Concept:

The most crucial issue for the marketers is to identify

the needs of the consumers. Only the identification of
needs is of no value unless and until this is
transformed in to a meaningful and appropriate
satisfiers.
For this whole process of converting needs into actual
satisfaction one needs to understand the complete
make up of consumer’s mind, and this process is
known as consumer behaviour.
According to Schiffman and Kanuk “Consumer
behaviour encompasses all of the behaviours that
consumers display in searching for, purchasing, using,
evaluating and disposing of products and services that
they expect will satisfy their needs”.
On the basis of above definitions, it can be concluded
that consumer behaviour is the study of consumers
regarding what they buy, when do they buy, from
where they buy, how frequently they buy, and how
they use certain products.
But the study does not stop here as it also goes
further to study the post purchase and evaluations of
the consumers. So, it addresses all the issues related
from pre-purchase to post purchase behaviour of the
consumers.
Importance of Understanding
buyer Behaviour

1.  Production policies:
The study of consumer behaviour effects production
policies of enterprise. Consumer behaviour discovers
the habits, tastes and preferences of consumers and
such discovery enables and enterprise to plan and
develop its products according to these specifications.
2. Price policies:
The buyer behaviour is equally important in having
price policies. The buyers of some products purchase
only because particular articles are cheaper than the
competitive articles available in the market.
Decision regarding channels of distribution: The
goods, which are sold and solely on the basis of low
price and economical distribution channels. In case of
those articles, which week T.V. sets, refrigerators etc.
Must have different channels of distribution. Thus,
decisions regarding channels of distribution are taken
on the basis of consumer behaviour.
Decision regarding sales promotion:
Study of consumer behaviour is also vital in making
decisions regarding sales promotion. It enables the
producer to know what motive prompt consumer to
make purchase and the same are utilised in
promotional campaigns to awaken desire to purchase.
 Exploiting marketing opportunities:
Study of consumer behaviour helps the marketers to
 understand the consumers needs, aspirations,
expectations, problems etc. This knowledge will be
useful to the marketers in exploiting marketing
opportunities and meeting the challenges of the
market.
Highly diversified consumer preferences:
This shift has occurred due to availability of more
choice now. Thus study of consumer behaviour is
important to understand the changes.
Rapid introduction of new products:
Rapid introduction of new product with technological
advancement has made the job of studying consumer
behaviour more imperative. For example, the
information Technologies are changing very fast in
personal computer industry.
Implementing the "Marketing concept":
This calls for studying the consumer behaviour, all
customers need have to be given priority. Thus
identification of target market before production
becomes essential to deliver the desired customer
satisfaction and delight.
Analysing market opportunity:
Consumer behaviour study help in identifying the
unfulfilled needs and wants of consumers. This
requires examining the friends and conditions
operating in the Marketplace, consumers lifestyle,
income levels and energy influences. This may reveal
unsatisfied needs and wants.
Selecting target market:
Review of market opportunities often helps in
identifying district consumer segments with very
distinct and unique wants and needs. Identifying
these groups, behave and how they make purchase
decisions enable the marketer to design and market
products or services particularly suited to their wants
and needs.
Marketing-mix decisions:
Once unsatisfied needs and wants are identified, the
marketer has to determine the right mix of product,
price, distribution and promotion. Where as,
consumer behaviour study is very helpful in finding
answers too many perplexing questions. 
Organizational Buyer Behaviour
Because organisational decisions typically involve
more individuals in more complex decision tasks than
household or individual decisions, marketing efforts
to affect this process are much more complex. There
are different stages in the decision-making process
from problem recognition to post purchase
performance evaluation.
1. Problem Recognition:
Like any other decision-making process, the first
stage of the organisational buying decision process
involves problem recognition, where one or more
persons recognise a problem. It may occur under a
variety of circumstances.
2. Information Search:
Information search can be both formal and informal.
Site visits to evaluate a potential vendor, laboratory
tests of a new product or prototype, and investigation
of possible product specifications are part of formal
information search.
Business buyers search for information both to help
make the best decision and to support their actions
and recommendations within the organisation.
3. Evaluation and Selection:
The evaluation of possible suppliers and selection of a
supplier often follows a two-stage decision process.
The first stage is making the buyer’s approved
suppliers list. In this case, a conjunctive decision
process is very common. Using this kind of process,
the organisations screen out potential suppliers that
do not meet all its criteria.
4. Purchase and Decision Implementation:
Once the decision to buy from a particular
organisation has been made, the method of purchase
must be determined.
From the seller’s point of view, it means how and
when they will get paid. In many cases, payment is
not made until delivery. Others involve progress
payments.
5. Post purchase performance evaluation:
In the final stage of business buying division process,
the new product’s performance is evaluated. The
product’s actual performance is compared to
specifications and necessary adjustments are made of
the product that does not function as per
expectations, the organisation can ask the supplier to
replace it.
