t4mm3 Consumer Behaviour

SRI CHANDRASEKHARENDRA SARASWATHI VISWA MAHAVIDYALAYA
(University under section 3 of the UGC Act 1956)

Accredited with ‘A’ Grade by NAAC
ONLINE COURSE
DEPARTMENT OF MANAGEMENT STUDIES

CONSUMER BEHAVIOUR
DR. A.VANITHA
ASSISTANT PROFESSOR
SCSVMV DEEMED TO BE UNIVIERSITY
KANCHIPURAM-631561
E-MAIL : AVANITHA@KANCHIUNIV.AC.IN
MOBILE NO.: 8220781719
COURSE OUTCOMES
At the end of the course, the students will be able to
• Extrapolate the importance of consumer behaviour

concept & models in business & consumer decision
making process
• Understanding the Research framework in Consumer
Behaviour
• Apply factors influencing the Consumer Behaviour
• Recognize Individual Determinants of Consumer
behaviour
• Assess diffusion of innovations
• Synthesis of consumer decision making process
Unit I
Introduction to Consumer
Behavior
TOPICS TO BE COVERED
• Introduction to consumer Behavior
• Diversity of consumer behavior
• Concepts and need for studying
consumer behavior
• Consumer buying motive- types
Unit I
Behavior
Consumer behaviour can be defined as:
"The decision process and physical activity
engaged in when evaluating, acquiring, using
or disposing of goods and services."
This definition raises a few queries in our

minds-what or who are consumers? What is
the decision process that they engage in?
Answers to these questions help define the
broad nature of consumer behaviour.
WHO IS CONSUMER?
• A "consumer" is anyone who typically engages in
any one or all of the activities described in our
definition. Traditionally consumers have been
defined very strictly in terms of economic goods
and services, i.e. goods and services wherein a
monetary transaction is involved.
• A "customer" is one who actually purchases a
product or service from a particular organization
or shop. A customer is always defined in terms of
a specific product or company.
Diversity of consumer
1. Consumer’s age
2. Consumer’s gender and
marital status
1. Regional, ethnic, and
religious influences on
consumer behavior and
targeting specific
groups.
Age Affects Consumer Behavior
Gender Composition of Consumers
Diversity of Consumers
• Free to live, dress, and look the way they

want to
• With rising incomes, want to preserve

cultural identity
• Importance of style, self-image, and elegance

Diversity of Consumers
• Fastest growing major subculture

• More diverse than Hispanic and African
American
• Strong Emphasis
– Family
– Tradition
– Cooperation
• Shop frequently
Why study consumer behaviour?
• Understanding consumer behaviour will

help you become better marketers as it
is the foundation for
 Segmenting markets
 Positioning products
 Developing an appropriate marketing
 continued
• Knowledge of consumer behaviour is

essential for non-profit organizations
– Non profits have different customers to
please
– Donors, users, volunteers, general public,
government
• Public service initiatives have to be

based on an understanding of
consumer behaviour
– Canada’s largest advertiser is the federal
government
– Most government initiatives (e.g.,
antismoking campaigns) need a
knowledge of consumer behaviour to
succeed
» continued
• Better understanding of our own

consumption behaviour
TYPES OF BUYING MOTIVES
• Consumers have different kinds of needs & they do

not pursue all their needs at all points of time.
• Marketer in order to be successful, should
understand the needs, wants, buying motives &
feelings of potential customer. The important types
of buying motives are –
• Inherent &Learned Buying Motives,
• Emotional &Rational Buying Motives,
• Psychological & social Buying Motives.
Inherent &Learned Buying
Motives
• Inherent motives are those which arise from the basic

needs of consumers such as comfort & safety. These are
more instinctive in nature &influence the consumer the
maximum. If these motives remains unsatisfied , customer
is under tension. These motives are stronger ,more useful
& urgent.
• Learned motives are those motives which customer
acquires or learns from the environment in which he lives
or from his learning as he grows up in the society. These
motives are social status, social acceptance economic,
political acievement,fear,& security.
• Both these motives provide direction to company’s
marketing activities.
Emotional &Rational Buying Motives
• Emotional motives are those , which are affected by
consumer feelings & are often judged by using feelings or
affective part of consumer’s attitude. In this case heart
dominates over head & mind. The motives are hunger,
thirst, ego, prestige, pleasure, love & affection.
• Rational buying motives those where a consumer is
rational & his decision is based on logic & justification
while taking buying decision. In this case mind dominates
over heart. Often consumer takes more time in making
rational purchase.
• While buying over the counter (OTC) medicine a
consumer is more rational whereas in the case of buying a
chocolate , a consumer is more driven by emotional
motives.
Time Spent in Purchasing
• Emotional motives - purchaser needs little

time in making emotional purchases because
he immediately decides for the purchase.
• Rational motives – the purchaser has to
consider many factors like price,quality,after
sales service & other related matters & hence
takes time in making decisions for rational
purchases.
Dominance
• Emotional buying motives are dominated by

the feelings of the heart whereas in rational
buying motives head &mind dominates.
Nature of Product
• Emotional purchases are generally of the

