Unit – 6

Consumer Behaviour
Meaning:
Consumer behaviour is the study of how individual customers, groups or organizations
select, buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers
to the actions of the consumers in the marketplace and the underlying motives for those actions.
Definition:
According to Blackwell, ‘consumer behaviour is the actions and decision processes of
people who purchase goods and services for personal consumption’.
Nature/Characteristics of Consumer Behaviour:
1. Influenced by various factor:
The various factors that influence the consumer behaviour are as follows:
a. Marketing factors such as product design, price, promotion, packaging, positioning and dis-
tribution.
b. Personal factors such as age, gender, education and income level.
c. Psychological factors such as buying motives, perception of the product and attitudes towards
the product.
d. Situational factors such as physical surroundings at the time of purchase, social surroundings
and time factor.
e. Social factors such as social status, reference groups and family.
f. Cultural factors, such as religion, social class—caste and sub-castes.
2. Undergoes a constant change:
Consumer behaviour is not static. It undergoes a change over a period of time depending
on the nature of products. For example, kids prefer colorful and fancy footwear, but as they grow
up as teenagers and young adults, they prefer trendy footwear, and as middle-aged and senior
citizens they prefer more sober footwear. The change in buying behaviour may take place due to
several other factors such as increase in income level, education level and marketing factors.
3. Varies from consumer to consumer:
All consumers do not behave in the same manner. Different consumers behave differently.
The differences in consumer behaviour are due to individual factors such as the nature of the
consumers, lifestyle and culture. For example, some consumers are technoholics. They go on a
shopping and spend beyond their means.
4. Leads to purchase decision:
A positive consumer behaviour leads to a purchase decision. A consumer may take the
decision of buying a product on the basis of different buying motives. The purchase decision leads
to higher demand, and the sales of the marketers increase. Therefore, marketers need to influence
consumer behaviour to increase their purchases.
5. Varies from product to product:
Consumer behaviour is different for different products. There are some consumers who
may buy more quantity of certain items and very low or no quantity of other items. For example,
teenagers may spend heavily on products such as cell phones and branded wears for snob appeal,
but may not spend on general and academic reading. A middle- aged person may spend less on
clothing, but may invest money in savings, insurance schemes, pension schemes, and so on.
6. Improves standard of living:
The buying behaviour of the consumers may lead to higher standard of living. The more a
person buys the goods and services, the higher is the standard of living. But if a person spends less
on goods and services, despite having a good income, they deprives themselves of higher standard
of living.
Significance of Consumer Behaviour:
1. Realistic Implementation of the Marketing Concept:
The modern marketing concept is consumer-oriented. To give a realistic implementation
to this concept, a study of consumer behaviour is imperative. More specifically, a study of
consumer behaviour is a must for developing an ideal marketing-mix; which is the cornerstone of
the concept of marketing.
It is, in fact, very true to state that unless the marketer knows what consumers buy and why; it
is not possible to design and implement a successful scheme of marketing-mix to, beat the
completive elements.
2. Planning Product Differentiation and Market Segmentation:
For planning product differentiation strategies (i.e. making the product so differentiated
and unique that consumer may be tempted to buy only that product due to its unique features); a
study of consumer behaviour is very significant or necessary. Again, for designing schemes of
market segmentation (a process of dividing a potential market into distinct sub-markets of
consumers with common needs and characteristics), a study of consumer behaviour is very
necessary.
3. Selection of Distribution Channels:
A study of consumer behaviour not only includes what consumers buy; but also the source
from where they buy’. For example, men of status in society may never buy things from ordinary
shops and ordinary markets. They may prefer to buy from prestigious stores and markets; even
though they may have to pay a higher price and so on for various categories of consumers. Thus a
study of consumer behaviour guides the marketer to select suitable channels of distribution, to
provide maximum convenience and satisfaction to different groups of consumers.
4. Designing Promotional Techniques:
Promotional techniques include advertising message and media, personal selling
approaches and special sales promotional devices. Designing promotional techniques is much
facilitated by a study of consumer behaviour; which may throw light on the psychology of people
as to the factors which affect their buying decisions. Those factors which affect consumers’ buying
behaviour may be suitably incorporated into the promotional techniques of the organisation.
5. Trade-Off between Price and Quality:
A study of consumer behaviour is likely to reveal whether target consumers of the
enterprise emphasize more on the price of the product or its quality. On this basis, the marketer
can device suitable pricing strategies and programmes aimed at upgrading the quality of
organisation’s products to suit the needs, habits and behaviour of consumers.
Factors Affecting Consumer Behaviour:
1. Personal Factors:
These includes factors unique to a particular person. Numerous personal factors influence
purchase decisions:
a. Demographics:
Individual characteristics such as age, sex, race, ethnicity, income, occupation and family
life cycle are called demographics. These have a bearing on who is involved in family decision
making. Demographic factors also influence the extent to which a person uses products in a
specific category. For example, teenagers purchase more fast food products whereas elderly
consumers are more concerned with the levels of fat, cholesterol and sodium in their diets.
b. Situation:
Situational factors are influences resulting from circumstances, time and location that
affect the consumer behaviour. For example, buying a care tyre after noticing a badly worn-out
tyre is difference experience than buying a tyre after a blowout on the highway spoils your
vacation. Situation factors can shorten, lengthen or terminate the consumer buying decision
process.
