 The field of Consumer Behaviour is the study of individuals, groups,

or organizations and the processes they use to select, secure, use

and dispose of products, services, experiences, or ideas to satisfy
needs and the impacts that these processes have on the consumer
and society.
 This view of consumer behaviour is the broader view and leads us to
examine indirect influences on consumption decisions as well as
consequences that involve more than the purchaser and seller.
 Proper understanding of consumer behaviour is of utmost
importance in order to develop an effective marketing strategy.
Hence, successful marketing decisions by commercial firms,
nonprofit organizations, and regulatory agencies require
extensive information on consumer behaviour, which they apply on
a regular basis.
 At the current state of development, consumer behaviour theory
provides the manager with the proper questions to ask, however it
often becomes necessary to conduct research to answer these questions,
which means the consumer behaviour has become a Complex and
Multidimensional process.
 Marketing practice designed to influence consumer behavior,
influences the firm, the individual, and society.
Ex:- Pampers, while providing substantial benefits to individual
consumers and profits for P&G, alongside increase the uses of resources
and disposition issues that affect the entire society.
Similarly, obvious concerns arise around products such as cigarettes and
alcohol.
Likewise, specific marketing practices such as targeting children on the
Web have implications for the family and society.

 It should be noted, that all marketing Decisions and Regulations

are based on assumptions about consumer behaviour.
Ex:- Regulations designed to protect children from various marketing
practices on the Web must be based on assumptions about children’s
ability to process information and make decisions in this environment.
Similarly, a decision to match a competitor’s price reduction must be
based on some assumption about how consumers evaluate prices and
how they would respond to a price differential between the two brands.
 Applications of Consumer Behaviour:-

1. Marketing Strategy:- All marketing strategies and tactics are

based on explicit or implicit beliefs about consumer behaviour.

 Decisions based on explicit assumptions & sound theory and

research are more likely to be successful than are decisions based
solely on implicit intuition.

 The knowledge of consumer behaviour is an important

competitive advantage, as it can greatly reduce the odds of bad
decisions.
Ex:- BIC Corp. introduced a small $ 5 bottle of perfume to be
sold in supermarkets and drugstore chains where it had tremendous
distribution strength. The idea was to make the perfume easy and
convenient to buy and use. However, the project ran into $ 11 million
loss. Researches concludes that “Fragrance is an emotional sell,
not convenience or utility. The BIC package wasn’t feminine. It
looked like a cigarette lighter.”
2. Regulatory Policy:- Effective regulation of many marketing
practices requires an extensive knowledge of consumer
behaviour.
Ex:- FDA ordered three manufacturers of vegetable oil to remove
claims on their labels that state that the products contain no
cholesterol. The FDA believes that the claims of no cholesterol are
misleading even though they are true. The FDA staff that issued
these regulations did so based on their beliefs and knowledge about
how consumers process information.
However, if they are incorrect, both consumers and firms
delivering a superior product are harmed.

Similarly, a ban on advertising cigarettes and alcoholic beverages

exists in India under the belief that this does influence higher
consumption block. This has been extended to a ban on sales of
cigarettes within 100 meters of schools, or to consumers below 18
years of age, is based on assumptions related to age effects on trial
and habit forming behaviour.
3. Social Marketing:- Social marketing is the application of marketing
strategies and tactics to alter or create behaviours that have a
positive effect on the targeted individuals or society as a whole.
Ex:- Attempts to reduce smoking, to increase the percentage of children
receiving their vaccinations in a timely manner, anti AIDS campaigns
etc.
Just like the commercial marketing strategy, successful social marketing
strategy also requires a sound understanding of consumer behaviour.

4. Informed Individuals:- Most economically developed societies are

legitimately referred to as consumption societies.
 Most individuals in these societies spend more time engaged in
consumption than in any other activity, including work or sleep
(both of which also involve consumption).
 Thus, the knowledge of consumer behaviour can enhance
understanding of the environment and people, which is essential
for sound citizenship, effective purchasing behaviour, and
reasoned business ethics.
 Marketing Strategy & Consumer Behaviour:- To survive in a
competitive environment, an organization must provide target
customers more value than is provided by its competitors.