goods which are low-priced & non –durable
in nature.
• In rational purchasing , the product is mostly
durable in nature & comparatively of high
price.
Psychological & social Buying
Motives
• Psychological are those motives which are
driven by internal psychological process like
learning, perception & attitude.
• Social motives are those motives are affected
by the society in which he lives. He cannot
purchase any thing without the sanction
&recognition of society.
Different Buying Roles
• There are eight different roles played by people in
consumer decision process.
• INITIATOR : a person who first suggests or thinks of the
idea of buying the particular product. child plays role of
initiator in the purchase of a chocolate.
• INFLUENCER : a person who explicitly or implicitly has
some influence on the final buying decision of others.
mother plays role of influence in the purchase of chocolate.
• GATEKEEPER :a person who allows certain information
to flow &restricts flow of some set of information. parents
play the role of gatekeeper in the selection of tv channels
for children.
• DECIDER : A person who ultimately determines any part
or the whole of the buying decision, i.e. Whether to buy
&what to buy , how to buy , when to buy or where to buy.
An individual plays role of decider in investment decision.
• BUYER : a person who actually purchases & pays for
purchase.
• USER : a person who actually uses or consumes the
services or products. house wife plays role of user in
purchase of washing machine.
• PREPARER: a person who converts the product to usable
form for consumption. mother plays role of prepare on
family consumption of food items.
• MAINTAINER : a person who service or repair the
product.
• DISPOSER : a person who finally disposes the package of
the product. mother plays of role of a disposer after the
product is consumed by the family.
References
• Blackwell, Miniard and Engel (2006). Consumer
Behaviour (10th Ed.). Thomson Learning.
• Deaton, Angus; Muellbauer, John, Economics and
Consumer Behavior, Cambridge ; New York : Cambridge
University Press, 1980. ISBN 0-521-22850-6
• Deutsch, D., & Deutsch, J. A. (1975). Short-term Memory.
New York: Academic Press.
• Ferber, R. (1976). A Synthesis of Selected Aspects of
Consumer Behaviour. Chicago, Ill.
SRI CHANDRASEKHARENDRA SARASWATHI VISWA MAHAVIDYALAYA
(University under section 3 of the UGC Act 1956)
Accredited with ‘A’ Grade by NAAC
ONLINE COURSE

T4MM3- CONSUMER BEHAVIOUR
DR. A.VANITHA
ASSISTANT PROFESSOR
SCSVMV DEEMED TO BE UNIVIERSITY
KANCHIPURAM-631561
E-MAIL : AVANITHA@KANCHIUNIV.AC.IN
MOBILE NO.: 8220781719
TOPICS TO BE COVERED IN THIS LECTURE
Understanding the Research framework

in Consumer Behaviour the use of
Consumer Characteristics in Market
segmentation.
05-Dec-20 3
Market segmentation
Market segmentation is the process of dividing
a market of potential customers into groups, or
segments, based on different characteristics.
The segments created are composed of
consumers who will respond similarly
to marketing strategies and who share traits
such as similar interests, needs, or locations
Steps of Market Segmentation
Step 1: The first job involved in segmenting
the markets is analysis of the affect and
cognitions, behaviours and environments
involved in the purchase/consumption process
of a particular product
Step 2: The second task of the marketers is to
decide the relevant bases for segmenting the
markets.
Step 3: The third task of the marketers is to
choose the suitable segmentation strategy
Criteria for useful segmentation
Measurability: It refers to the ability of the firm to
obtain information about the size, nature, and
behaviour of a market segment
Accessibility: It is the degree to which the targeted
segments can be reached
Sustainability: It refers to the size of the market, i.e.,
whether the segment can generate adequate
volume of sales for its feasibility or not
Congruity: It refers to how similar the members
within the segment are in terms of behaviours or
characteristics that correlate with the behaviour.
Targeting are three types
Behaviour
Opening Vignettes
 Tim Horton’s started in 1964
• Merged with Wendy’s in 1999
• Has operations in several states in
the US
• Mercedes Who is likely to be the
typical buyer of Smart?
Copyright © 2006 Pearson Education Canada Inc. 1-2

Consumer Behaviour
The behaviour that consumers

display in searching for,
purchasing, using, evaluating,
and disposing of products and
services that they expect will
satisfy their needs.
Personal Consumer
The individual who buys goods

and services for his or her own
use, for household use, for the
use of a family member, or for a
friend.
Development of the Marketing
Concept
Production
Concept
Product Concept
Selling Concept
Marketing
Concept
The Production Concept
 Assumes that consumers are interested
primarily in product availability at
low prices
 Marketing objectives:
– Cheap, efficient production
– Intensive distribution
– Market expansion

The Product Concept
 Assumes that consumers will buy the

product that offers them the highest
quality, the best performance, and the
most features
– Quality improvement
– Addition of features
 Tendency toward Marketing Myopia
The Selling Concept
 Assumes that consumers are unlikely

to buy a product unless they are
aggressively persuaded to do so
– Sell, sell, sell
 Lackof concern for customer needs
and satisfaction
The Marketing Concept
 Assumes that to be successful, a

company must determine the needs and
wants of specific target markets and
deliver the desired satisfactions better
than the competition
– Profits through customer satisfaction
Business Leaders Who Understood
Consumer Behaviour
 AlfredSloan, General Motors
 Colonel Sanders, KFC
 Ray Kroc, McDonald’s

Implementing the Marketing
Concept
 Consumer Research
 Segmentation
 Targeting
 Positioning

Segmentation, Targeting, and
Positioning
 Segmentation: process of dividing the
market into subsets of consumers with
common needs or characteristics
 Targeting: selecting one ore more of
the segments to pursue
 Positioning: developing a distinct
image for the product in the mind of
the consumer
Successful Positioning
 Communicating the benefits of

the product, rather than its
features
 Communicating a Unique Selling
Proposition for the product

The Marketing Mix
 Product
 Price
 Place
 Promotion

The Societal Marketing Concept
 All companies prosper when society
prospers.
 Companies, as well as individuals,
would be better off if social
responsibility was an integral
component of every marketing decision.
 Requires all marketers adhere to
principles of social responsibility.
Digital Revolution in the
Marketplace
 Allows customization of products,
services, and promotional messages
like never before
 Enhances relationships with customers
more effectively and efficiently
 Has increased the power of customers
and given them access to more
information
Digital Revolution in the
Marketplace - Continued
 The exchange between consumers
and marketers has become more
interactive
 May affect the way marketing is
done