 At the same time, the supplier’s performance is also
evaluated. If it is found to be unacceptable, the buyer
will seek corrective action from the supplier or he will
search out for a new supplier.
Influencing factors of
Organizational buying decisions
A. Environmental Factors
Environment factors affect organizational buying
behavior. This includes economic, technological,
political-legal, social responsibility and competition.
1. Economic factors: Economic factors affect
organizational buying behavior. This includes level of
demand and economic health. The level of demand
includes capacity and desire for buying goods. This is
affected by income distribution and price of product.
Prosperity, recession and recovery are included in
economic health. The prosperity condition is
economically good condition. Recession is
economically bad condition.
2.Technological factors: Technological factors also
affect organizational behavior. This includes level of
technology, pace of technology, technology transfer
etc. E-commerce as well as information technology
has got revolutionary change. It has directly affected
organizational buying behavior.
3. Political and legal factors: Political and legal
factors also affect organizational buying process
directly. Political factors include political system,
political situation, and political thought, government
policies etc. whereas constitution, laws, rules and
regulations etc. are included in legal factors.
4. Social responsibility: A business
organization should consider social responsibility
while buying any goods or services. Indigenous goods
should be given preference in buying and interest of
society should be protected. Interest of different
pressure group of the society also should be
considered while buying goods or services.
5.Competition: Competition also affects buying
behavior. This competition includes pure
competition, monopolistic competition and oligopoly
competition.
B. Organizational Factors
Organizational factors also affect organizational
buying behavior. This includes objectives, policies,
procedures, organizational structure and system.
1. Objectives: Buying objective is determined
according to organizational goal. Goods should be
purchased according to organizational objective. As
goods or services need to be purchased according to
organizational goal, buying is affected by objective.
2. Policies: Purchasing or buying policy also effects
organizational buying behavior. Goods should be
purchased according to buying policy of the
organization. If the organization has the policy of
buying indigenous goods, the buyer cannot buy
foreign goods. If the purchasing policy is silent in this
matter, whichever goods, foreign or indigenous, can
be purchased as desired.
3. Procedures: The methods and process adopted by
an organization to buy goods or services is called
procedure. Goods or services can be purchased
directly through agreement, or through tender,
demanding catalogue etc. Any of the method can be
adopted to buy goods or services. Whichever
procedure the organization has adopted,
the buyer should follow it.
4. Organizational structure: Organizational
structure defines authority and relations which
directly affects buying behavior. In some
organizations, goods or services are purchased by
direct order of chief executive while in some other
organizations, goods or services are bought through
purchase department. So, buying behavior is affected
by organizational structure.
5. System: Purchasing system also directly affects
buying behavior. An organization can adopt any one
or more such as centralized system, decentralized
system, huge quantity purchase system and others.
C. Interpersonal Factors
Interpersonal factors also affect buying behavior. This
includes authority, status, interest etc.
1.Authority: The personnel whom the organizational
structure gives authority to order for purchase, no
goods can be purchased without his order. Buying
decision of such authority plays an important role in
buying.
2.Status: The persons to purchase goods or services
and to give order for purchase may be different in an
organization. As much the behavior of the person
issuing purchase order affects behavior of the buyer. If
the status or level of the buyer is high, his buying
decision becomes rational and quick. His/her
behavior becomes mature.
3. Interest: Users, influencers, buyers, decider and
gate keeper are involved in organizational buying
process. Their interest affects organizational buying
process. As their interest becomes different, buying
process may be complicated.
D. Personal Factors
Personal factors also affect buying behavior. This
includes age of person, education, level of job,
personality etc.
1. Age: Age of person also affects selection and
priority. Younger persons make buying decision and
supplier selection quicker than older aged persons.
Similarly, the younger persons try to find new
suppliers whereas older persons try to give
continuation to the same who is supplying. So this
also affects buying process.
2.. Education: Education makes person able to
analyze good or bad. So, an educated person takes
buying decision rationally whereas uneducated
person makes buying decision at hit and miss/ or
hunch. Educated person selects goods or services
carefully. So, buyer’s education also affects
organizational buying behavior.
3. Job position: Job position also shows a person’s
status. Buyer’s position or status also affects his
buying behavior. Buyer’s status may be low or high.
4. Personality: Personality of person working in an
organization may be different. Personality affects
selection of quality, brand, price etc. So, buyer’s
personality also affects organizational buying
behavior.
5. Risk attitude: Risk bearing capacity of men
becomes different. Some can bear more risk and
others like to take less risk. Similarly, some like to
avoid risk and some others like to face. The capacity
and attitude to bear risk also affect buying behavior.
The buyers having the capacity to take high risk
become aggressive. But those having less risk bearing
capacity and having no risk bearing capacity do not
do so.
