CONSUMER BEHAVIOR

AN
INTRODUCTION
The purpose of a business is to
create a customer.
Peter Drucker

The purpose of business is to

create and keep a customer.
Peter Drucker
 In the factory we make cosmetics; in the
drugstore we sell hope.
- Charles Revson

 No theater could sanely flourish until there

was an umbilical connection between what
was happening on the stage and what was
happening in the world.
- Kenneth Tynan
Consumer Behavior
 What products do consumers buy?

 What Brand do they buy?

 Why do they buy it?

 Where do they buy?

 How often do they buy it?

Consumer Behavior - Definitions
 Process a person goes thru when purchasing
and using products and services, including the
mental and social processes that precede and
follow these actions.
 It not only involves specific actions taken by
individuals when buying and using products
and services, ----
 but also all the social and psychological factors
that affect the same.
Consumer Behavior - Definitions
 American Marketing Associations (AMA)
 Consumer behavior is the dynamic interactions
between affect and cognition, behavior and the
environment by which human beings conduct
the exchange aspects of their lives.

 CB is Dynamic
 Involves interactions
 Its about Exchanges.
 Consumer Behavior Is Dynamic
 Because the thinking, feelings and actions of
individual consumers, targeted consumer groups
and society at large are constantly changing.
 Consumers and their environments are
constantly changing.
 Internet has changed the way people search for
information, products and services.
 PLC’s have shortened.
 Companies will have to constantly innovate.
C B Involves Interactions
 Interactions among people’s thinking, feelings
and actions and the environment.
 Thus marketers need to understand what
products and services mean to customers,
 what consumers do to purchase them & use
them and what influences, shopping, purchase
and consumption.
 Knowledge about how these interactions
individuals / target markets will help marketers
to better satisfy them.
 CB involves Exchanges
 People give up something of value to others and
receive something in return.
 Mostly involves people giving up something of
value to obtain products and services.
 This is the exchange between buyers and
sellers.
 Role of marketing in society is to help create
exchanges between buyers (consumers) and
sellers (marketers).
 Response
S&D
Hierarchy Model Page:463
Kotlar
page 63
Different AIDA Hierarchy of Innovation – Communications
Stages Model Effects Model Adoption model Model
Awareness Exposure
Cognitive Attention Reception
Knowledge Awareness
Stage
Cognitive response
Interest Liking Interest
Affective Attitude
Stage
Intention
Desire Preference Evaluation

Trial
Behavior Behavior
Action Purchase
Stage
Adoption
 Approaches To Study Of Consumer Behavior

APPROACHES DOMAINS OBJECTIVES PRIMARY METHODS

Understanding Depth Interviews

Interpretative Anthropology consumption and
its meaning Focus Groups

Psychology Explain consumer

Traditional Experiments
decision making
Sociology
behavior Surveys

Marketing Economics Math modeling

Predict Consumer
(as a) Science Statistics choice & behavior Simulation
Factors Influencing C.B. Page: 145
Kotlar

Cultural Social
Culture Reference Groups
Sub Culture Family
Social Class Role & Status

Psychological Personal
Motivation Age & Life Cycle Stage
Learning Occupation
Buyer Life Style
Perception Personality & self concept
Attitudes Economic Circumstances
 TYPES OF BUYING BEHAVIOR

Low Buyer Involvement High

Few
Habitual Buying Dissonance
Behavior Reducing Buying
Behavior
Significant
Differences
Between Brands
Variety seeking Complex Buying
Buying Behavior Behavior

Many
 Stimulus-Response Model of Buyer Behavior
External Stimuli The Buyer’s Black Box
Environmental Marketing Buyer Buyer Decision
factors factors Characteristics Process
Input Problem
Economic Product
Price recognition
Social Cultural
Political Advertising Information
Technological Distribution Social search
Personal Evaluation
Buy Decision Psychological Decision
Product Post Purchase
Brand Behavior
Output
Dealer
Quantity
Purchase Timing
OVERALL MODEL OF CONSUMER BEHAVIOUR

Experiences and Acquisitions

External Influences
Culture Decision process
Subculture
Demographics
Problem
Social Status
Recognition
Reference Groups
Family
Information
Marketing Activities Self-Concept Search
And
Needs
Lifestyle Desires Alternative Evaluation
Internal Influences
And Selection
Perception
Learning
Outlet Selection
Memory
And Purchase
Motives
Personality
Postpurchase
Emotions
Processes
Attitudes
Experiences and Acquisitions
 CONSUMER BEHAVIOR – FRAME WORK
Sub - culture

Culture Information
processing
Learning &
memory
Problem recognition Social
Motivation &
Information Search Class
Involvement
Evaluation

Buying Process
Personal
Influences
Post Buy Behavior.
Reference
Attitudes Personality & Groups
Self concept

Family
Consumer move from Total Set

Total Set

Awareness Set

Consideration
set

Choice
Set

Buying Decision
CONSUMER MARKETS
& 144
CONSUMER BEHAVIOR

Factors Influencing Buyer Behavior

&
Stages Of The Buying Decision Process
Consumer Behavior
 What products do consumers buy?

 What Brands do they buy?

 Why do they buy it?

 Where do they buy?

 How often do they buy it?

Consumer Behavior - Definitions
 Process a person goes thru when purchasing
and using products and services, including the
mental and social processes that precede and
follow these actions.
 It not only involves specific actions taken by
individuals when buying and using products
and services, ----
 but also all the social and psychological factors
that affect the same.
Consumer Behavior - Definitions
 American Marketing Associations (AMA)
 Consumer behavior is the dynamic interactions
between affect and cognition, behavior and the
environment by which human beings conduct
the exchange aspects of their lives.