Changes brought on by the
digital revolution
 Changes in segmentation strategies
 Re-evaluation of promotional budgets
– reduced impact of television?
– More internet-based promotion?
 Integrated marketing becomes critical
– Using off-line promotions to drive
consumers to company’s website (and
vice-a-versa)
» Continued
Changes brought on by the digital
revolution - continued
 Revamping distribution systems
– Direct distribution becomes more of an option
 Pricingmethods may need to be re-
evaluated
– Comparison shopping made easier
 Consumer research methods may
change
– How do you measure web-based promotions?
 Understanding consumer behaviour

will help you become better marketers
as it is the foundation for
 Segmenting markets
 Positioning products
 Developing an appropriate marketing
 continued

 Knowledge of consumer behaviour is

essential for non-profit organizations
– Non profits have different customers to
please
– Donors, users, volunteers, general public,
government
» continued

 Publicservice initiatives have to be
based on an understanding of
consumer behaviour
– Canada’s largest advertiser is the federal
government
– Most government initiatives (e.g.,
antismoking campaigns) need a
knowledge of consumer behaviour to
succeed
» continued
 Better
understanding of our own
consumption behaviour

1-24
References
 Laermer, Richard; Simmons, Mark, Punk Marketing, New York : Harper Collins, 2007. ISBN 978-0-
06-115110-1 (Review of the book by Marilyn Scrizzi, in Journal of Consumer Marketing 24(7),
2007)
 Loudon, D.L. (1988), Consumer Behavior: Concepts and Applications, McGraw Hill, London.
 McGuire, W. J. (1976). "Psychological Factors Influencing Consumer Choice," in R. Ferber, ed., A
Synthesis of Selected Aspects of Consumer Behavior. Washington, D.C: National Science
Foundation.
 McNair, B. (1958), Retail Development, Harper & Row, New York, NY.
 Packard, Vance, (1957) The Hidden Persuaders, New York, D. McKay Co.
 Pollio, H. R. (1974). The Psychology of Symbolic Activity. Reading, MA: Addison-Wesley
 Schiffman, L. G. (1993), Consumer Behavior, Prentice Hall International, London; Schiffman, L. G.
and Kanuk, L. (2010), 10th edition;[1] Schiffman, L. G. and Wisenblit, J. L., (2015), 11th edition. [2]
 Solomon, M.R. (1994), Consumer Behavior, Allyn & Bacon, London.
 Stefflre, V. (1968). Market Structure Studies: New products for old markets and new markets
(foreign) for old products. New York: Wiley.
 Tversky, A., & Kahneman, D. (1982). Judgment under Uncertainty: Heuristics and
biases Cambridge University Press

MARKET SEGMENTATION
• CONCEPT AND DEFINITION
The concept of market segment is based
on the fact that the market of commodities
are not homogeneous but they are
heterogeneous. Market represent a group
of customer having common
characteristics but two customer are never
common in their nature, habits, hobbies
income and purchasing techniques.
• According to Philip kotler , “ Market
segmentation is sub-dividing a market into
distinct and homogeneous subgroups of
customers, where any group can
conceivably be selected as a target market
to be met with distinct marketing mix.”
• Market Segmentation is a method of
“dividing a market (Large) into smaller
groupings of consumers or organisations
in which each segment has a common
characteristic such as needs or
behaviour.”
Henry Ford epitomized this strategy when he offered the
Model- T Ford in one colour , black.
LEVELS OF MARKET
SEGMENTATION
1. SEGMENT MARKETING
Consists of a group of customers
who share a similar set of needs
and wants.
Identifiable Group with in a

Market with Similar
• Wants
• Purchasing Power
• Geographical Location
• Buying Attitudes
FLEXIBLE MARKET OFFERING
• Even in segments 100 % needs are not
same – consists of two parts
1.Naked Solution :- products and services that
all members of the segment values.
2.Discretionary options :- that some segment
members value. Each option might carry an
additional charge.
 Example: Automobile industry – basic model is
same but for A.C , power steering, power
window buyer
has to pay extra price.
 Delta Airlines offers all economy
passengers a seat and soft drinks. It
charges economy passengers extra for
alcoholic beverages.
 Market Segments can be defined in many
different ways. One way to carve up a
market is to identify Preference
segments
Suppose ice cream buyers are asked how
much they value sweetness and
creaminess as two product attributes.
Three different patterns can emerge.
Homogeneous preference :
– where all the consumer have roughly the same preferences.
– We would predict that existing brand would be similar and cluster
around the middle of the scale in both sweetness and
creaminess.
Diffused preference :
– consumers vary greatly in their preferences
Clustered preference :
creaminess
sweetness
Homogeneous Preference
-no natural segments
-all buyers have same preference
creaminess
sweetness
Diffused Preference
-no pattern (…or poor research)
-take center position
creaminess
sweetness
Clustered Preference
-natural segments
-increases as number of competitors increases
2. NICHE MARKETING
 Group of customers seeking a distinctive mix of benefits who are
ready to pay extra premium.
 Niche = segment sub – segments
Eg. Washing detergents hard & gentle washes . Surf

excel for tough stains ( hard on clothes) & Ezee from Godrej for
delicate clothes.
--- Astha , Sanskar , Q TV – focus on religion & spiritualism.
 DISTINCT NEEDS
 PAY PREMIUM
 SPECIALIZATION
 LESS COMPETITION
 POTENTIAL
ROLLS ROYCE
3. LOCAL MARKETING
• Marketing programs tailored to the needs & wants of local customer
groups in trading areas, neighborhoods , etc.
• this trend is called grass roots marketing.
Ex. – Spiderman 3 was released in 5 different language in India

including bhojpuri.
Pune
Chitle sarees
Kashmiri silk
4. INDIVIDUAL MARKETING
• Ultimate segmentation – segments of 1 or customized marketing or
one to one marketing.
• Customerization – empower the consumers to design the product or
service offering of their choice.
• Ex. Paint companies have started doing this- Asian Paint , Nerolac ,
Berger Paints
• Arvind mills launched Ruff’n Tuff Jeans, branded ready – to – stitch
GEOGRAPHIC SEGMENTATION
Divide the market into different group based on :
• Region – South India , North , Western Region, East
• City – metro cities, cities with population more than 1
million
• World
• Density
• Climate
• States
Ex.- Mcdonalds globally, sell burgers aimed at local

markets, for example, burgers are made from lamb in
India rather then beef because of religious issues. In
Mexico more chilli sauce is added and so on.
DEMOGRAPHIC
SEGMENTATION
As people age their needs and wants change, some
organisations develop specific products aimed at
particular age groups for example nappies for babies,
toys for children, clothes for teenagers and so on.
Gender segmentation is commonly used within the

cosmetics, clothing and magazine industry.
In the UK we have also seen the introduction of Maxim,