 Customer value is the difference between all the benefits

derived from a total product and all the costs & risks of
acquiring those benefits.
Ex:- Owing a car can provide a number of benefits, depending on
the person and the type of car, including flexible transportation,
image, status, pleasure, comfort and even companionship.
However, securing these benefits requires paying for the car, fuel,
insurance, maintenance, parking fees, as well as risking injury from
an accident, adding to environmental pollution, and dealing with
traffic jams and other frustrations.

 It is the difference between the total benefits and the total

costs that constitutes customer value.
 Ex:- La Choy management decided to launch a line of large,
meaty, frozen egg rolls to be used as a main course rather than as
appetizers, as the smaller egg rolls, seeing the rapidly growing
market of frozen foods.
The logic seemed sound. Unfortunately, the large egg rolls could
not be microwaved (the shells became soggy) and they took 30
minutes to heat in a regular oven.
Consumers considered value in frozen foods of this type to
include quick preparation.
The egg rolls were a market failure and had to be withdrawn
from the market.
 Providing superior customer value requires the organization
to do a better job of Anticipating and Reacting to customer
need than the competition does.
Fig:- Marketing Strategy and Consumer Behavior
Outcomes
Individual, Firm, Society

Consumer Decision Process

Problem recognition, Information search,
Alternative evaluation, Purchase, Use, Evaluation

Market Strategy
Product, Price, Distribution, Promotion, Service

Market Segmentation
Identify product-related need sets
Group customers with similar need sets
Describe each group
Select attractive segment(s) to target

Market Analysis
Company, Competitors, Conditions, Consumers
 The above figure indicates, an understanding of consumer behavior
is the basis for marketing strategy formulation.

 Consumers’ reactions to this marketing strategy determine the

organization’s success or failure.

 However, these reactions also determine the success of the

consumers in meeting their needs, and they have significant
impacts on the larger society in which they occur.

A. Market Analysis Components:- Market analysis requires a thorough

understanding of the organization’s own capabilities, the
capabilities of current and future competitors, the consumption
process of potential customers, and the economic, physical, and
technological environment in which these elements will interact.

1. The Consumer:- It is not possible to anticipate and react to customers’

needs and desires without a complete understanding of consumer
behaviour. Discovering customers’ current needs is a complex
process, but it can often be accomplished with the help off a good
marketing research.
2. The Company:- A firm must fully understand its own ability to
meet the needs of the customers.
 This involves evaluating all aspects of the firm, including its
financial condition, general managerial skills, production
capabilities, research & development capabilities,
technological sophistication, reputation and marketing skills.

 Marketing skills would include New–product development

capabilities, Channel strength, Advertising abilities, Service
capabilities, Marketing Research abilities, Market and
Consumer knowledge.

 Failure to adequately understand one’s own strengths can

cause serious problems.
Ex:- IBM’s first attempt to enter the home computer market with
the PC Jr. was a failure in part for this reason.
Although IBM had an excellent reputation with large business
customers and a very strong direct sales force for serving them, these
strengths were not relevant to the household consumer market.
3. The competitors:- It is not possible to consistently do a better job of
meeting customer needs than the competition without a
thorough understanding of the Competition’s Capabilities and
Strategies.
 This requires the same level of knowledge of a firm’s key
competitors as of one’s own firm.
 In addition, for any significant marketing action, the following
questions must be answered:-

i. If we are successful, which firms will be hurt (loose sales or sales

opportunities)?
ii. Of those firms that are injured, which have the capability (financial
resources, marketing strengths) to respond?
iii. How are they likely to respond (reduce prices, increase advertising,
introduce a new product)?
iv. Is our strategy (planned action) robust enough to withstand the likely
actions of our competitors, or do we need additional contingency plans?
4. The Conditions:- The State of the economy, the Physical
environment, Government regulations and Technological
developments affect consumer Needs and Expectations as well
as Company and Competitor capabilities.