 CB is Dynamic
 Involves interactions
 Its about Exchanges.
 Stimulus-Response Model of Buyer Behavior
External Stimuli The Buyer’s Black Box
Environmental Marketing Buyer Buyer Decision
factors factors Input Characteristics Process
Economic Product Cultural Problem
Social Price recognition
Political Advertising Information
Technological Distribution Social
search
Evaluation
Buy Decision Personal
Decision
Product Post Purchase
Brand Psychological Behavior
Output
Dealer
Quantity
Purchase Timing
 Factors Influencing C.B.
Personal

Age & Life

Social Psychological
Cultural Cycle Stage
Reference Motivation
Culture Occupation
Groups
Life Style Learning Buyer
Sub Culture Family
Personality & Perception
Social Class Role &
Self Concept
Social Status Attitudes
Economic
Circumstances
 Culture & Sub Culture (Cultural factors)
 Culture is the fundamental determinant of a
persons wants and behavior.
 Factors picked up from childhood – values,
beliefs from family, religion and educational
institution, society etc.
 Sub Culture: Provide more direct identification
and a strong socialization parameter.
 Include geographic groups, racial groups,
nationalities, religion.
Page: 145
Kotlar
 Cultural Factors - Social Class
 Social stratification exists in almost all societies.
 Earlier it used to take the rigid dimension of
caste system.
 But now it’s the more liberal socio-economic
class system.
 They are hierarchical and persons within the
same class tend to behave similarly.
 Upper class, middle class, working class, poor
 Occupation, Income & Education (determinants)
 Social Factors – Reference Groups
 Membership Groups
 Primary groups -informal group
 Secondary Groups- formal group
 Aspirational Groups – a person hope to join
 Dissociative Groups- a person rejects

 Opinion leader is the person is the one who

provide informal advice in the factors related to
buying
 Social Factors – Family and Role &
Status
 Family is the most important consumer buying
organization (most influential primary reference
group)
 Family of Orientation- parents and sibling
 Family of Procreation-one’s spouse, children
 Marketers are interested in roles and relative
influences played by husband, wife and
children in purchase decisions.
 Roles & Statuses
 Personal Factors
 Age & Stage in Life Cycle

 Occupation & Economic Circumstances

 Personality & self Concept

 Psychographics – Life style

 V.A.L.’s Segmentation
 Actualizers: successful, sophisticated, active and take
charge of people. Buys niche oriented products
 Fulfilleds: Mature, satisfied, comfortable, reflective – looks
for durability and functionality in products.
 Achievers: successful, career and work oriented – favor
established brands, seeks prestige products.
 Experiencers: Young, vital, enthusiastic, impulsive – high
spenders on clothing, fast food, music movies etc.
 Believers: Conservative, traditional - buys popular brands
 Strivers: Insecure, uncertain – favor stylish imitations
 Makers: Practical, self-sufficient – functional products, tools
 Strugglers: elderly, resigned, passsive
Psychological factors
 Motivation
 Freud’s Theory (ulterior motives)
 Maslow’s theory (need hierarchy)
 Herzbersg’s theory (satisfiers & dissatisfiers)
 Perception
 Selective attention, selective distortion & selective
retention – meaning making process.
 Learning (Classical conditioning and Operant
Learning)
 Beliefs & Attitudes
 TYPES OF BUYING BEHAVIOR

Low Buyer Involvement High

Few
Habitual Buying Dissonance
Behavior Reducing Buying
Behavior
Significant
Differences
Between Brands
Variety seeking Complex Buying
Buying Behavior Behavior

Many
Five Buying Roles
 Initiator: person suggesting the purchase of the
product.
 Influencer: The person whose views or advices
affect the buying decision.
 Decider (Payer): The person who decides on the
entire buying decision or aspects of it – what, when,
where and how to - buy
 Buyer: The person making the purchase.
 User: The person who actually uses the product
Consumer Move From Total Set
Towards Purchase

Total Set

Awareness Set

Consideration
set

Choice
Set

Buying Decision
 Evaluation Of Alternatives

Attitude of
Others

Alternative Purchase Purchase

Evaluation Intention Decision

Unanticipated
Situational
Factors
 Five Stages Of Consumer Buying Process

Post
Problem Information Alternative Purchase
Purchase
recognition search Evaluation Decision
Behavior

1. Problem recognition: stage when the need is recognized and the

trigger can be due to an internal or external stimuli.
2. Information search: Customer is likely to search for alternatives that
will solve his/her problem. – about Product categories ---- about product
attributes ----about different brand.
3. Evaluation Of Alternatives: Starts with basic need gratification. He
then evaluates certain product attributes that can maximize his benefits
(wants). Hence its more of a comparison of attributes/benefits.
Evaluation Of Alternatives

 Two factors affecting during this juncture are

 1. Attitude of others
 i) depends on the intensity of the negative
reactions from others
 ii) the motivation of the customer to listen to them

 2. Unanticipated Situational Factors

 These are typically unexpected factors such as
financial problems, price rises, losing job etc.
Purchase Decision
 Customer after attribute based evaluation would
have moved to the choice set / final buy.
 Five sub decisions prior to purchase intention –
 Brand decision
 Retailer / Vendor decision
 Quantity to be bought
 Timing – now or later
 Payment method – cash or credit (Credit
Card/EMI)
 Post Purchase Behavior
 Purchase satisfaction
 Based on the buyer’s expectations and his
perceived performance by the product.
 If its below expected levels, consumer will be
dissatisfied –
 Negative word of mouth
 No repeat buying
 Post purchase dissonance:
 Especially in case of high involvement product
purchase.
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