CONSUMER BEHAVIOR

Consumer behavior is the study of how

individuals, groups, and organizations select,
buy, use, and dispose of goods, services, ideas,
or experiences to satisfy their needs and wants.

What Influences Consumer Behavior?

Cultural Factors

Social Factors

Personal Factors
 Culture
Culture is the fundamental determinant of a
person’s wants and behaviors acquired
through socialization processes with family
and other key institutions.
Subcultures : more specific
 Nationalities
 Religions
 Racial groups
 Geographic regions

Social Classes – A1, A2, B1, B2, C, D, E

 Social Factors

Reference Group – direct or indirect influence

Membership groups - Primary / Secondary

Primary – pressures for conformity, behavior, lifestyle,
attitude, self concept etc.

 Aspirational groups
 Disassociative groups
 Family
 Family of orientation: parents and siblings
Religion, politics, economics, ambition, self-worth etc.

 Family of procreation: spouse and children

 Social Roles : activities a person is expected to

perform

 Status: each role carries a status

 Personal Factors
 Age
 Life cycle stage
 Occupation
 Wealth
 Personality : set of distinguishing human psychological traits
that lead to relatively consistent and enduring responses to
environmental stimuli. Consumers match brand personality to
theirs.

Aaker researched Brand Personalities and identified the following

1. Sincerity (Down-to-earth, honest, wholesome, cheerful)
2. Excitement (daring, spirited, imaginative, up-to-date)
3. Competence (reliable, intelligent, successful)
4. Sophistication (Upper-class and charming)
5. Ruggedness (outdoorsy and tough)
Levi’s : Ruggedness
MTV : Excitement
CNN : Competence

Consumers choose brand personality consistent with

their actual self-concept, or the match may be with ideal
self-concept, or on others self-concept.

 Lifestyle : Pattern of living in the world. AIO

Eg. People will either be time constrained or money

constrained. So marketer will develop offerings which
address either of these – Lower costing or time-saving.

Values: much deeper and influence choices and desires.

 Model of
Consumer Behavior
 Motivation

Freud’s Herzberg’s
Maslow’s
Theory Hierarchy Two-Factor
of Needs Theory
Behavior
is guided Behavior Behavior is
by is driven by guided by
lowest, motivating
subconscio
unmet need and hygiene
us
factors
motivations
Maslow’s Hierarchy
 Perception & Learning
 Selective attention
 Selective retention
 Selective distortion
 Subliminal perception

LEARNING: Induces changes in behavior arising from

experience.
 Drive: A strong internal stimulus impelling action
 Cue: Minor stimuli that determine when, where, and how
a person responds
 Discrimination: Learning to recognize differences in sets
of similar stimuli and adjusting our responses accordingly
 Buying Roles
 Initiator
 Influencer
 Decider
 Buyer
 User

Eg.: Baby Food, Razor Blades, Car, Marriage!!

 Story – Simran’s dilemma

 Simran wanted to present a MP3 player to her friend

Rahul on his 18th birthday . She was standing in the
Chroma showroom but could not decide which
model ,as she lacked the understanding of functions
and features of MP3 . Last year Simran could not
forget that Rahul had dumped the camera gifted by
her for poor features but this time she did not want
to repeat the mistake .

 Thedecision of product category was simple becoz

Rahul has recently lost his mp3 player but what
model should she go was an issue
 Shesearched the internet and decided on Philips which was
affordable at Rs 4000 as well as small in size which Rahul
preferred . It had higher user ratings and positive testimonies in
popular magazine . But unfortunately this model was not
available at Chroma . Yet she went to fetch some similar models .

 She saw range of models on shelf but was more confused. She
spoke to her friend who advised her to buy Apple ipod shuffle
which was for Rs 3900 and it offered multitude of features that
would be ideal and suitable for high profile Rahul
 Just then a salesman approached her and recommended Sony

which is of Rs 3000 . “I have been in this business for long and I

know it is the best performer in the small category .” But my
friend suggested Apple ipod , said Simran . No way it has less
features, poor service and old model, said the salesman . Simran
left the store saying , “thanks I will think about a little more
 Simran was terribly confused . On one side she had an
sales expert’s advise for Sony while on the other Apple
looked aesthetically more sound. Her gut feeling told her
to purchase Apple. Further, Sony was only available in
one color which was black , whereas apple came in blue
Rahul’s favorite color.
However salesman words rang a bell. He could be lying to
gain commission .Simran worried about getting the gift
dumped like last year . She did not want the product to
breakdown and risk her friend to being dissatisfied with
the product.
Sony was cheaper and it had more features than Apple.
Besides she cannot afford to ignore expert’s advise. She
was confused and did not know what to buy. However
she was in a hurry to buy because the birthday was
tomorrow and she had to plan birthday party as well .
Let us look at what is happening ---

ACT 1
Need Recognition – MP3 Player
ACT 2
Information Search
ACT 3
Evaluation of Alternatives
Consumer Buying
Process
Problem Recognition

Information Search
Active Info Search Heightened Attention
Sources : Personal , commercial, public, experential

Evaluation of alternatives

Purchase Decision

Postpurchase Behavior
Sources of Information

Personal Commercial

Public Experiential
Evaluation of
alternatives
This involves using two
type of information:

 List of brands
 Criteria /attributes
to evaluate brands
Successive Sets in Decision
Making
 Expectancy Value Model
Belief : Descriptive thought about something
Attitude : enduring +/- evaluations, feelings and
action tendencies. It leads to liking / disliking

