4.

Consumer Behaviour

Prof. (Dr.) D K SAKORE

B.Tech, PGDM (IIMA), NET, Ph.D

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 Definition : Consumer Behaviour

• Study of how individuals, groups and organizations

• select, buy, use and dispose of
• goods and services,
• to satisfy their needs and wants.

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 Buying Roles

 Different roles are played by various people

which influence the consumer decision making
during the Buying Process

 Roles depend on the type of product or service

to be purchased

What are these ROLES ?

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Different Buying Roles
1) Initiator – the person who first suggests or
thinks of the idea of buying a particular
product / service

2) Influencer - a person whose views or

advice influences the buying decision
(knowledge / experience)

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 Buying Roles
3) Decider –the individual with the power /
financial capacity to make the ultimate
choice regarding which product to buy

4) Buyer – person who actually makes the

purchase transaction

5) User – who actually uses the product or

service
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Buying Decision Process

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 1. Problem/Need Recognition
• Consumer recognizes a problem or need

• Can be triggered by an internal (physiological) or

external stimuli (psychological)

• Trigger becomes powerful, consumer goes to next

stage

 Identify the circumstances that trigger a need

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1. Problem/Need Recognition – When ?
i) Current product is not satisfying the need

ii) Consumer is running out of a product

iii) Absence of desired product/service

iv) Another product seems superior to currently used

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 2. Information Search
• Done from different sources – Internal / External

• Amount of information search & time/effort can vary

• Various options and their features/benefits

 Identify KEY Information Sources

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 2. Information Search
Internal Search :

• scanning one's memory to recall previous experiences

• or knowledge concerning solutions to the

problem/satisfying need

Used for frequently purchased (low involvement)

products/services
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 2. Information Search
External Search :

• Necessary when past experience/knowledge is

insufficient

• Risk of making a wrong purchase decision is high

Generally done for high involvement products

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 •Family, friends, neighbors
Personal Sources •Most influential source of
information

•Advertising, salespeople, dealers,

Commercial Sources company websites
•Receives most information
from these sources

•Mass Media, Reviews

Public Sources •Rating agencies, Online search

•Handling the product

•Examining the product
Experiential Sources •Using the product

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3. Evaluation of Alternatives
• Consumer uses the information collected to evaluate
the various alternatives

• Depends on the perceived performance of the brands

on important attributes for the consumer

• Important Attributes vary for each Customer &

Product (Eg. Laptop / Motorcycle ???)

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 4. Purchase Decision : Components
i. Product choice
ii. Brand choice
iii. Dealer choice
iv. Purchase Quantity
v. Timing of Purchase
vi. Payment Method

Explain ???
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 4. Purchase Decision
Components :

i. Product choice – pizza / burger, bike/scooter

ii. Brand choice – coke / pepsi, colgate / pepsodent
iii. Dealer choice – single/multi-brand, offline/online
iv. Purchase Quantity – one / many
v. Timing of Purchase – time of day/week/month, occasion
vi. Payment Method – cash, cheque, card, emi, coupons, online
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 5. Post Purchase Behaviour
• Consumers take further action after purchase, based
on their level of satisfaction or dissatisfaction

i. Usage – correct / incorrect

ii. Post Purchase Satisfaction
iii. Post Purchase Action
iv. Disposal – donate, resale, exchange, recycle, junk

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Customer Satisfaction

Trade-off between : E & P

(i) Expectations of the Customers before buying the

product / service (E) and

(ii) Actual Performance (P) after the consumer starts

using it

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 Customer Satisfaction
3 Possibilities : Different Reactions

1. E = P, customer is Satisfied

2. E > P, customer is Dis-Satisfied

3. E < P, customer is Delighted

Best Outcome ???

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 Buying Decision Process

 Consumers may skip some stages -

• Urgency – Bike breakdown, vacate house

• Past Experience / knowledge – chocolate / ice-cream

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 Cognitive Dissonance

• Post-purchase Mental discomfort

• Doubt regarding taking the right purchase

decision

• Eg. Purchase of Mobile phone, Clothes

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 Factors affecting CB
1. Cultural factors
2. Social factors
3. Personal factors
4. Psychological factors

• Cultural factors are believed to exert the broadest and

deepest influence on Consumer Behaviour

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 1. Cultural factors
a) Culture

b) Sub-Culture

c) Social Class

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 a) Culture
 Set of Basic Values, Perceptions, Preferences and
Behaviours learned by a member from family,
society & religious institutions

 Handed down from one generation to the next

 Eg. US & India – Cultural differences ???

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 b) Sub-Culture
 Include Nationalities, religions, racial groups and
geographic regions

 Based on Religion in India – Hindu, Muslims, Sikh,

Christian, Jain, Parsi, Buddhist etc

 Geographic regions like Bengali, Punjabi, Gujarati

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 c) Social Class
 Old Caste system - 4 types performing certain roles

 Socio-Economic Classification (SEC) :

Urban consumers - 8 categories (Education & Occupation) &
Rural consumers - 4 categories (Education & Type of House)

 Living Standards Measurement (LSM) :

Education and Ownership of 11 different items—electricity
connection, Mobile, AC, Washing Machines — indicator of
purchasing power
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 2. Social factors
a) Family
b) Reference Groups
c) Social Roles & Status

• Expose individuals to new behaviors & lifestyle

• Influence attitudes and self concept through WOM

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 a) Family
 Most important consumer buying organization in the
society - family members are most influential

 Shift from Joint to Nuclear Family System

• Family of Orientation – parents and siblings
• Family of Pro-creation – spouse and children