 The deterioration of the physical environment has produced

not only consumer demand for environmentally sound
products but also government regulations affecting product
design and manufacturing.
Ex:- In India, each region, each state, provides a different
environment.
Tastes and combinations of products would change significantly
across states.
Logistics and infrastructure across the interiors of the states
would require radically different strategies.

 Clearly, a firm cannot develop a sound marketing strategy

without anticipating the conditions under which that strategy
will be implemented.
B. Market Segmentation:- The most important marketing decision
a firm makes is the selection of one or more market segments
on which to focus.

 A Market Segment is a portion of a larger market whose needs

differ somewhat from the larger market.

 Since a market segment has unique needs, a firm that develops a

total product focused solely on the needs of that segment will
be able to meet the segment’s desires better than a firm whose
product or service attempts to meet the needs of multiple
segments.

 To be viable, a segment must be large enough to be served

profitable. To some extent, each individual or household has
unique needs for most products.
For Ex:- Say a preferred colour combination.
 The smaller the segment, the closer the total product can be to
that segment’s desires.

 But at the same time, the smaller the segment, the more it costs
to serve the segment.
Ex:- Thus, a tailor-made suit costs more than a mass-produced suit.

 However, flexible manufacturing and customized media are

making it increasingly cost effective to develop products and
communications for small segments or even individual
consumers.

 Market segmentation involves four steps:-

1. Identifying product-related need sets.

2. Grouping customers with similar need sets.
3. Describing each group.
4. Selecting an attractive segment(s) to serve.
1. Product–Related Need Sets:- Organizations approach market
segmentation with a set of current and potential capabilities.

 These capabilities may be reputation, an existing product, a

technology, or some other skill set.

 The first task of the firm is to identify need sets that the
organization is capable, or could become capable, of meeting.

 The term need set is used to reflect the fact that most products in
developed economies satisfy more than one need.
Ex:- An automobile can meet more needs than just basic
transportation.
Some customers purchase cars to meet transportation and status
needs. Others purchase them to meet transportation & fun needs.
Still others purchase to meet status, fun and transportation needs.
Accordingly the automobile companies use to target their
products.
Ex:- Scorpio, Volvo, Safari etc.
 Similarly, the market for detergent powders has always been
competitive, but it has been dominated by large multinational
players with major national presence, strong brands with large
sales, and small local players with limited presence and low
brand strength.

Nirma started a major national brand awareness and image

building campaign (Catch-line – ‘Sabki pasand Nirma’), and sold
its product at a much lower price than the major brands.

This understanding of the market need allowed Nirma to

bring out a brand which fulfilled a specific need to a large
market segment which no other player had earlier attempted
to target.

 Identifying the various need sets that the firm’s current or

potential product might satisfy typically involves consumer
research, particularly focus groups and depth interviews, as
well as logic and intuition.
 These need sets are often associated with other variables such as
Age, Stage in the household life cycle, Gender, Social class,
Ethnic group, or Lifestyle, and many firms start the segmentation
process focusing first on one or more of the groups defined by
one of these variables.

2. Customers with Similar Need Sets:- The next step is to group

consumers with similar need sets.
Ex:- The need for moderately priced, fun, sporty automobiles
appears to exist in many young single individuals, young couples
with no children, and middle-aged couples whose children have left
home. These consumers can be grouped into one segment as far as
product features and perhaps even product image are concerned
despite sharply different demographics.

 This step generally involves consumer research, including focus

group interviews, surveys, product concept tests and an
analysis of current consumption pattern.
3. Description of Each Group:- In order to design an effective
marketing program, it is necessary to have a complete
understanding of the potential customers, which can be only
possible after identifying correctly the need sets.

Thus, while many young single individuals, young couples with

no children, and middle–aged couples whose children have left
home may want the same features in an automobile, the media
required to reach each group and the appropriate language and
themes to use with each group would likely to differ.

4. Attractive Segment(s) to Serve:- Once we are sure we have a

thorough understanding of each segment, the target market must
be selected i.e. that segment(s) of the larger market on which we
will focus our marketing effort.

 This decision is based on the ability to fulfill the needs of the

selected segment(s) with superior customer value at a profit.
 One should always remember that each market segment requires
its own marketing strategy.