(www.maxim-magazine.co.uk) a male lifestyle
magazine covering male fashion, films, cars, sports and
technology. \
•
• Income segmentation is another strategy used by
many organisations. Stores like Harrods, Harvey
Nicohals are predominantly aimed at the affluent
market. Daewoo aim their vehicles at price sensitive
buyers who require a bundle of benefits for the price.
In today's globally competitive environment brands are
specifically developed and positioned within particular
income segments inorder to maximise turnover.
• Products and services are also aimed at
different lifecycle segments. Holidays are developed
for families, the 18-30's singles, and for those in their
50's.
PSYCHOGRAPHIC
SEGMENTATION
• Lifestyle groups
Yuppie Associations
• Mobile
• High valued house/flat
• Good Salary
• Young branded car.
Third Agers Associations.
• 50's
• Retired early from profession.
• Time to spare
• Adventure Seekers
BEHAVIOURAL SEGMENTATION
OCCASIONS - Archies and Hallmark
cards, Monaco at tea time.
 BENEFITS – Shampoo for hair conditioning,
cleaning , hair fall defence dandruff control
 USER STATUS- light – medium – heavy
user
 LOYALTY STATUS- hardcore loyal , split
loyal- loyal to 2-3 brand ,shifting loyal,
switcher
References
• Guilford, J. P. (1967). The Nature of Human Intelligence. New York: McGraw-Hill.
• Howard, J., Sheth, J.N. (1968), Theory of Buyer Behavior, J. Wiley & Sons, New York, NY.
• Kardes, Frank R.; Cronley, Maria L.; Cline, Thomas W., Consumer Behavior, Mason, OH : South-
Western, Cengage Learning, 2011. ISBN 978-0-538-74540-6
• Kaplan, M. F., & Schwartz, S. (1975). Human Judgment and Decision Processes. New York: Academic Press.
• Klapper, J. T. (1949). The Effects of Mass Media. New York: Columbia University, Bureau of Applied Social
Research.
• Laermer, Richard; Simmons, Mark, Punk Marketing, New York : Harper Collins, 2007. ISBN 978-0-06-115110-
1 (Review of the book by Marilyn Scrizzi, in Journal of Consumer Marketing 24(7), 2007)
• Loudon, D.L. (1988), Consumer Behavior: Concepts and Applications, McGraw Hill, London.
• McGuire, W. J. (1976). "Psychological Factors Influencing Consumer Choice," in R. Ferber, ed., A Synthesis of
Selected Aspects of Consumer Behavior. Washington, D.C: National Science Foundation.
• McNair, B. (1958), Retail Development, Harper & Row, New York, NY.
• Packard, Vance, (1957) The Hidden Persuaders, New York, D. McKay Co.
• Pollio, H. R. (1974). The Psychology of Symbolic Activity. Reading, MA: Addison-Wesley
• Schiffman, L. G. (1993), Consumer Behavior, Prentice Hall International, London; Schiffman, L. G. and Kanuk, L.
(2010), 10th edition;[1] Schiffman, L. G. and Wisenblit, J. L., (2015), 11th edition.[2]
• Schwartz, Barry (2004), The Paradox of Choice: Why More Is Less, Ecco, New York.
• Shell, Ellen Ruppel, Cheap: The High Cost of Discount Culture, New York : Penguin Press, 2009. ISBN 978-1-
59420-215-5
• Solomon, M.R. (1994), Consumer Behavior, Allyn & Bacon, London.
• Stefflre, V. (1968). Market Structure Studies: New products for old markets and new markets (foreign) for old
products. New York: Wiley.
• Tversky, A., & Kahneman, D. (1982). Judgment under Uncertainty: Heuristics and biases Cambridge University
Press
What is Market Segmentation?
 The process of breaking of buyers into groups that are
different from each other but internally similar
 Applicable any marketing situation: Business to
business, business to consumer, not-for-profit, politics
Why segment?
 Starts from the premise that all buyers are not the
same: profit/volume potential, motivations, product
uses, needs and desires, etc.
 Segmentation allows you to chose which buyers to
target and provides important insights as to how to
appeal to them.
 Significant competitive advantage
How Segmentation fits with other
business activity
Segmentation Strategy Tactics

Segmentation has great impact on
strategy and tactical development
Strategy Offering Marketing Tactics

• Target Market(s) • Product Line • Advertising and other
• Offering Strategy • Associated Service communication
Bundle (message and media)
• Distribution
Channels
• Pricing
• Sales force allocation
• Promotion
Market Segmentation
Characteristics
 age
 gender
 geographic location
 income
 spending patterns
 cultural background
 demographics
 marital status
 education
 language
 mobility
Market Segmentation
4 commonly used bases for Segmentation
Descriptive
geographic location
demographic
Behavioural
psychographic
benefits
Slide 3-7 Figure 3.1 Bases for Market Segmentation
Market Segmentation
geographic location - based upon where people live
(historically a popular way of dividing markets)
demographic - based upon age, gender and income level

