Consumer Behaviour

“The most important thing is to

forecast where customers are moving
and to be in front of them”

- Philip Kotler

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 Levels of Consumer Decision Making

1) Extensive Problem Solving :

When consumers don’t have established criteria for

evaluating a product category or they have not short
listed the brands.

Consumers need a great deal of information to

establish a set of criteria to judge brands.

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 Levels of Consumer Decision Making

2) Limited Problem Solving :

When consumers already have established the basic

criteria for evaluating the product category and the
various brands available.

However, they have not established preferences

concerning a select group of brands

This search for additional information is like “Fine

Tuning”

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 Levels of Consumer Decision Making

3) Routinized Problem Solving :

Consumers have experience about the product category

and a well established set of criteria to evaluate the
brands.

Still they want small pieces of additional information or

they just review what they already know.

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 Model of Consumer Decision Making

Model of consumer decision making is described as a

system i.e. Input, Process and Output.

This model does not provide exhaustive picture of the

complexities of the Consumer Behaviour. Rather it
is designed to synthesize and coordinate the relevant
concepts.

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 Basic Model of Consumer Behaviour

Marketing Stimuli Buyer’s Characteristics

Product Cultural Social Buyer’s Decisions
Price Personal Psychological Product Choice
Place Brand Choice
Promotion Decision Making Process Dealer Choice
Problem Recognition Purchase Timings
Other Stimuli
Information Search Purchase Amount
Economic
Evaluation of Alternatives
Technological
Purchase decision
Political
Post purchase Behaviour
Cultural

Input Process Output

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 External Influences
Firm’s Marketing Efforts
1. Product
2. Promotion
Input 3. Price
4. Distribution Network
Socio-Cultural Environment
1. Family
2. Informal Sources
3. Other non-commercial
sources
4. Social Class
5. Subculture and Culture

Consumer Decision Making

Steps Psychological Field
• Need Recognition {Motivation, Perception, Learning,
Process • Pre-purchase Search Personality, Attitude}
• Evaluation of
Alternatives Experience

Post Decision Behaviour

Output Purchase
Post-purchase Evaluation
{Trial, Repeat Purchase} 7
 Socio-cultural Environment

Social Factors : Family

Two types of Families
1) Family of Orientation : Consists of parents and
siblings. From parents, a person acquires an
orientation towards religion, politics, and
economics. Impact of family-preaching is long
lasting.

2) Family of Procreation : One’s spouse and children.

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 Socio-cultural Environment

Social Factors : Reference Groups

A person’s Reference Group consists of all the groups
that have a direct (Face to face) or indirect influence
on the person’s attitudes or behaviour.

Membership Group : Groups having direct influence

For example
Primary Groups : Family, friends, neighbours and co-
workers with whom a person interacts continuously.
Secondary Group : Religious, professional groups
which are more formal and require less interaction.
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 Socio-cultural Environment

A Person is also influenced by group to which they do

not belong
Aspirational Group : Groups a person hopes to join
Dissociative Group : Groups whose values and
behaviour an individual rejects.

Impact of Reference Group

1. Exposure to new behaviours and lifestyles.
2. Influence attitudes and self-concept.
3. Create pressure for conformity which affects
product and brand choices.
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 Socio-cultural Environment

Social Factors : Roles and Status

A person participate in many groups – family, clubs,
organization. The person’s position in each group
can be defined in terms of Role and Status.

Role consists of the activities a person is expected to

perform. Each role carries a Status.

People choose their products that communicate their

role and status in the society.

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 Socio-cultural Environment

Cultural Factors
Culture is the set of values and beliefs closely held and
shared by all in a group.

A growing child in United States is exposed to these

values : Achievement and Success, activity,
efficiency, practicality, progress, material comfort,
individualism, freedom, external comfort and
youthfulness.
Subculture: Provides more specific identification and
socialization for their members.
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 Socio-cultural Environment

Social Classes
Relatively homogeneous and enduring divisions in the
society, which are hierarchically ordered and whose
members have similar values, interests and
behaviour.

Social Classes reflect not only income but also

occupation, education and area of residence.

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 Socio-cultural Environment

Characteristics of Social Classes

1. Within each class, people tend to behave more alike.

2. Persons are perceived as occupying inferior or

superior positions according to social class.

3. Social class is indicated by a cluster of variables like

occupation, income, wealth, education, value
orientation, etc.

4. Individuals can move up or down the ladder of social

class during their lifetime. 14
 Personal Factors
Age and Stage in the Life Cycle
1. Product requirements change with age over lifetime

2. Consumption is shaped by state of Family Life Cycle.

Occupation and Economic Circumstances
1. Occupation influences consumption patterns.