 Each element of the marketing mix should be examined to

determine if changes are required from one segment to
another, as sometimes each segment requires a completely
different marketing mix, including the product. At other times,
only the advertising message or retail outlets may need to
differ.
Ex:- The current value proposition an MNC offering cereals,
involves the ‘smartness’ of the child due to essential ingredients,
rather than their earlier thrust on taste through chocolate covered
offerings. Thus even the common and total product focus may
change over time, for the same segment.
 Table:- Market Segment Attractiveness Worksheet
Criterion Score
Segment Size
Segment Growth Rate
Competitor Strength
Customer Satisfaction with existing Products
Fit with Company Image
Fit with Company Objectives
Fit with Company resources
Distribution Available
Investment Required
Stability / Predictability
Cost to Serve
Sustainable Advantage Available
Communications Channels available
Risk
Others (_____________)

Score on a 1 to 10 scale where 10 being most favorable

 Marketing Strategy:- A decisive criterion in selecting target
markets is the ability to provide superior value to those market
segments.

 Since customer value is delivered by the marketing strategy, the firm

must develop its general marketing strategy as it evaluates
potential target markets.

 Marketing Strategy is basically the answer to the question:

‘How will we provide superior customer value to our target
market?’

 And the answer requires formulation of a consistent marketing

mix. The Marketing mix is the Product, Price, Communications,
Distribution, and Services provided to the target market.

 It is the combination of these elements that meets customer

needs and provides customer value.
Ex:- Britannia Tiger Biscuits promised superior value through
better taste and a lower price than its competitors.
1. The Product:- A Product is anything a consumer acquires or
might acquire to meet a perceived need.

 Customers are generally buying need satisfaction and not

physical product attributes.
Ex:- As per the former head of Revlon, ‘In factory we make
cosmetics, in the store we sell hope’.
Similarly, Consumers don’t purchase quarter–inch drill bits
but the ability to create quarter–inch holes.
Again, Most of the courier companies lost much of their
overnight letter delivery business to fax machines and the
internet as they could meet the same consumer needs faster,
cheaper, or more conveniently.

 To be successful, products must meet the needs of the target

market better than the competition does.
2. Price:- Price is the amount of money one must pay to obtain the
right to use the product.

 One can buy ownership of a product or, for many products, or

limited usage rights.

 Economists often assume that lower prices for the same product
will result in more sales than higher prices. But this is not
always correct, as price sometimes serves as a signal of quality.

 Hence, setting a price requires a thorough understanding of the

symbolic role that price plays for the product and target
market in question.

 It is important to note that the price of a product is not the same

as the cost of the product to the customer.

 Consumer cost is everything the consumer must surrender in

order to receive the benefits of owning / using the product.
 Ex:- Cost of owning / using an automobile includes insurance,
fuel, maintenance, finance charges, license fees, parking fees, time &
discomfort while shopping for the car, and perhaps even discomfort
about increasing pollution, in addition to the purchase price.

3. Communications:- Marketing communications include

advertising, the sales force, public relations, packaging, and
any other signal that the firm provides about itself and its
products.

 An effective communication strategy requires answers to the

following questions:-

i. With whom, exactly, do we want to communicate?:- While most

messages are aimed at the target–market members, others are
focused on channel members or those who influence the
target–market members.
Ex:- Pediatric nurses are often asked for advice concerning
diapers and other nonmedical infant care items.
 Hence, a firm marketing such items would be wise to communicate
directly with these individuals.
Similarly, for a children’s breakfast cereal, should the
communication be aimed at the children or the parents or both? The
answer depends on the target market and varies from country to
country.

ii. What effect do we want our communications to have on the

target audience?:- While the ultimate objective of an
advertising and other marketing communications is to
increase sales, the behavioral objective for most marketing
communications is often much more immediate.

 i.e. it may seek to have the audience learn something about the
product, seek more information about the product, like the
product, recommend the product to others, feel good about
having bought the product, or a host of other communications
effects.
iii. What message will achieve the desired effect on our audience?:-
What words, pictures, and symbols should we use to capture
attention and produce the desired effect?

 Marketing messages can range form purely factual statements to

pure symbolism.