(very often used)
Market Segmentation
Psychographic / lifestyles - based on people’s opinions,
interests, lifestyles
eg, people who like hard rock music probably prefer
beer to wine
benefits - based on the different expectation that

customers have about what a product/service can do
for them
eg. People who want to but “lite” food cause it will help
them lose weight
Geographic Segmentation
The reason why we study geographic segmentation is

because WHERE people live has a big effect on their
consumption patterns.
Additionally, WHERE people live in a city is also a

reflection of their income level and we can make
certain assumptions about their ABILITY TO SPEND.
This helps people plan store locations and the location

of other services.
Demographic Segmentation
Demographic Segmentation is the most common

approach to Market Segmentation
Variables are:
• age
• gender (male/female)
• income
• occupation
• education
• household (family - style) size
Variables are:
• gender (male/female)
•gender is an obvious way to divide the market into
segments since so many products are gender-specific
• clothing
• medical products
• sports products/services
• entertainment
Variables are:
age
• age is another obvious way to divide the market into
segments since so many products are based upon
“time of life”
• diapers for babies
• toys for children
• entertainment for “over 18”
Variables are:
•household (family - style) size
• Segmenting by the “stages in the family life cycle”
• There are different buying characteristics of people

in each stage of the family
•household (family - style) size
BUYING PATTERNS
• 0-5 young children
• 6-19 school children
• 20-34 young adults
• 35-49 younger middle-aged
• 50-64 older middle-aged
• 65+ seniors
• 80+ SUPER seniors
income
Segmenting markets on the basis of income and expenditure
patterns.
Income is possibly the most common basis for segmentation
Upper High Class
High Class
Uper Middle Class
Middle Class
Lower Middle Class
Toyota
• Lexus for high end
• Camry for the middle of the roaders
• Corolla for low end
HUL soaps - Dove for high end, Hamam

Psychographic Segmentation
“The use of psychological attributes,

lifestyles and attitudes in determining
the behavioral profiles of different
customers”
Psychographic Segmentation
Psychographic profiles on a target market segment are

obtained by doing a lot of questionnaires and surveys to
ask people if they agree/disagree with certain statements
made about particular activities, interests or opinions
AIO - activities, interests, and opinions

Behavioural Segmentation
On the basis of occasions, product usage, benefits

sought, brand loyalty
Occasions
• Y2K Cruises
• Hallmark Cards
• a greeting card for every occasion -
Valentine’s Day Card, Deepavali card
References
 Kaplan, M. F., & Schwartz, S. (1975). Human Judgment and Decision Processes. New York: Academic Press.
 Klapper, J. T. (1949). The Effects of Mass Media. New York: Columbia University, Bureau of Applied Social
Research.
 Laermer, Richard; Simmons, Mark, Punk Marketing, New York : Harper Collins, 2007. ISBN 978-0-06-
115110-1 (Review of the book by Marilyn Scrizzi, in Journal of Consumer Marketing 24(7), 2007)
 Loudon, D.L. (1988), Consumer Behavior: Concepts and Applications, McGraw Hill, London.
 McGuire, W. J. (1976). "Psychological Factors Influencing Consumer Choice," in R. Ferber, ed., A Synthesis of
Selected Aspects of Consumer Behavior. Washington, D.C: National Science Foundation.
 McNair, B. (1958), Retail Development, Harper & Row, New York, NY.
 Packard, Vance, (1957) The Hidden Persuaders, New York, D. McKay Co.
 Pollio, H. R. (1974). The Psychology of Symbolic Activity. Reading, MA: Addison-Wesley
 Schiffman, L. G. (1993), Consumer Behavior, Prentice Hall International, London; Schiffman, L. G. and Kanuk,
L. (2010), 10th edition;[1] Schiffman, L. G. and Wisenblit, J. L., (2015), 11th edition.[2]
 Schwartz, Barry (2004), The Paradox of Choice: Why More Is Less, Ecco, New York.
 Shell, Ellen Ruppel, Cheap: The High Cost of Discount Culture, New York : Penguin Press, 2009. ISBN 978-1-
59420-215-5
 Solomon, M.R. (1994), Consumer Behavior, Allyn & Bacon, London.
5-1
Unit-III
Factors Affecting Consumer Behavior

5-2
Factors Affecting Consumer Behavior:
Culture
• Most basic cause of a person's wants and
behavior.
• Values
• Perceptions
Subculture Social Class
• Groups of people with shared • People within a social class
value systems based on tend to exhibit similar buying
common life experiences. behavior.
• North Indian Consumers • Occupation
• African American Consumers • Income
• Asian American Consumers • Education
• Mature Consumers • Wealth
5-3
Social
Groups
•Membership
•Reference
Family
•Husband, wife, kids Social Factors
•Influencer, buyer, user
Roles and Status

5-4
Personal
Personal Influences
Age and Family Life Cycle

Occupation
Stage
Economic Situation Personality & Self-Concept
Lifestyle Identification
Activities Opinions
Interests
VALS 2 5-5
Actualizers Abundant Resources
Principle Oriented Status Oriented Action Oriented
Fulfilleds Achievers Experiencers
Believers Strivers Makers
Strugglers
Minimal Resources
5-6
Psychological
Motivation
Beliefs and Psychological

Factors Perception
Attitudes
Learning
5-7
• Schiffman, L. G. (1993), Consumer Behavior, Prentice Hall

International, London; Schiffman, L. G. and Kanuk, L. (2010),
10th edition;[1] Schiffman, L. G. and Wisenblit, J. L., (2015),
11th edition.[2]
• Schwartz, Barry (2004), The Paradox of Choice: Why More Is
Less, Ecco, New York.
• Shell, Ellen Ruppel, Cheap: The High Cost of Discount Culture,
New York : Penguin Press, 2009. ISBN 978-1-59420-215-5
• Solomon, M.R. (1994), Consumer Behavior, Allyn & Bacon,
London.
• Stefflre, V. (1968). Market Structure Studies: New products for
old markets and new markets (foreign) for old products. New
York: Wiley.
• Tversky, A., & Kahneman, D. (1982). Judgment under
Uncertainty: Heuristics and biases Cambridge University
Press
Unit-IV
Individual Determinants of Consumer

behaviour
INTERNAL INFLUENCES ON CONSUMERS DECISION
MAKING
• MOTIVATION & INVOLVEMENT

• ATTITUDE
• PERSONALITY AND SELF CONCEPT
• LEARNING AND MEMORY
• INFORMATION PROCESSING
EXTERNAL INFLUENCES ON CONSUMER BEHAVIOUR
• CULTURAL INFLUENCES
• SUB-CULTURAL INFLUENCES
• SOCIAL CLASS
• SOCIAL GROUP INFLUENCES
• FAMILY INFLUENCES
• PERSONAL INFLUENCES
• OTHER INFLUENCES
MOTIVATION
“Motivation is driving force within individuals that impels
them to action”-Schiffman
– Is the energizing force that causes behavior that satisfies a need.

