Module 3: Consumer Behaviour

Consumer behavior refers to the process through which individuals and households make
decisions regarding the purchase of goods and services for personal consumption. This
process involves various factors, both internal and external, that influence consumers'
perceptions, motivations, attitudes, and ultimately, their buying decisions.

In India, a pertinent example of consumer behavior can be observed in the smartphone

market. Companies like Xiaomi, a leading smartphone brand in India, have successfully
tapped into consumer behavior by understanding the market dynamics and aligning their
product offerings with consumer preferences. Xiaomi's strategy of offering high-quality
smartphones at competitive prices resonates well with Indian consumers who prioritize value
for money. By leveraging insights into consumer behavior, Xiaomi has managed to establish a
strong presence in the Indian smartphone market and garner a loyal customer base.

An initiator is a member of the buying organization who first recognizes the need for a
product or service and initiates the buying process.
Example: Larsen & Toubro (L&T), one of India's largest construction companies, often
relies on project managers to initiate the purchase process for heavy machinery and
equipment needed for various construction projects.

Gatekeeper:

A gatekeeper is an individual within the buying organization who controls the flow of
information to others involved in the buying decision. They can influence which vendors
or suppliers have access to decision-makers and users.
Example: In an Indian pharmaceutical company, the procurement manager acts as a
gatekeeper by filtering out irrelevant information from sales representatives and
ensuring that only relevant product information reaches the medical professionals who
influence the purchasing decision.

Influencer:

An influencer is a person or group within the buying organization who provides

information and influences the buying decision by helping define specifications and
evaluating alternatives.
Example: In an Indian IT firm, technical experts and engineers play a significant role as
influencers when purchasing software solutions. Their expertise and insights into
technical requirements and compatibility heavily influence the final decision.

Decider:
 The decider is a member of the buying organization with formal or informal power to
select or approve the final suppliers. They have the authority to make the ultimate
decision regarding the purchase.
Example: In an Indian manufacturing company, the CEO or the head of procurement
often serves as the decider for major capital equipment purchases. Their approval is
crucial before finalizing deals with suppliers.

Buyer:

The buyer is responsible for making the actual purchase on behalf of the organization.
They negotiate terms, select vendors, and arrange the purchase.
Example: In an Indian retail chain, the procurement manager acts as the buyer when
sourcing products from suppliers. They negotiate prices, place orders, and ensure timely
delivery of goods to the stores.

User:

Users are members of the buying organization who will actually use the purchased
product or service in their day-to-day operations.
Example: In an Indian software development company, software engineers and
developers are the primary users of software tools and platforms purchased by the
organization. Their feedback and satisfaction with the usability of the software influence
future purchasing decisions.

Factors influencing buyer behavior

1) Cultural Factors

1. Culture: Culture significantly influences consumer behavior as it shapes individuals'

values, perceptions, and behaviors. In India, cultural factors such as religious festivals
like Diwali or Eid often lead to increased consumer spending on items like clothing, gifts,
and sweets. For example, during Diwali, people purchase new clothes, home decorations,
and gifts for their loved ones, reflecting the cultural importance of celebrating the
festival of lights.
2. Subculture: Subcultures within India, such as regional identities (e.g., North Indian, South
Indian), religious communities (e.g., Hindus, Muslims, Sikhs), or ethnic groups (e.g.,
Gujaratis, Punjabis, Tamils), have distinct values and preferences that influence consumer
behavior. For instance, companies like Titan Industries tailor their marketing strategies to
cater to specific subcultures within India. Titan's 'Tanishq' brand offers jewelry designs
and collections tailored to different cultural preferences, appealing to diverse consumer
segments across the country.
3. Social Class: Social class plays a significant role in shaping consumer behavior in India,
where individuals from different socioeconomic backgrounds exhibit distinct buying
patterns. For example, luxury car brands like Mercedes-Benz target affluent consumers
 belonging to the upper class, emphasizing prestige, status, and exclusivity in their
marketing campaigns. Conversely, value-oriented brands like Tata Nano have been
positioned to appeal to lower-income consumers, focusing on affordability and
practicality.