 The best approach depends on the situation at hand.

 Developing an effective message requires a thorough

understanding of the meanings, the target audience attaches
to words, and symbols, as well as knowledge of the perception
process.

iv. What means and media should we use to reach the target
audience?:- Should we use personal sales to provide
information?
 Can we rely on the package to provide needed information?
 Should we advertise in mass media, use direct mail, or rely on
consumers to find us on the Internet?
 If we advertise in mass media, which media and which specific
vehicles should we use?

 Answering these questions requires an understanding, both of

the media that the target audiences use and of the effect that
advertising in those media would have on the product’s image.

v. When should we communicate with the target audience?:-

Should we concentrate our communications near the time that
purchases tend to be made or evenly throughout the week,
month, or year?

 Do consumers seek information shortly before purchasing our

product? If so, where?

 Answering these questions requires knowledge of the decision

process used by the target market for this product.
4. Distribution:- Having the product available where target
customers can buy it, is essential to success, because only in
rare cases the customers will take much of trouble to secure a
particular brand.

 Good channel decisions require a sound knowledge of where

target customers shop for the product in question?

5. Service:- Earlier, we defined product to include primary or core

services such as haircuts, car repairs, and medical treatment.
Here service refers to auxiliary or peripheral activities that
are performed to enhance the primary product or service.
Thus car repair is actually a product and free pickup and delivery
of the car would be an auxiliary service.
 A firm that does not explicitly manage its auxiliary services is at
a competitive disadvantage.
 Auxiliary services cost money to provide. Hence, it is essential
that the firm furnish only those services that provide value to
the target customers, because providing services that customers
do not value, can result in high costs and high prices without a
corresponding increase in customer value.
 Consumer Decisions:- As depicted in the below figure, the
consumer decision process intervenes between the Marketing
strategy and the Outcomes.
Fig:- Marketing Strategy and Consumer Behavior
Outcomes
Individual, Firm, Society

Consumer Decision Process

Problem recognition, Information search,
Alternative evaluation, Purchase, Use, Evaluation

Market Strategy
Product, Price, Distribution, Promotion, Service

Market Segmentation
Identify product-related need sets
Group customers with similar need sets
Describe each group
Select attractive segment(s) to target

Market Analysis
Company, Competitors, Conditions, Consumers
 The outcomes of the firm’s marketing strategy are determined by its
interaction with the consumer decision process.

 The firm can succeed only if consumers see a need that its product
can solve, become aware of the product and its capabilities,
decide that it is the best available solution, proceed to buy it, and
become satisfied with the results of the purchase.

 Outcomes:-
A. Firm Outcomes:-
i. Product Position:- The most basic outcome for a firm of a
marketing strategy is its product position – ‘An image of the
Product or Brand in the consumer’s mind relative to the competing
Products and Brands.
 This image consists of a set of beliefs, pictorial representations,
and feelings about the product or brand.
 It is determined by communications about the brand from the
firm and other sources, as well as by direct experience with it.
 Most marketing firms specify the product position they want
their brands to have and measure these positions on an
ongoing basis, because a brand whose position matches the
desired position of a target market is likely to be purchased
when a need for that product arises.
Ex:- Sauza Commemorative tequila attempts to build a product
position as a smooth, lighthearted Tequila by running a series of
humorous ads all with the tag line ‘Life is harsh. Your Tequila
shouldn’t be’. This positioning has helped the brand’s sales grow at
more than twice the industry average.

ii. Sales:- Sales are a critical outcome, as they produce the revenue
necessary for the firm to continue in the business.

 Therefore, virtually all firms evaluate the success of their

marketing programs in terms of sales, and sales are likely to
occur only if the initial consumer analysis was correct and if
the marketing mix matches the consumer’s decision process.
iii. Customer Satisfaction:- It has been discovered that it is generally
more profitable to maintain existing customers than to replace
them with new customers, and this requires, that, they be satisfied
with their Purchase and Use of the product.