2. Product choice is affected by economic circumstances

viz. Spendable income (level, stability and time
pattern), Savings and assets, debts, borrowing power
and attitude towards spending & saving.
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 Personal Factors
Life Style
1. Life style is a person’s pattern of living in the world
as expressed in activities, interests and opinions.
2. Life style portrays the person’s interaction with world

Personality and Self-concept.

1. Personality means a set of distinguishing human
psychological traits that lead to relatively consistent
and enduring responses to environmental stimuli.
2. Brand Personality is the specific mix of human traits
that may be attributed to a particular brand.
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 Psychological Factors
Motivation
1. A need becomes a motive when aroused to sufficient
level of intensity.
2. Motive is a need that is sufficiently pressing a person
to act.
Beliefs and attitudes
1. Belief is a descriptive thought that a person holds
about something
2. Attitude is a person’s enduring favourable or
unfavourable evaluations, emotional feelings and
action tendencies towards some object or idea.
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 Psychological Factors

Perception
• How a motivated person really acts, depends on his
perception of situation.

• Perception is the process by which an individual

selects, organizes and interprets information inputs
to create a meaningful picture of the world.
• Three Perceptual Processes
* Selective Attention
* Selective Distortion
* Selective Retention
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 Buying Roles
1. Initiator : One who first suggests the idea of buying

2. Influencer : One whose views influence the decision

3. Decider : One who actually makes the decision

4. Buyer : One who makes the actual purchase

5. User : One who consumes or uses the product or

service.

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 Types of Buying Behaviour

Complex Buying Variety-seeking

Significant Differences
Between Brands Behaviour Buying
Behaviour

Dissonance-
Few Differences Habitual Buying
Reducing Buying
Between Brands Behaviour
Behaviour

High Involvement Low Involvement

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Complex Buying Behaviour
• High involvement and Significant differences
among brands.
• Complex Behaviour involves three step process :
1. Buyer develops beliefs about the product.
2. Develops attitude about the product.
3. Buyer makes thoughtful choice.
• For products which are expensive, bought
infrequently, risky and highly self-expressive.
• Marketer should influence all three stages.

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Dissonance Reducing Buying Behaviour
• Consumer is highly involved in purchase but sees
less difference among brands
• High involvement because purchase is expensive,
infrequent and risky.
• This behaviour involves three step process :
1. Buyer finds out what is available.
2. If quality differences observed, may pay higher.
3. If little differences, purchase on price or
convenience and to reduce dissonance.
• Marketer should supply beliefs/attitudes that support
customers decisions.
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Habitual Buying Behaviour
• Low involvement and less differences among brands.
e.g.. Salt
• Consumers go to store and ask for the brand, out of
habit, not because of Brand Loyalty.
• Ad repetition creates Brand Familiarity rather than
Brand Conviction
• Use price and sales promotions to stimulate product
trial.
• Adding some feature may raise consumer
involvement.

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Variety Seeking Buying Behaviour
• Low involvement and Significant differences among
brands.
• Consumers often do brand switching.
• Consumer picks up any brand without evaluation,
and evaluates during consumption.
• Switching is out of variety seeking rather than
dissatisfaction.
• Leader in such market try to encourage habitual
buying by dominating shelf space & promotion.
• Challengers encourage variety seeking by lower
prices, coupons, free samples, etc.
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 Stages in Buying Decision Process

Problem Recognition
• Buying process starts with need recognition.

• Internal Stimuli like hunger, thirst, etc.

• External stimuli like observations, advertising, etc.

• Marketers should understand circumstances that

trigger a particular need or the most frequent stimuli
that spark interest in product category.

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 Stages in Buying Decision Process

Information Search
• Two levels of arousal
* Heightened Attention : More receptive to info.
* Active Search : tapping sources actively

Information Sources
• Personal : Family friends, neighbours, etc.
• Commercial : Advertising, salespeople, dealers, etc.
• Public : Mass media, consumer ratings, etc.
• Experiential : Handling , examining, using, etc.

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 Stages in Buying Decision Process

Evaluation of Alternatives

Other’s
Attitudes
Evaluate Purchase Evaluate
Alternatives Intention Alternatives

Unanticipated
Situations

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 Postpurchase Behaviour

• Post Purchase Satisfaction

• Post Purchase Actions

• Post Purchase Use and Disposal

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 Give It
Rent It Fore Resale
Get Rid Away
Temporarily
Trade It For Use
Lend It

Sell It To
Get Rid Consumer
Permanently
For original Throw It
Purpose Away Middlemen

Convert to
Keep it New Purpose To
Agent
Store It
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