Consumer Behavior

An Introduction:
Consumer behavior is comparatively
new field of study. It is an attempt to
understand and predict human actions
in the buying role. It has assumed
growing importance under market
oriented or consumer oriented
marketing planning and management.
Definition of Consumer behavior:
Consumer behavior can be defined as how
individual and group recognize and
determine their needs and how they purchase
and experience goods and services to meet
those needs. It includes the what–where–
why-when-and how they purchase and
experience process.
 Consumer is the king,
therefore a sound marketing
programme should start with
a careful analysis of the habit,
attitudes, motives and needs
of consumers.
In this subject we will study
the purchase behavior of the
consumer and the factors
that can influence it.
Stages in Marketing:

Since the study of consumer

behavior is always propelled by
the needs of marketing, it is
essential to see how the needs of
marketing develop and evolve
with reference to a particular
product.
In the initial stage when goods
or services are introduced for
the first time by the marketer,
the consumer has only a basic
choice whether to go for
purchase or not.
In the next stage when
competition occurs, choices are
introduced for the consumer
who can select and decide as to
which of the competing product
should be bought.
In the subsequent stage, marketers of
products serving the same end product
keenly watch.
The products appear identical and it may
seem that there is little to choose.
However at this stage another
phenomenon takes place in the shape
of diversity.
 The consumer exercises all
the choices-namely, What to
buy, Where to buy, Who to
buy from, how to buy, how
much to buy, how to use.
 Basically in the study of consumer
behavior a marketer should find answer
to the following questions:
What are the product consumer buy?
Why they buy them?
How they buy them?
When they buy them?
Where they buy them?
How often they buy them?
It must be noted that the behavior is
likely to show variation from individual
to individual. From product to product
and from individual of one region to an
individual of another region.
Thus buying behavior is the decision
process and acts of people involved in
buying and using products.
Why there is a need for
understanding consumer behavior:
In a number of cases it has been
proved that the better the firm
understands its consumers, the more
likely it becomes successful in the
market place.
Few reasons are as under--
1. Consumer do not always act or react as
the theory would suggest.
2.Consumer preferences are changing
and becoming highly diversified.
3. Consumer dislike using identical
product and prefer differentiated
product.
4. Meeting of special needs of
consumers require market
segmentation.
5. Rapid introduction of new product
with technological advancement has
made the job of studying consumer
behavior more imperative.
6. Consumer behavior can be used to sell
products that might not sell easily
because some other product has been
satisfying the customer.
7. Implementing the marketing concepts
calls for studying the consumer behavior.
The shift in the age from selling age to
marketing age meant that customer’s
need be given priority over the hard sell
tactics.
It is realized that customer would
buy only those products which
satisfied his needs and wants. Thus
identification of target market before
production become essential to
deliver the desired customer
satisfaction.
Consumer behavior and marketing:

Marketing and consumer behavior

both are so closely related that the
study of consumer behavior can be
said to be the first step in refined
marketing.
Marketing, over a period of time has seen
several phases or approaches. The earlier
styles like production oriented approach
have proved to be inadequate.
This has led to the current consumer –
oriented approach which is closer to ideal
marketing. Since there can be no consumer
–oriented approach without a study of
consumer behavior, it makes the consumer
behavior science really important.
Consumer behavior –helps to

Consumer behavior is a science that serves not

only the marketer but also a variety of others--
1. Marketers: The marketers , as already
explained, depends heavily on the study of
consumer behavior for achieving the objectives
of marketing.
2. Entrepreneur: The entrepreneur who is
essentially a future marketer, is helped to take
correct and timely investment decisions and
improve the chances of success by a study of
consumer behavior.
3. Economist: The economist and
planner takes note of consumer
behavior forecasts while planning for
communities and countries and while
making cost– benefit projections.
4. Consumer: It is the consumer who benefits
most by the science of consumer behavior.
Firstly, they can get an insight and
understanding of the rationale behind their
own behaviors. Once this behavior is
understood, any wrong attitudes,
misconceptions or illogical loyalties can be
scientifically viewed and corrected.
Consumer become more value-oriented and
emerge as wise users, after an exposure to the
science of consumer behavior.
 Family
as a unit has always been given
Family – Definition

recognition in demographics and economics.