– Needs are hierarchical
– Once basic physiological needs are met, people seek to satisfy
learned needs
PERSONALITY
“Personality are those inner psychological characteristics
that both determine and reflect how a person responds
to his or her environment”-Schiffman
– A person's consistent behavior or responses to recurring
situations.
– Research suggests that key traits affect brand and product-
type preferences.
– Revealed in persons self concept
PERCEPTION
“Perception is defined as the process by which an individual selects,

organizes and interprets stimuli into a meaningful and coherent
picture of the world”-Schiffman.
LEARNING
“Consumer learning is a process by which individuals
acquire the purchase and and consumption knowledge
and experience that they apply to future related
behavior”-Schiffman
Four variables-
• Drive
• Cue
• Response
• Reinforcement
VALUES, BELIEFS, AND ATTITUDES
1. ATTITUDE FORMATION
– A learned predisposition to respond to an object or class of
objects in a consistently favorable or unfavorable way.
– Shaped by our values and beliefs, which are learned.
2. VALUES
Personally or socially preferable modes of conduct or states of
existence that are enduring
3. BELIEFS
Consumer's subjective perception of how well a product or brand
performs on different attributes.
PERSONAL INFLUENCE
Aspects of Personal Influence is important to marketing

– Opinion leaders: Individuals who exert direct or indirect social
influence over others
– Word of mouth: People influencing each other during face-to-
face conversations.
– Power of word of mouth has been magnified by the Internet
and e-mail
REFRENCE GROUPS
Reference groups are people to whom an individual looks as a basis

for self-appraisal or as a source of personal standards. Reference
groups have an important influence on the purchase of luxury
products but not of necessities.
1. Membership group: one to which a person actually belongs.
2. Aspiration group: one with which a person wishes to be
identified.
3.Dissociative group: one from which a person wants to maintain a
distance because of differences in values or behaviors
FAMILY INFLUENCE
“Family is defined as two or more persons related by blood,

marriage, or adoption who reside together.”
Family influences on consumer behavior result from three

sources:
• consumer socialization
• passage through the family life cycle
• decision making within the family
SOCIAL CLASS
– The relatively permanent, homogeneous divisions in a society

into which people sharing similar values, interests, and
behavior are grouped.
– Determinants of social class include
• occupation,
• source of income (not level of income)
• education
CULTURE AND SUBCULTURE
• Culture refers to the set of values, ideas and attitudes that are
accepted by a homogeneous group of people and transmitted to
the next generation.
• Subcultures - groups within the larger, or national, culture with

unique values, ideas, and attitudes .
References
• Solomon, M.R. (1994), Consumer Behavior,
Allyn & Bacon, London.
• Stefflre, V. (1968). Market Structure Studies:
New products for old markets and new markets
(foreign) for old products. New York: Wiley.
• Tversky, A., & Kahneman, D. (1982). Judgment
under Uncertainty: Heuristics and
biases Cambridge University Press
5-1
Unit V
DIFFUSION AND
ADOPTION
THE DIFFUSION PROCESS 5-2
• Diffusion is the process by which the

acceptance of an innovation( a new product,
new service, new idea, or new practice) is
spread by communication(mass media,
sales people or informal conversations) to
members of a social system (a target
market) over a period of time
• Four basic elements of the diffusion
process
1. the innovation
2. the channels of communication
3. the social system, and
4. time
The innovation 5-3
• Firm-oriented approach
• Product oriented approach
• Market-oriented approach
• Consumer oriented approach
Adoption
• The focus of this process is the stages

through which an individual consumer
passes while arriving at a decision to try or
not to try or to continue using or to
discontinue using a new product.
Stages in the Adoption Process 5-4
Awareness
Interest
Evaluation
Trial
Adoption
Adoption of Innovations
Percentage of Adopters
5-5
Early Majority Late Majority

Innovators
Early
34% 34% Laggards
Adopters
13.5% 16%
2.5% Time of Adoption
Early Late
5-6
Adopter categories
1. Innovators
o Representing about 3 % of the market
o They are the first to adopt an innovation
o Young, high social status, good financial
shape, broad social relationship
o Rely on non personal sources of info. Such
as advertisement.
5-7
2. Early adopters:
o Comprising about 13 % of the market
o They purchase a new product or service
after innovators but sooner than other
consumers
o High social status
o Sales people are used as info. sources
3. Early Majority:
o This group is above average in social &
economic measures
o Rely on ads, sales person & contact with
early adopters
5-8
4. Late Majority :
o Representing about 34 % of the market
o Adopt an innovation to save money or in
response to social pressure from their
peers
o Rely on members of the early & late
majorities as source of info.
5. Laggards:
o Last to adopt an innovation
o Older & usually are at the low end of the
social & economic scales
5-9
Relationship Marketing (or

relationship management) is a
philosophy of doing business, a
strategic orientation that focuses on
keeping and improving current
customers rather than on acquiring
new customer.
5-10
CUSTOMER SATISFACTION
• The most important asset of any