Consumer Behaviour
Meaning and Definition:
Consumer behaviour is the study of how individual
customers, groups or organizations select, buy, use, and
dispose ideas, goods, and services to satisfy their needs
and wants. It refers to the actions of the consumers in the
marketplace and the underlying motives for those actions.
Marketers expect that by understanding what causes the
consumers to buy particular goods and services, they will
be able to determine—which products are needed in the
marketplace, which are obsolete, and how best to present
the goods to the consumers.
Marketers expect that by understanding what causes
the consumers to buy particular goods and services,
they will be able to determine—which products are
needed in the marketplace, which are obsolete, and
how best to present the goods to the consumers.
Some selected definitions of consumer
behaviour are as follows:
1. According to Engel, Blackwell, and Mansard,
‘consumer behaviour is the actions and decision
processes of people who purchase goods and services
for personal consumption’.
2. According to Louden and Bitta, ‘consumer
behaviour is the decision process and physical
activity, which individuals engage in when evaluating,
acquiring, using or disposing of goods and services’.
Nature of Consumer
Behaviour:
1. Influenced by various factors:
The various factors that influence the consumer
behaviour are as follows:
a. Marketing factors such as product design, price,
promotion, packaging, positioning and dis­tribution.
b. Personal factors such as age, gender, education
and income level.
c. Psychological factors such as buying motives,
perception of the product and attitudes towards the
product.
d. Situational factors such as physical surroundings
at the time of purchase, social surroundings and time
factor.
e. Social factors such as social status, reference
groups and family.
f. Cultural factors, such as religion, social class—
caste and sub-castes.
2. Undergoes a constant change:
Consumer behaviour is not static. It undergoes a
change over a period of time depending on the nature
of products. For example, kids prefer colourful and
fancy footwear, but as they grow up as teenagers and
young adults, they prefer trendy footwear, and as
middle-aged and senior citizens they prefer more sober
footwear. The change in buying behaviour may take
place due to several other factors such as increase in
income level, education level and marketing factors.
The change in buying behaviour may take place due
to several other factors such as increase in income
level, education level and marketing factors.
3. Varies from consumer to consumer:
All consumers do not behave in the same manner.
Different consumers behave differently. The
differences in consumer behaviour are due to
individual factors such as the nature of the
consumers, lifestyle and culture. For example, some
consumers are technoholics. They go on a shopping
and spend beyond their means.
They borrow money from friends, relatives, banks,
and at times even adopt unethical means to spend on
shopping of advance technologies. But there are other
consumers who, despite having surplus money, do
not go even for the regular purchases and avoid use
and purchase of advance technologies.
4. Varies from region to region and country to
county:
The consumer behaviour varies across states, regions
and countries. For example, the behaviour of the
urban consumers is different from that of the rural
consumers. A good number of rural consumers are
conservative in their buying behaviours.
The rich rural consumers may think twice to spend
on luxuries despite hav­ing sufficient funds, whereas
the urban consumers may even take bank loans to
buy luxury items such as cars and household
appliances. The consumer behaviour may also varies
across the states, regions and countries. It may differ
depending on the upbringing, lifestyles and level of
development.
5. Information on consumer behaviour is
important to the marketers:
Marketers need to have a good knowledge of the
consumer behaviour. They need to study the various
factors that influence the consumer behaviour of their
target customers.
a. Product design/model
b. Pricing of the product
c. Promotion of the product
d. Packaging
e. Positioning
f. Place of distribution
6. Leads to purchase decision:
A positive consumer behaviour leads to a purchase
decision. A consumer may take the decision of buying
a product on the basis of different buying motives.
The purchase decision leads to higher demand, and
the sales of the marketers increase. Therefore,
marketers need to influence consumer behaviour to
increase their purchases.
7. Varies from product to product:
Consumer behaviour is different for different products.
There are some consumers who may buy more
quantity of certain items and very low or no quantity of
other items. For example, teenagers may spend heavily
on products such as cell phones and branded wears for
snob appeal, but may not spend on general and
academic reading. A middle- aged person may spend
less on clothing, but may invest money in savings,
insurance schemes, pension schemes, and so on.
8. Improves standard of living:
The buying behaviour of the consumers may lead to
higher stan­dard of living. The more a person buys the
goods and services, the higher is the standard of
living. But if a person spends less on goods and
services, despite having a good income, they deprives
themselves of higher standard of living.
9. Reflects status:
The consumer behaviour is not only influenced by the
status of a consumer, but it also reflects it. The
consumers who own luxury cars, watches and other
items are considered belonging to a higher status. The
luxury items also give a sense of pride to the owners.