A simple definition of family will be that it is
two or more person living together usually
related to by blood, marriage or adoption. For
the purpose of our consumer behavior study,
the emphasis is on the aspect of living
together rather than being related. Therefore,
all households where persons live together are
treated as families.
Three stages of family:
Most experts in the west, view family as
having three distinct stages:
1. The elemental family- comprising two
persons, usually a married couple.
2. The nuclear family – comprising a married
couple and one or more children.
3. The extended family – includes one or two
grand parents or other permanent live-in
members.
Influence of Family:
Most consumer belongs to a
family group. The family can exert
considerable influence in shaping
the pattern of consumption and
indicating the decision making
roles. Personal values, attitudes
and buying habits have been
shaped by family influences.
 You can notice the brands used by a
new housewife in her kitchen are
similar to those favored by her mother.
The members of the family play
different roles such as influencer,
decider, purchaser, and user in the
buying process. The house wife
may act as a mediator of products
that satisfy wants and desires of
the children.
Marketer is interested in four
questions relating to family
purchases: 1. Who influences
buying? 2. Who does the family
buying? 3. Who takes the buying
decision? And 4. Who uses the
product.
Groups
Very few people in this world live or work
entirely alone. At the place of residence or at
the place of work, while in transit or while
relaxing, the individual is within the reach of
other persons.
Most of the time different people
are compelled or happen to be
together as a group. It is also true
that certain daily functions of life
and work cannot take place in
isolation and require joint efforts of
two or more individuals.
All these factors lead to formation
of groups. In groups so formed,
certain amount of interaction
happens naturally. The interaction
may be physical, verbal or just
visual but this interaction always
leads to mutual influence.
Definition of group
A group can be defined as
two or more person that
come together to accomplish
individual or common tasks
and goals.
 To understand this broad
definition one has only to see
that even persons who travel
together do constitute a
group.
Reference Groups
An individual is constantly and
subconsciously reviewing
important decisions of his own
and comparing these with the
decisions taken by others,
especially persons whom he
admires.
This type of behavior is more
evident for purchase decisions
where high value or recurring
purchases are involved.
 Usually, the individual has a set of
people in mind that he generally
admires or at least accepts. They
become a sort of reference group
though the individual may not be
physically a member of this group.
For that matter the reference
group need not have a
membership or a definite
boundary. It exists more in the
minds of people.
Influence of the group on the individual member:
An individual is likely to be a member
of several groups. For example, one can
be a member of a family (which itself is
a group), a circle of friends, a workplace
group, a union or association, a
religious order or an interest group all
at the same time.
What happens in each group has
influence on the individual. A good
deal of these influences are
reflected in the consumption and
purchase behavior of the
individual.
For the individual , the group serves as
a source of information, a referral body
and on occasions as a tool to get
collective bargaining power. The
average individual looks for some
advice and support from the group and
feels obliged not to go against these.
Therefore it is easy to see why the study
of groups and their influence is
important to the marketer.
Culture
Culture is an aggregate of the learned
beliefs, attitudes, values, norms and
customs of a society or group of people,
shared by them and transmitted from
generation to generation within that
society.
Culture too changes with
time. The society that
developed the culture is
continuously being exposed
to new experiences.
Further, the society or group is not a fixed
body of people. New generations are being
brought into it and some new members
from other cultures are being assimilated.
With the increased mobility of persons, flow
of information and young persons joining
the group, cultures expand, dilute, subdivide
and change.
Influence of culture on consumer behavior:
As culture refers to the social heritage of the
society. It encompasses the social values,
attitudes towards work, language, belief, art,
moral, law, customs, traditions , other
capability and habits acquired by a man as a
member of the society.
Culture is one of the most important
dimensions of consumer behavior. It is
pervasive in all marketing activities, the
product design, packaging, pricing,
promotion, distribution, communication
etc. These cultural influences can provide an
important basis for market segmentation,
product development, advertising etc.
For example gujaratis, Maharashtrians,
Tamilians and the U.P. Brahamins have
diverse cultures and need different products
for their worship and even the type of
utensils used and the clothing worn by
them.
Culture is prescriptive and decides the
consumptions habits, eating's habits, food
preferences and food preparation. For
example Indians do not eat beef because cow
is religiously revered by Hindus. It is also
considered improper to eat cow which
supplies milk and helps in farming. However,
Japanese, Americans, and people from
Argentina consume beef in large quantities.
Sub Culture
A sub-culture is an identifiable and distinct
group that has unique characteristics. The
sub-culture exists with in large society. A
sub-culture is a psychological religious,
social or geographical source of group
identification. Thus a person living in
Calcutta would feel that he is different from
the one living in Bihar.
The subculture makes it possible
for a person to understand another
culture with reference to his own
sub-culture. These subcultures are
used by companies as a basis of
segmentation.
Role and Status
An individual has many roles to
play. A man is father of his
daughter, husband of his wife, son
of his parents, brother of his
sisters, manager of work place, and
good citizen.
The type of status one can have in
the society depends upon the
relative position at home, work and
society. For example, a professor’s
status is higher than a students, a
judge’s status is higher than a
lawyer and so on.
Roles and statuses play an important
role for marketers. Products must be
prepared not only as per the customer’s
requirements.
Thus the role and status of a
supreme court judge would take
him to a place where he can get
products of his choice. He is not
expected to be seen in a street
corner to buy the daily
requirements.
Personal factors