Our Total
Product
Consumer Superior Perceived
Customer
Decision Value Sales Value
Satisfaction
Process Expected Delivered
Competitors’
Total
Products
Fig:- Creating Satisfied customers

 As the above figure indicates, convincing consumers that your

brand offers superior value is necessary in order to make the
initial sale.

 However, creating satisfied customers, and thus future sales,

requires that customers continue to believe that your brand meets
their needs and offers superior value after they have used it.
 The thing is that we must deliver as much or more value than our
customers initially expected, and it must be enough to satisfy
their needs.

 This requires an even greater understanding of consumer

behavior.
Ex:- Honda had the factory workers who actually assemble the
cars as well as the marketing managers conduct telephonic
interviews with over 47,000 Accord owners all over the world.
The interviews sought to determine customer satisfaction levels
with all aspects of the Accord as well as ideas for improvements.
The interviews were conducted by those who would have to
make any necessary changes.
B. Individual Outcomes:-
i. Need Satisfaction:- The most obvious outcome of the consumption
process for an individual, whether or not a purchase is made, is some
level of satisfaction of the need that initiated the consumption
process.

 This can range from Zero (or even negative if a purchase increases the
need rather than reduces it) to Complete.

 Here two key processes are involved – The Actual Need Fulfillment and
The Perceived Need Fulfillment.

 Though, these two processes are closely related and are often identical,
at times they differ.
Ex:- People might take a food supplement because they believe it is
enhancing their health while in reality it could have no direct health effects
or even negative effects.

 One objective of government regulation and a frequent goal of

consumer groups is to ensure that consumers can adequately judge
the extent to which products are meeting their needs.
ii. Injurious Consumption:- Injurious consumption occurs when
individuals or groups make consumption decisions that have
negative consequences for their long–run well–being.
Ex:- Cigarette, Liquor, etc.

 Companies are not the only entities that promote potentially

harmful products. Many states of the nations world wide now
promote state–sponsored gambling, which has caused
devastating financial consequences for some.

C. Society Outcomes:-
i. Economic Outcomes:- The cumulative impact of consumers’
purchase decisions, including the decision to forgo
consumption, is a major determinant of the state of a given
country’s economy.

 Their decisions on whether to buy or save affect economic

growth, the availability and cost of capital, employment levels,
and so forth.
 The types of Products and Brands purchased influence the
balance of payments, industry growth rates, and wage levels.

 Decisions made in one society, particularly large wealthy

societies like the United State, Western Europe, and Japan, have
a major impact on the economic health of many other
countries.
Ex:- A recession in the United States or a strong shift toward
purchasing only American–made products would have profound
negative consequences on the economies of many other countries,
both developed and developing.

ii. Physical Environment Outcomes:- Consumers make decisions

that have a major impact on the physical environments of both
their own and other societies.
Ex:- The cumulative effect of Developed and Developing
countries’ consumers’ decisions to increased rely on private vehicles
rather than mass transit results in significant air pollution as well as
the consumption of nonrenewable resources.
iii. Social Welfare:- Consumer decisions affect the general social
welfare of a society.

 Decisions concerning how much to spend for private goods

(personal purchases) rather than public goods (support for public
education, parks, health care, and so forth) are generally made
indirectly by consumers’ elected representatives. These decisions
have a major impact on the overall quality of life in a society.

 The Nature of Consumer Behavior:- The general structure and

process of consumer behavior and the organization can be
explained by a Conceptual Model, which reflect our beliefs about
the general nature of consumer behavior.

 Individuals develop self–concepts and subsequent lifestyles

based on a variety of Internal (mainly psychological and physical)
and External (mainly sociological and demographic) influences.

 These self–concepts and lifestyles produce needs and desires,

many of which require consumption decisions to satisfy.
 External Experiences and Acquisitions
Influences
Decision
Culture Process
Subculture
Demographics Situations
Social Status
Reference Groups
Problem
Family
Marketing Activities Recognition
Self – Concept Needs
and Information
Lifestyle Desires Search

Internal Alternative Evaluation

Influences And Selection

Perception Outlet Selection

Learning And Purchase
Memory
Motives
Personality Post – Purchase
Emotions Processes
Attitudes
Experiences and Acquisitions
Fig:- Overall Model of Consumer Behavior
 As individuals encounter relevant situations, the consumer
decision process is activated.