organization is its customers
• Satisfied customers pay their bills
promptly which greatly improves
cash flow – the lifeblood of any
organization
5-11
ORGANIZATIONAL HIERARCHIAL
DIAGRAM
•
5-12
• CUSTOMERS EXPERIENCE OF A
PRODUCT OR A SERVICE IS
MULTIFACETED SO HARD TO
DETERMINE
• IT NEEDS TO BE MEASURED
INDIVIDUALLY TO GET AN
ACCURATE TOTAL PICTURE OF
5-13
• Customer satisfaction should not be

viewed in a vacuum.
• For example, a customer may be
satisfied with a product or service
and therefore rate the product or
service highly in a survey and yet
same customer may buy another
product.
5-14
• Similarly customer’s view about a
product or service are useless if
customer’s view about competitors
products are not understood.
5-15
• The value customers places on the
product compared to another may be
a better indication of customer
loyalty.
5-16
Customerization
• Customerization is the customization of
products or services through personal
interaction between a company and its
customers. A company is customerized when it
is able to establish a dialogue with individual
customers and respond by customizing its
products, services, and messages on a one-to-
one basis.
Enhance Customer Satisfaction 5-17
• Communicate. Communication with the customer is the

key to enhancing customer satisfaction. Follow Up and
Follow Through to assure and confirm expectations have
been satisfied.
• Be Confident. Customers like to deal with people who
know what they are doing. We don’t want to hear, “This is
my first time doing this so …”
• Be Professional. The customer is always right – even
when they are wrong.
• Build Customer Confidence. Your performance and ability
to meet the customers’ needs will re-assure them that they
have made the right decision.
• Build Value (Reputation). Be effective and
perform efficiently: Everyone wants the best lawyer or the
best doctor. “We have the best person on it.”
5-18
• Ask the customer. Is there anything else we can do for you

today? This suggests that you are able to do more if
necessary. The customer may just say, “Not today, but may
be next time.” At least you know they’ll may be back versus
NEVER.
• Don’t send out surveys. There are many ways to measure
customer satisfaction without sending surveys. “Paying”
someone to provide an opinion may even change it. “Will I
still get a free lunch if I tell you what I’m really
thinking?” Remember the Vending Machine example from
above? The vending machine knows exactly how poor
performance looks and feels.
5-19
• Be THE Solution. We coined a phrase some

time ago – “Thinking so you don’t have
to.” Take away the problem and be the
solution.
• Thank You. Show your customers that you
appreciate their business. It may be as easy as
saying “Thank You for Your Business.”
• Smile – Whether the customer can see you or
not – SMILE. Studies have suggested that
people know or can sense when other people
are smiling. We can’t quote a source for this
statement, however, smiling is also good for
you.
5-20
Sources of customer dissatisfaction
• Quality of product.
• Speed of service as compared to expectations
• Responsiveness of customer service
• Not Keeping Promises
• Transferring From One CSR to Another
• Rude Staff
• Not Listening to Customers
• Hidden Information and Costs
• Keeping an Issue Unresolved
• Inaccessibility
5-21
Customer retention
• Customer retention is the activity that a selling

organization undertakes in order to reduce
customer defections. Successful customer
retention starts with the first contact an
organization has with a customer and
continues throughout the entire lifetime of a
relationship.
Customer retention strategies 5-22
1. Stand for something

2. Utilize positive social proof
3. Invoke the inner ego
4. Use the words they love to hear
5. Reduce pain points and friction
6. Realize that budget is negligible
7. Utilize surprise reciprocity
8. Make it personal
9. Speed is secondary to quality
10. Customers enjoy businesses who know them
11. Choose the right platform.
12. Make it a communal effort.
13. Label your customers
5-23
• Loudon, D.L. (1988), Consumer Behavior: Concepts and

Applications, McGraw Hill, London.
• McGuire, W. J. (1976). "Psychological Factors Influencing
Consumer Choice," in R. Ferber, ed., A Synthesis of Selected
Aspects of Consumer Behavior. Washington, D.C: National
Science Foundation.
• McNair, B. (1958), Retail Development, Harper & Row, New
York, NY.
• Packard, Vance, (1957) The Hidden Persuaders, New York, D.
McKay Co.
• Pollio, H. R. (1974). The Psychology of Symbolic Activity.
Reading, MA: Addison-Wesley
• Schiffman, L. G. (1993), Consumer Behavior, Prentice Hall
International, London; Schiffman, L. G. and Kanuk, L. (2010),
10th edition;[1] Schiffman, L. G. and Wisenblit, J. L., (2015),
11th edition.[2]
Unit -VI
Consumer Decision Making
process
4
chapter
©2003 South-Western
Consumer Decision-Making 2
Process
A five-step process used

by consumers when buying
goods or services.
Consumer Decision-Making 2
Process
Need Recognition
Information Search
Cultural, Social,
Individual and
Psychological Evaluation
Factors of Alternatives
affect
all steps Purchase
Postpurchase
Behavior
2
Need Recognition
Result of an imbalance
between actual and
desired states.
2
Need Recognition
Marketing helps Internal Stimuli

consumers
and
recognize an
External Stimuli
imbalance between
present status and
preferred state Preferred State
Present Status
2
Stimulus
Any unit of input affecting
one or more of the five
senses:
sight
smell
taste
touch
hearing
2
Want
Recognition of an
unfulfilled need and
a product
(or attribute or feature)
that will satisfy it.
2
Recognition of Unfulfilled Wants
 When a current product isn’t
performing properly
 When the consumer is running

out of an product
 When another product seems

superior to the one currently used
2
Information Searches
Process of recalling past

Internal
information stored
in the memory.
Process of seeking
External
information in the
outside environment.
2
Information Search
Internal Information Search
 Recall information in memory
External Information search
 Seek information in outside

environment
 Non-marketing controlled
 Marketing controlled
2
External Information Searches
Need Less Need More
Information Information
Less Risk More Risk

More knowledge Less knowledge
More product Less product
experience experience
Low level of interest High level of interest
2
Evoked Set
Group of brands,
resulting from an
information search,
from which a buyer
can choose.
2
Evaluation of Alternatives
Evoked Set
Evaluation of Products
Analyze product attributes
Use cutoff criteria
Rank attributes by
importance
Purchase!
2
Purchase
To buy
or not to buy... Determines which attributes
are most important
in influencing a
consumer’s choice
3
Cognitive Dissonance
Inner tension that a

consumer experiences
after recognizing an
inconsistency between
behavior and values
or opinions.
3
Postpurchase Behavior
Cognitive Dissonance
?
Did I make a good decision?
Did I buy the right product?
Did I get a good value?