The personal factors of an

individual such as occupation,
income, life style etc are
important determinants of an
individual buying decision.
The income level determines
the expenditure of a person.
Life-style reflects the manner in
which a person lives and spends
time and money.
It is a behavioral concepts that
will enable a marketer to
understand and predict a
buyer’s behavior. This concepts
is also used for market
segmentation to develop an
effective marketing strategy.
Age and life-cycle stage
A person’s age is important
decider of the needs. Small
children require milk powder,
baby foods, toys, games, soft
drinks and educational
facilities.
Young adults require trendy
clothes, recreational facilities,
transportation etc.
Consumption behavior is also
influenced by the specific stages
of family life-cycle.
Occupation
The occupation of a person
decides the consumption
pattern. For example, a teacher
would buy simple clothes,
means of communication,
books, pencils, computers,
papers etc.
While a company executive
would buy expensive clothes,
visit by air, get membership
of resorts and club etc. It is
duty of the marketers to
identify such groups and
target them.
Economic Condition:
Marketers target customer
needs that can be converted in
to wants and demands. Income,
saving , assets, borrowing power
etc. decides the economic
capacity of the customer to buy
a products.
Thus marketers use trends
and patterns in the income ,
saving and overall economic
condition of the citizens to
assess their capacity to buy
the products.
Life Style
It has been observed that
customers coming from
different-cultures, social
classes, occupation’s etc. bear
different life styles.
Life styles are identified by
taking various activities,
interests, opinions and
demographics (AIOD) in to
account as listed below:
A – Activities: Work,
Hobbies, Social events,
Vacations, Entertainment
Clubs, community, Shopping,
sports.
I- Interests: Recreation,
fashion, food, media,
community, job, home,
family.
Opinion: themselves, Social
issues, politics, Business,
economics, educations,
products, future and culture.
D- Demographics: Age,
education, income,
occupation, family size, city
size, and stage in life cycles.
The marketer should look at
the AIOD frame work for
analyzing and looking at the
marketing opportunities
emerging out of it.