Consumer arrives at a particular brand by

evaluation of attributes by combining beliefs
according to importance (weights attached)
Eg: Purchase of a car
Preliminary steps to Expectancy
Value Model
 Judging the relevant attributes influencing the choice

 Seeking the level of importance each attribute has in

the mind of the consumer

 Rating each attribute on their belief for the

competing brand

 Determining the final score of attitudinal preference

for different choices
 Applying model on selection of
college on
Attribute (i)
various
Importance
(E)
B-School
parameters
Sciencecollege Arts college Law school

Beliefs ( B)
Acad reputation 6 8 9 6 3
Course curriculum 7 9 3 3 3
Placement 4 4 2 6 9
Cost 3 2 2 6 9
Athletics 1 1 2 5 1
Proximity 4 1 3 7 9
Infrastructure 5 7 9 7 2
Attitude Score 173 148 167 149
(Ao)

Scales :
Importance: 1 = unimportant ; 7= very important
Beliefs: 1= very dissatisfactory ; 10= very satisfactory-
 Attitudes can be changed by redefining
the parameters
 Capitalize on relative advantage
Attribute (i) (E) B-School Arts college
 ( higher B) Acad reputation 6 8 6
 Eg. Increasing industrial interfacing to Course 7 9 3
improve placement opportunities Placement 4 4 6
Cost 3 2 6
Athletics 1 1 5
 Strengthen / lower importance of attribute Proximity 4 1 7
 ( higher value of E) Infrastructure 5 7 7
 Eg: emphasizing hostel facility to
lowering the importance of proximity

173 167
 Add a new attribute
 ( increase number of i ’s )
 Eg . Adding a foreign exchange study for
3 months

 Influence competitors’ ratings

 ( increase the gap in Ao of brands )
Eg. Comparative pricing
 Act IV

Simran was terribly confused .

What must be her purchase

decision ???
 Purchase decision
 Compensatory Decision Rules: High ratings on one or more attributes can make up
for low ratings on one or more attributes. The brand that has the highest overall
rating is chosen.

 Noncompensatory Decision Rules: High ratings on some attributes may not

compensate for low ratings on other attributes. These rules are shortcuts to
achieving a decision.

 minimum cutoff on all important attributes

 setting cutoff differently for different attribute
 choose the brand rated highest on the most important attribute

 Heuristics: Sometimes consumers use mental short cuts to speed the decision
making process. Some heuristics are
Price-Quality Relationship
Buy Brands that You Know
Ethnocentrisms preference for foreign products over own country’s product
Non – compensatory model
Heuristics : a mental shortcut that allows people to solve
problems and make judgments quickly and efficiently. These rule-
of-thumb strategies shorten decision-making time and allow
people to function without constantly stopping to think.

Eg: Selecting a known brand Vs. unbranded

Eg.: Blind tests

Steps Between Alternative Evaluation
and Purchase
 Perceived Risk
 Functional risk – Products’ performance
 Physical Risk – Threat to physical well being of
user
 Financial Risk – Not worth the price
 Social risk – Embarrassing
 Psychological Risk – Affects the mental well
being of the user
 Time Risk – Failure results in opportunity cost
of finding another satisfactory product.
 Post Purchase Behavior
 PP satisfaction : Depends on expectation vs.
perceived performance.

 PP action : repeat purchase and good WOM

Stop purchase and may talk bad
Returns and redressals

 PP Use and Disposal

LEVEL OF CONSUMER INVOLVEMENT
ELABORATION LIKELIHOOD MODEL

It describes how consumers make evaluations of High

and low involvement
 Central Route – Attitude formation is based on diligent

rational consideration.
 Peripheral route- Attitude formation or change

provokes much less thought. Experience with brand

leads to positive or negative associations.

Consumers follow central route only if they have sufficient

motivation, ability and opportunity, else they consider
extrinsic factors in their decision making
Level of Consumer Involvement

HIGH LOW

-Large Ticket item - Lower Priced

-Risk involved with wrong purchase - Routine Purchase
-bought infrequently - Low risk
-Highly self expressive
Involvement in consumption of
activity

Involvement

How much effort is

How relevant it
a person ready to
is for a person spend
How is the Product 1- Five Product 2-
buying different star Tanishq
for these two jewellery
products?
 Low Involvement High Involvement
Product category Product category

1. Recognizes Problem Need recognition

Search for information

2. Search and Evaluation
takes place at the same time Evaluation of alternatives

Purchase
3. Purchase and acquisition

Post purchase evaluation

Less time and effort – therefore

Low involvement product
Greater time and effort in search
– therefore high involvement
product
 Levels of Consumer Involvement
Stage Low High
involvement Involvement
Need recognition / Minor Major personally
problem awareness important

Information search Limited search Extensive search

Evaluation of Few Alternatives on Many Alternatives
alternatives & purchase few choice criteria with many choice
criteria

Post purchase Limited evaluation Extensive with

evaluation of the media search
decision
Involvement is dependent on buying
situations
 Four Types of BB

High Involvement Low involvement

Significant differences Complex BB Variety-seeking BB

between brand

Dissonance Habitual BB
Few differences Reducing BB
 Profiling Customer Buying
-Decision process
 Introspective Method – Think How they would
buy the product
 Retrospective Method – Ask consumers to
recall how they bought.
 Prospective Method – locate consumers who
plan to buy and ask them to think aloud.
 Prescriptive Method – ask consumers to think
the ideal way to buying a product.