 This process and the experiences & acquisitions it produces in

turn influence the consumers’ self–concept & lifestyle by
affecting their internal and external characteristics.

 This model, while simple, is both conceptually sound and

intuitively appealing.

 Each of us has a view of ourselves (self–concept), and we try to

live in a particular manner given our resources (lifestyle).

 Our view of ourselves and the way we try to live are determined
by internal factors (such as our personality, values, emotions, and
memory) and external factors (such as our culture, age, friends,
family, and subculture).

 This results in Desires and Needs that we bring to the multitude

of situations we encounter daily.
 Many of these situations will cause us to consider a purchase.

 Our decision, and even the process of making it, will cause
learning and may affect many other internal and external
factors that will change or reinforce our current self–concept
and lifestyle.

 Though from the above model and discussion, consumer behavior

seem simple, structured, conscious, mechanical, and linear, it is
actually complex, disorganized, non–conscious, organic, and
circular.

 This can be easily be felt by a quick analysis of ones own

behavior and that of one’s close friends.
 External Influences:- Dividing the factors that influence
consumers into categories is somewhat arbitrary.
For Ex:- We treat learning as an internal influence despite
the fact that much human learning involves interaction with,
or imitation of other individuals.

• Thus, learning could also be considered as a group process.

(The two dimensional arrow in the above figure connecting internal
and external influences is used to indicate that each set interacts
with the other).

• Culture has perhaps the most pervasive influence on consumer

behavior, as it reflect the changes in our society as well as our
ethnic diversity.
 Internal Influences:- Internal influences begin with perception,
the process by which individuals receive and assign meaning to
stimuli.

• This follows by Learning – changes in the content or structure of

long–term memory, Motivation – the reason for a behavior,
Personality – an individual’s characteristic response tendencies
across similar situations, and Emotion – strong, relatively
uncontrolled feelings that affect our behavior.

• These are concluded with Attitude – an enduring organization

of motivational, emotional, perceptual, and cognitive
processes with respect to some aspect of our environment.
 Self–Concept and Lifestyle:- As a result of the interaction of all the
variables described above, individuals develop a self–concept which
is reflected in a lifestyle.

• The Self–Concept is the totality of an individual’s Thoughts and

Feelings about himself or herself.

• Lifestyle is, quite simply – How one lives. It indicates the products
one buys, how one uses them, what one thinks about them, and
how one feels about them.

• It is the manifestation of the individual’s self–concept – the total image

the person has of himself or herself as a result of the culture he or
she lives in and the individual situations and experiences that
comprise his or her daily existence.

• It is the sum of the person’s past decisions and future plans.

• Both, individuals and families exhibit distinct lifestyles.

• One’s lifestyle is determined by both conscious and unconscious

decisions.
• Often we make choices with full awareness of their impact on
our lifestyle, but generally we are unaware of the extent to
which our decisions are influenced by our Current or Desired
lifestyle.

• As a consumer, we make decisions, consistent with our lifestyles

without deliberately considering lifestyle.

• Most consumer decisions involve very little effort or thought

on the part of the consumer. They are called low–involvement
decisions.

• Feelings and Emotions are as important in many consumer

decisions as logical analysis or physical product attributes.

• Nevertheless, most consumer purchases involve at least a

modest amount of decision making, and most are influenced by
the purchaser’s current and desired lifestyle.
 Situations and Consumer Decisions:- Consumer decisions
result from perceived Problems (I’m thirsty) and Opportunities
(That looks like it would be a fun to try).

 The term problem is referred both to problems and to

opportunities.

 Consumer problems arise in specific situations and the nature

of the situation influences the resulting consumer behavior.
Ex:- The above figure indicates, a consumer’s needs / desires may
trigger one or more levels of the consumer decision process.

 It is important to note that for most purchases, consumers devote

very little effort to this process, and Emotions & Feelings often
have as much or more influence on the outcome as do facts and
product features.

 Despite the limited effort that consumers often devote to this

process, the results have important effects on the individual
consumer, the firm, and the larger society.