Can minimize through:
Effective Communication
Follow-up
Guarantees
Warranties
Types of Consumer Buying 4
Decisions
Routine Limited Extensive

Response Decision Decision
Behavior Making Making
Less More
Involvement Involvement
Involvement and Decision Making
High Involvement
 Extended Problem Solving
 eg buying a car, computer
 Limited Problem Solving
 eg buying clothes
Low Involvement
 Habitual Decision Making
 eg buying soft drinks
4
Five Factors influencing Decisions
1. Level of consumer involvement

2. Length of time to make decision
3. Cost of good or service
4. Degree of information search
5. Number of alternatives considered
4
Routine Response Behavior
 Little involvement in selection process

 Frequently purchased low cost goods
 May stick with one brand
 Buy first/evaluate later
 Quick decision
4
Limited Decision Making
 Low levels of involvement
 Low to moderate cost goods
 Evaluation of a few alternative

brands
 Short to moderate time to decide

4
Extensive Decision Making
 High levels of involvement
 High cost goods
 Evaluation of many brands
 Long time to decide
 May experience cognitive dissonance
4
Level of Involvement
Previous
Experience
Interest
Factors Perceived Risk of

Determining Negative
Level of Consequences
Involvement
Situation
Social Visibility
Marketing Implications of 4
Involvement
High-involvement Low-involvement
purchases purchases
require: require:
extensive in-store
promotion to promotion and
target market eye-catching
and package design
good
advertisement
Factors Influencing Buying 4
Decisions
Cultural Social
Factors Factors CONSUMER BUY /
DECISION-
MAKING DON’T BUY
Psycho- PROCESS
Individual logical
Factors Factors
References
 Kaplan, M. F., & Schwartz, S. (1975). Human Judgment and Decision
Processes. New York: Academic Press.
 Klapper, J. T. (1949). The Effects of Mass Media. New York: Columbia
University, Bureau of Applied Social Research.
 Laermer, Richard; Simmons, Mark, Punk Marketing, New York : Harper
Collins, 2007. ISBN 978-0-06-115110-1 (Review of the book by Marilyn Scrizzi,
in Journal of Consumer Marketing 24(7), 2007)
 Loudon, D.L. (1988), Consumer Behavior: Concepts and Applications,
McGraw Hill, London.
 McGuire, W. J. (1976). "Psychological Factors Influencing Consumer Choice,"
in R. Ferber, ed., A Synthesis of Selected Aspects of Consumer Behavior.
Washington, D.C: National Science Foundation.

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SRI CHANDRASEKHARENDRA SARASWATHI VISWA MAHAVIDYALAYA

(University under section 3 of the UGC Act 1956)

DEPARTMENT OF MANAGEMENT STUDIES

• Extrapolate the importance of consumer behaviour

This definition raises a few queries in our

• Free to live, dress, and look the way they

• With rising incomes, want to preserve

• Importance of style, self-image, and elegance

• Fastest growing major subculture

• Understanding consumer behaviour will

• Knowledge of consumer behaviour is

• Public service initiatives have to be

• Better understanding of our own

• Consumers have different kinds of needs & they do

• Inherent motives are those which arise from the basic

• Emotional motives - purchaser needs little

• Emotional buying motives are dominated by

• Emotional purchases are generally of the

DEPARTMENT OF MANAGEMENT STUDIES

Understanding the Research framework

Copyright © 2006 Pearson Education Canada Inc. 1-2

The behaviour that consumers

The individual who buys goods

Copyright © 2006 Pearson Education Canada Inc. 1-6

 Assumes that consumers will buy the

 Assumes that consumers are unlikely

 Assumes that to be successful, a

Copyright © 2006 Pearson Education Canada Inc. 1-10

Copyright © 2006 Pearson Education Canada Inc. 1-11

 Communicating the benefits of

Copyright © 2006 Pearson Education Canada Inc. 1-13

Copyright © 2006 Pearson Education Canada Inc. 1-14

Copyright © 2006 Pearson Education Canada Inc. 1-17

 Understanding consumer behaviour

Copyright © 2006 Pearson Education Canada Inc. 1-20

 Knowledge of consumer behaviour is

Copyright © 2006 Pearson Education Canada Inc. 1-21

Copyright © 2006 Pearson Education Canada Inc. 1-23

Copyright © 2006 Pearson Education Canada Inc. 1-25

Identifiable Group with in a

Eg. Washing detergents hard & gentle washes . Surf

Ex. – Spiderman 3 was released in 5 different language in India

Ex.- Mcdonalds globally, sell burgers aimed at local

Gender segmentation is commonly used within the

In the UK we have also seen the introduction of Maxim,

Segmentation Strategy Tactics

Strategy Offering Marketing Tactics

demographic - based upon age, gender and income level

benefits - based on the different expectation that

The reason why we study geographic segmentation is

Additionally, WHERE people live in a city is also a

This helps people plan store locations and the location

Demographic Segmentation is the most common

• Segmenting by the “stages in the family life cycle”

• There are different buying characteristics of people

HUL soaps - Dove for high end, Hamam

“The use of psychological attributes,

Psychographic profiles on a target market segment are

AIO - activities, interests, and opinions

On the basis of occasions, product usage, benefits

Factors Affecting Consumer Behavior

Roles and Status

Age and Family Life Cycle