2) Social Factors

1. Groups and Social Networks:

a. Reference Groups: In India, Bollywood celebrities serve as aspirational reference
groups, influencing consumer choices in fashion, lifestyle, and brand preferences. For
instance, endorsements by popular actors like Shah Rukh Khan or Deepika Padukone
significantly impact consumer perceptions and preferences for products they
endorse, such as clothing brands or cosmetics.
b. Word-of-Mouth Influence: Personal recommendations from friends, family, and social
networks hold substantial sway over consumer decisions in India. When seeking
advice on restaurants, travel destinations, or electronics, Indians often rely on word-
of-mouth endorsements from their social circles, driving consumer interest and brand
preference.
2. Family:
a. Family plays a pivotal role in consumer decision-making in India, especially during
festive seasons like Diwali or weddings. Collective family decisions influence
purchases such as jewelry, clothing, gifts, and household appliances. For instance,
during Diwali, families collectively decide on purchases for home decorations, sweets,
and festive attire.
b. Children also wield influence over family buying decisions in India. Advertisers target
children directly or indirectly through ads featuring toys, snacks, and educational
materials. Children's preferences influence purchases like snacks, toys, and school
supplies, prompting parents to buy products endorsed by their children's favorite
cartoon characters or brands.
3. Roles and Status:
a. Social status significantly impacts buying behavior in India, with individuals often
choosing products that reflect their perceived status within society. For example,
professionals may prioritize premium brands of clothing, gadgets, and automobiles to
signify their success.
b. Individuals adjust their purchasing behavior based on the roles they fulfill in different
contexts. For instance, responsible family members prioritize purchases catering to
family needs, such as health supplements or household appliances. At social events,
individuals choose products and attire that enhance their social status, such as luxury
clothing brands or accessories.

3) Personal Factors

1. Age and Life-Cycle Stage:

a. In India, age and life-cycle stage significantly influence consumer behavior. For
example, young professionals in their 20s and 30s might prefer trendy and affordable
 clothing brands like FabIndia or H&M, reflecting their dynamic lifestyles and evolving
tastes.
b. Families going through life-cycle transitions, such as marriage or parenthood, often
prioritize purchases differently. For instance, new parents may invest in baby care
products from companies like Johnson & Johnson or Himalaya Herbals, catering to
their specific life-stage needs.
2. Occupation:
a. Occupation plays a crucial role in determining consumer preferences and buying
patterns in India. For instance, professionals working in corporate settings may prefer
premium laptop brands like Dell or HP for their reliability and performance, aligning
with their professional needs.
b. Blue-collar workers, such as construction workers or factory employees, might
prioritize durable workwear from brands like Allen Solly or Peter England, emphasizing
functionality and ruggedness required for their jobs.
3. Economic Situation:
a. India's diverse economic landscape influences consumer behavior across various
income segments. During economic downturns, consumers may opt for value-
oriented brands like Tata Swach for affordable and reliable water purifiers or Patanjali
for budget-friendly personal care products, reflecting their need to economize.
b. Conversely, affluent consumers may indulge in luxury brands like Tanishq for exquisite
jewelry or Audi for premium automobiles, demonstrating their ability and willingness
to spend on high-end products.
4. Lifestyle:
a. Lifestyle choices vary widely among Indian consumers based on factors such as
culture, subculture, and personal preferences. For example, fitness enthusiasts might
gravitate towards activewear brands like Decathlon or Adidas, aligning with their
active lifestyles and health-conscious attitudes.
b. Traditional Indian families may prefer ethnic wear brands like FabIndia or Manyavar
for cultural events and celebrations, reflecting their attachment to heritage and
tradition.
5. Personality and Self-Concept:
a. Personalities and self-concepts influence consumer choices in India. For instance,
individuals with adventurous personalities might opt for rugged SUVs like Mahindra
Scorpio or Royal Enfield motorcycles, resonating with their bold and adventurous self-
image.
b. Conversely, individuals with sophisticated self-concepts may prefer luxury fashion
brands like Louis Philippe or Sabyasachi for clothing and accessories, reflecting their
 desire for elegance and refinement.