2. Social Factors:
The factors that other people exert on buying behaviour are called social factors. These
factors are as follows:
a. Roles and Family:
Role means the actions and activities that a person is supposed to perform. A person
occupies several positions and, therefore, has many roles. For example, a man may perform the
role of son, husband, father, employer or employee. An individual role influence both general
behaviour and buying behaviour.
Family influences may have a very direct impact on buying behaviour. Parents teach
children how to cope with a variety of problems including those dealing with purchase decisions.
b. Reference Group:
A reference group is any group that exercise a positive or negative influence on a person’s
attitudes, values and behaviour.
c. Social Class:
A social class means an open group of individuals with similar social rank. Quite often
people in a society are classified into upper, middle and lower classes on the basis of their income
and occupation. Consumers belonging to a particular social class tend to have a common
behavioral patterns. They may have similar attitudes and values.
d. Culture:
Culture is a powerful and dominant determinant of personal needs and wants. Culture can
be broadly defined as: The way of living, way of doing, and way of worshiping. Culture determines
the total patter of life. Culture has a tremendous effect on needs and preference. People react
according to the culture to which they belong.
3. Psychological Factors:
Buying behaviour is influenced by several psychological factors. The dominants among
them include motivation, perception, learning, and beliefs and attitudes. It is difficult to measure
the impact of psychological factors as they are internal, but are much powerful to control persons’
buying choice.
a. Perception:
Person’s motivation to act depends on his perception of situation. It is one of the strongest
factors affecting behaviour. The stimuli – product, advertising appeal, incentives, or anything –
are perceived differently by different people due to difference in perception. Marketer should know
how people perceive marketing offers.
b. Motives:
It means an internal force that orients a person’s activities towards needs and satisfaction.
A set of motives affects a buyer’s actions.
c. Attitude:
An attitude is a person’s enduring favourable or unfavorable evaluations, emotional
feelings, and action tendencies toward some object or idea. These emotional feelings are usually
evaluative in nature. People hold attitudes toward almost everything, such as religion, politics,
clothes, music, food, product, company, and so on.
d. Personality:
It refers to a set of internal traits and distinct behavioural tendencies that result in consistent
patterns of behaviour. An individual’s personality is the outcome of heredity and personal
experiences. It makes individual unique.
Consumer Buying Decision Process:
1. Problem Recognition:
The consumer buying process starts off with the customer having a problem that can be
solved by a product or service. This manifests itself in a number of ways. In some cases, the
shopper starts off feeling the symptoms of an issue. For example, an office worker might find their
computer is slowing down, but they’re not sure of the exact problem or how to solve it.
2. Information Search:
It might sounds simple, but once the consumer recognizes they have a problem (or
symptom of it), they proceed to research to solve the issue. So, the office worker who has a slow
computer might start looking for software improvements to speed things up. And the driver who’s
overpaying for insurance, they’ll start searching for a way to lower their payments.
3. Evaluation of Alternatives:
After doing their research, consumers typically make a shortlist of brands or products for
their needs. At this stage, shoppers look at specific solutions to their problems. For instance,
someone who’s dealing with a slow computer would be deciding whether they should hire an IT
expert, purchase software that or buy a new computer altogether.
4. Purchase:
All your efforts led customers to choose your brand at the purchase phase of the buying
journey. This is the stage when they’re ready to get the credit card and buy your product. Strive to
make the process as quick and painless as possible. Amazon is a master at this with its one-click
checkout. This lets people complete their purchase with a tap of a button.
5. Post Purchase Behaviour:
Finally, we have the post-purchase phase. At this point, you’ve successfully converted
lookers into buyers. Now it’s time to gather feedback. You also want to ensure shoppers remain
customers for as long as possible. It’s all about retention if you truly want to increase sales.
Consumer Behaviour Models:
1. Economic Model:
Under economics, it is assumed that man is a rational human being, who will evaluate all
the alternatives in terms of cost and value received and select that product/service which gives
him/her maximum satisfaction.
Economic model is based on certain predictions of buying behavior:
a. Price effect:
Lesser the price of the product, more will be the quantity purchased.
b. Substitution effect:
Lesser the price of the substitute product, lesser will be the quantity of the original product
bought.
c. Income effect:
More the purchasing power, more will be the quantity purchased.
2. The Sociological Model:
 According to this model the individual buyer is a part of the institution called society. Since
he is living in a society, he gets influenced by it and in turn also influences it in its path of
development.
 He is playing many roles as a part of various formal and informal associations or
organisations such as a family member, as an employee of a firm, as a member of a
professional forum.
 Such interactions leave some impressions on him and may play a role in influencing his
buying behaviour.
 Closed groups comprising of family, friends and close colleagues can exercise a strong
influence on the lifestyle and the buying behaviour of an individual member.
 The group generally has an informal opinion leader, whose views are respected by the
group. This leader is able to influence the individual member’s lifestyle and buying
decisions.
 So an individual member will adopt the role suitable to confirm to the style and behavioural
pattern of the social class to which he/she belongs.