➢ Perception :Two people maybe in the same motivated state of mind but may act differently because they
perceive the same situation differently
➢ Learning: Learning describes the changes in the behaviour arising from experience.
➢ Beliefs and attitudes :People carry certain beliefs about products and services. These beliefs make up
the product and brand images and people act on their beliefs.
Sigmund Freud
• According to Freud’s Theory people are largely unconscious about
the real psychological forces controlling their behaviour.
• A person may not fully understand what is motivating him to buy a
product.
 CUSTOMER BEHAVIOUR (BUYING) ROLES

INITIATOR INFLUENCER DECIDER BUYER USER GATEKEEPER

CONSUMER BEHAVIOR ROLES

• Initiator: Is the individual who ascertains some need. That individuals want is not satisfied and authorizes a
purchase to correct the situation.

• Gatekeeper: Influences the family’s information processing. Gatekeeper has the expertise in obtaining and
evaluating information

• Influencer: Intentionally or otherwise, by word or action, influences the purchase decision, actual purchase
or use of the product or service.

• Decider: The person or persons who actually decides which product or service will be chosen

• Buyer: Any individual who actually makes the final purchase transaction.

• User(s) : Person most directly involved in the use or consumption of the purchased product
BUYING DECISION BEHAVIOUR
 BUYING DECISION BEHAVIOUR
COMPLEX BUYING BEHAVIOUR
▪ Consumer buying behaviour in situations
characterized by High involvement of the
consumer and significant perceived
differences/ lot to learn about among the brands
▪ When purchase is expensive, risky, infrequent and
self expressive
▪ Marketers need to understand the information
gathering and evaluation behaviour of the consumers
▪ Marketers need to help them learn about the product
class and features
▪ Lot of information should be made available through
videos, printed ads, promotional videos etc
DISSONANCE REDUCING BUYING
BEHAVIOUR
• Consumer buying behaviour in situations
characterized by high involvement of the
consumer but few perceived differences or
see little differences among the brands
• Even this case the purchase may be
infrequent, expensive and risky but they
see little differences among the brands and
not many choice of brands.
• Post purchase dissonance should be avoided
 VARIETY SEEKING
HABITUAL BUYING
BEHAVIOUR
BEHAVIOUR

• Consumer buying behaviour

• Consumer buying behaviour in situations characterized by
in situations characterized by
low involvement of the
low involvement of the
consumer but significant
consumer and few
perceived brand
significant perceived
differences among the
differences among the
brands
brands • Low cost and frequently
• Low cost and frequently purchased products
purchased products
 BUYER’S DECISION PROCESS
The buying process starts long before the actual purchase and continues long after. Marketers need to focus on
the entire buying process than on the purchase decision only
Process starts long
before the purchase
decision

NEED INFORMATION EVALUATION OF PURCHASE POST PURCHASE

RECOGNITION SEARCH ALTERNATIVES DECISION BEHAVIOUR
 ▪ Buyer recognizes the problem or a need
▪ Internal or external stimuli
▪ Marketer at this stage – research about consumers needs
NEED RECOGNITION and choices how, when, what??
 ▪ Stage in which consumer is driven and motivated to
search for more information
INFORMATION ▪ Consumers obtain information from several sources like
SEARCH personal sources, public sources, commercial sources,
experiential sources, (which marketer needs to
understand)
 ▪ Stage at which consumer uses the information to evaluate
alternate brands in the choice set (TOTAL SET –
EVALUATION OF AWARENESS SET – CHOICE SET)
ALTERNATIVES ▪ How the consumers evaluate again depends on several
factors ( product attributes, careful calculations, logical
thinking, rely on intuitions, other’s advice)
 ▪ Final decision about the purchase
▪ Preferences and purchase intentions do not always result
in actual purchase. Final purchase decision may change
PURCHASE DECISION
 ▪ Stage at which customers take further action after the
purchase based on their satisfaction or dissatisfaction
POST PURCHASE ▪ This depends on the customer’s expectation and
BEHAVIOUR perceived performance
 Post purchase, customer
satisfaction is the key to build
profitable relationships. Most
marketers go beyond meeting
customer expectations rather
they aims to delight the
customers
Source and references:
• Principles of Marketing - Philip Kotler, Gary Armstrong and
Prafulla Agnihotri
• Google Images