Psychological
1. Motivation:
a. Indian consumers' motivations drive their purchasing decisions. For instance, a person
may buy a luxury car like a Mercedes-Benz to fulfill the need for esteem and
recognition in society, mirroring Freud's theory. Companies like Titan Watches
capitalize on this by promoting their products as symbols of success and social status,
appealing to consumers' subconscious desires for admiration.
2. Perception:
a. Perception plays a crucial role in how Indian consumers interpret and respond to
marketing stimuli. For example, selective attention influences which advertisements
they notice amidst the overwhelming digital clutter. Brands like Amul leverage
memorable and humorous advertising campaigns to capture consumers' attention
and stand out in a crowded market.
3. Learning:
a. Learning influences Indian consumers' brand preferences and purchase behaviors.
Companies like Cadbury effectively use reinforcement techniques by consistently
delivering high-quality products and positive brand experiences. This reinforces
consumer loyalty and increases the likelihood of repeat purchases.
4. Beliefs and Attitudes:
a. Indian consumers' beliefs and attitudes shape their perceptions of products and
brands. For instance, the Vidalia Onion Committee successfully changed children's
attitudes towards onions by associating them with the beloved character Shrek.
Similarly, companies like Parle-G leverage nostalgia and trust to maintain strong brand
loyalty among Indian consumers, who associate the brand with childhood memories
and reliability.

The buyer decision process outlines the steps consumers go through when making
purchasing decisions. It consists of five stages: need recognition, information search,
evaluation of alternatives, the purchase decision, and post-purchase behavior. These stages
are crucial for marketers to understand as they influence consumers' buying behaviors and
ultimately affect their brand choices and loyalty.

Example: Maruti Suzuki

1. Need Recognition:
a. Maruti Suzuki, a leading automobile manufacturer in India, understands that need
recognition can be triggered by both internal and external stimuli. For instance, an
 individual might realize the need for a new car due to internal factors like a desire for
convenience or external factors like advertisements showcasing the latest car models.
2. Information Search:
a. Once the need for a car is recognized, consumers typically engage in an information
search process. Maruti Suzuki recognizes the importance of providing comprehensive
information about its cars through various channels such as their website, dealership
networks, and advertising campaigns. By offering detailed specifications, reviews, and
comparisons with competitor brands, Maruti Suzuki helps consumers make informed
decisions.
3. Evaluation of Alternatives:
a. Maruti Suzuki understands that consumers evaluate alternative car brands based on
various attributes such as price, style, fuel efficiency, and brand reputation. To
influence consumers' evaluations, Maruti Suzuki emphasizes factors like affordability,
reliability, and fuel efficiency in its marketing communications. For example,
comparing Maruti Suzuki's models with competitors' on these attributes helps
consumers see the brand's value proposition clearly.
4. Purchase Decision:
a. After evaluating alternatives, consumers make their purchase decision. Maruti Suzuki
aims to facilitate this process by offering attractive financing options, discounts, and
after-sales services. By ensuring a seamless buying experience, Maruti Suzuki
increases the likelihood of consumers choosing their brand over competitors.
5. Post-purchase Behavior:
a. Maruti Suzuki recognizes the importance of post-purchase satisfaction in building
long-term customer relationships. Through efficient customer service, regular
feedback collection, and addressing customer grievances promptly, Maruti Suzuki
aims to minimize post-purchase cognitive dissonance and enhance customer loyalty.
Satisfied customers are more likely to recommend Maruti Suzuki to others, thereby
contributing to the company's growth and success.

In summary, Maruti Suzuki's understanding and effective management of the buyer decision
process contribute to its success in the highly competitive Indian automotive market. By
aligning its marketing strategies with each stage of the buying process, Maruti Suzuki ensures
that consumers perceive value in its brand and remain satisfied with their purchases.

Referred to Principles of Marketing

By Philip Kotler • Gary Armstrong