 Increasing role of Women & Children

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 b) Reference Groups
 Primary - friends, neighbors, co-workers

 Secondary - religious groups, trade unions, clubs,

professional bodies, sports teams

 Opinion Leaders - trendsetters purchase new products

before others and influence others in their purchases

 Celebrities, Social media influencers, Sarpanch 28

 c) Social Roles & Status
 Member in Groups - Organizations, Clubs, Society

 Position in the group defined in terms of Role & Status

 Role consists of activities a person is expected to

perform and each Role carries a Status (esteem)

 People choose products that reflect & communicate

role & status in society - eg. VP, Sales Manager, Clerk
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 3. Personal factors
Buyer’s decisions are also influenced by personal characteristics –

a) Age & Stage in Lifecycle

b) Occupation & Economic circumstances

c) Lifestyle

d) Personality & Self Concept

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 a) Age & Stage in Lifecycle
 People buy different goods and services over a lifetime -
food, clothes, furniture, recreation etc

 Family Lifecycle – Young Single, Young Couple, Single

Parent, Full Nest, Empty Nest, Older Single

 Critical life events/transitions – marriage, child birth,

illness, relocation, divorce, career change, widowhood etc
give rise to new needs
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 b) Occupation & Economic circumstances
 Occupation influences consumption patterns (Worker /
CEO – clothes, food, travel etc)

 Tailor products – eg. Softwares for Doctors, Engineers

 Product/Brand choice is affected by economic

circumstances (Rolex/Titan)

 Income, stability, savings, assets, borrowing power,

attitude towards spending/saving etc 32
 c) Lifestyle
 Person’s interaction with environment / world

 Pattern of Living in the World expressed in terms of

• Activities, Interests & Opinions

 Relationships between Products & Lifestyle groups -

Money-constrained (Walmart) or Time-constrained
(Food Processor, Zomato)
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 d) Personality & Self Concept
 Personality - human psychological traits

 Described in terms of traits : self-confidence,

dominance, autonomy, deference, sociability,
defensiveness, adaptability

 Consumers choose brands whose personalities match

with their own Self Concept
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 4. Psychological factors

a) Motivation
b) Perception
c) Learning
d) Memory
e) Beliefs and Attitudes

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 a) Motivation
 An activated state of NEED within a person that leads
to goal-directed behavior.

 Consists of the Drives, Urges, Wishes, or Desires that

initiate the sequence of events leading to a behavior.

Eg. Maslow’s Hierarchy of Needs – 5 levels

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 b) Perception

Process by which an individual selects, organizes and

interprets information inputs to create a meaningful
picture of the world

 Different Perceptions of same object due to : (Ads)

1) Selective Attention
2) Selective Distortion
3) Selective Retention
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 c) Learning
 Changes in an individual’s behaviour arising from
personal experience & acquired knowledge over time

 Knowledge can be obtained from reading,

discussing, observing, thinking or from actual
experience

Eg. LG products

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 d) Memory
 Storage of information and experience gathered over
their life time in the Brain - Short Term & Long Term
Memory

 Time elapsed since exposure & accessibility of

information

 Brand Recall & Recognition

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 e) Beliefs
 Descriptive thought Person holds about something

 May be based on real knowledge, opinion or faith

and may or may not carry an emotional charge

 Influence product/brand images, affecting buying

behaviour – eg. Patanjali

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 e) Attitudes

 Person’s favourable or unfavourable evaluations,

feelings and tendencies towards an object or idea

 Difficult to change for Marketers

 Eg. Dishwashers

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 Differences between CB & BB
• Reason for Buying
• Type of Buying
• Quantity purchased
• Price Negotiation
• Level of Service
• Number of Customers
• Geographical Concentration
• Technical Complexity
• Formal Agreement
• Customization
• Credit period
• Promotion media
• Number of People involved
• Time required for purchase
• Type of Product purchased
• Levels in Distribution
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 Moment of Truth (MOT)
• Moment when a customer/user interacts with a
brand, product or service to form or change an
impression about that particular brand, product or
service

• FMOT : First ?
• SMOT : Second ??
• ZMOT : Zero ???
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 The Traditional Advertising Model
• Advertising (mass media) : first touch point for brand
with consumers (Stimulus)

• FMOT : when the consumer saw the product in-store and

had to decide which brand to buy

• SMOT - after purchase when experienced quality of the

product, influenced decision to buy again or not

• Little opportunity for consumer feedback (Letters, WOM) 44

 Zero Moment of Truth (ZMOT)
 Coined by Google in their 2011 eBook : ZMOT

 ZMOT is the point in the buying cycle when the

consumer researches a product, prior to purchase

 Digital technology – more consumers researching a

product online prior to purchase & using Multiple
sources of information
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 Zero Moment of Truth (ZMOT)
• Consumers have unlimited resources at their fingertips for
research, fact-checks, price comparisons and testimonials

• Information resources used by consumers for making

purchase decisions fall outside direct control of businesses

• Most consumers solidify purchasing decisions before

entering a store or adding a product to their online
shopping cart
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 How to pass ZMOT test
• Maximum information about Product/Service, so shoppers
can compare (SEO, YouTube - product demo, webinars)

• Solicit reviews about your product– good/bad to improve

(customer testimonials, expert reviews, buyer’s guides,
case study)

• Digital marketing (Content marketing) to develop Brand

Advocates, lower acquisition costs, increase conversion
rates and increase CLV in Digital-first world. 48
Enjoy and Celebrate Life

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