Factors Influencing Consumer Behaviour

Some of the most important factors influencing

consumer behaviour are as follows:
 A. Marketing Mix Factors
B. Personal Factors
C. Psychological Factors
D. Social Factors
 E. Cultural Factors.
In general, the factors that affect consumer behaviour
are discussed in the following sections:
A. Marketing Mix Factors:
Each component of the market mix—product,
pricing, promotion and place of distribution—has a
direct or indirect impact on the buying process of the
consumers.
1. Product:
The special characteristics of the product, the
physical appearance and the packaging can influence
the buying decision of a consumer.
2. Pricing:
The price charged on the product or services
consumed by the consumer affect the buying
behaviour of the consumers. Marketers must consider
the price sensitivity of the target customers while
fixing prices.
3. Promotion:
The variables of promotion mix such as advertising,
publicity, public relations, per­sonal selling and sales
promotion affect the buying behaviour of the
consumers. Marketers select the promotion mix after
considering the nature of the target audience.
4. Place:
The channels of distribution and the place of
distribution affect the buying behaviour of the
consumers. The marketers makes an attempt to select
the right channel and distribute the products at the
right place.
B. Personal Factors:
The personal factors such as age, occupation, lifestyle,
social and economic status and the gender of a
consumer may affect the buying decisions of the
consumers individually or collectively.
1. Age factor:
The age factor greatly influences the buying
behaviour. For example, teenagers prefer trendy
clothes, whereas office executives prefer sober and
formal clothing.
2. Gender:
The consumer behaviour varies across gender. For
example, girls prefer certain feminine colours such as
pink, purple and peach, whereas boys go for blue,
black and brown.
3. Education:
Highly educated persons may spend on books,
personal care products, and so on. But a person with
low or no education may spend less on books and
more on personal grooming products.
4. Income level:
Normally, the higher the income level, the higher is
the level of spending and vice versa. But this may not
be the case in developing countries, especially in the
rural areas.
5. Status in the society:
Persons enjoying higher status in the society spend a
good amount of money on luxury items such as
luxury cars, luxury watches, premium brands of
clothing, jewel­lery and perfumes.
C. Psychological Factors:
A person’s buying behaviour is influenced by the
psychological factors such as the following:
1. Learning:
It refers to changes in individual behaviour that are
caused by information and experi­ence. For example, when
a customer buys a new brand of apparels, and is satisfied
by its use, then they are more likely to buy the same
brand the next time. Through learning, people acquire
beliefs and attitudes, which in turn influence the buying
behaviour.
2. Attitude:
It is human tendency to respond in a given manner to
a particular situation or object or idea. Consumers
may develop a positive, or a negative, or a neutral
attitude towards certain products or brands, which in
turn affects their buying behaviour.
3. Motives:
A motive is the inner drive that motivates a person to
act or behave in a certain manner. A marketer must
identify the buying motives of the target customers
and influence them to act posi­tively towards the
marketed products.
a. Pride and possession
b. Love and affection
c. Comfort and convenience
4. Beliefs:
A belief is a descriptive thought that a person holds
about certain things. It may be based on knowledge,
opinion, faith, trust and confidence. People may hold
certain beliefs of certain brands/products. Beliefs
develop brand images, which in turn can affect the
buying behaviour.
D. Social Factors:
The social factors such as reference groups family,
and social status affects the buying behaviour. Social
factors in turn reflect a constant and dynamic influx
through which individuals learn different meanings of
consumption.
1. Reference groups:
A reference group is a small group of people such as
colleagues at workplace, club members, friends circle,
neighbours, family members, and so on.
a. They influence members’ values and attitudes.
b. They expose members to new behaviours and
lifestyles.
c. They create pressure to choose certain products or
brands.
2. Family:
The family is the main reference group that may
influence the consumer behaviour. Nowadays,
children are well informed about goods and services
through media or friends circle, and other sources.
Therefore, they influence considerably in the
decisions of buying both fast moving consumer goods
and durable items.
3. Roles and status:
A person performs certain roles in a particular group such
as family, club, organization, and so on. For example, a
person may perform the role of a vice president in a firm
and another person may perform the role of a marketing
manager.
The vice president may enjoy higher status in the
organization as compared to the marketing manager.
People may purchase the products that conform to their
roles and status, especially in the case of branded clothes,
luxury watches, luxury cars, and so on.
E. Cultural Factors:
There is a subtle influence of cultural factors on a
consumer’s decision process. Consumers live in a
complex social and cultural environment. The types
of products and services they buy can be influenced
by the overall cultural context in which they grow up
to become individuals. Cultural factors includes race
and religion, tradition, caste and moral values.
Culture also includes subcultures, sub-castes,
religious sects and languages.
1. Culture:
It influences consumer behaviour to a great extent.
Cultural values and elements are passed from one
generation to another through family, educational
institutions, religious bodies and social environment.
The cultural diversity influences food habits, clothing,
customs and traditions. For example, consuming
alcohol and meat in certain religious communities is
not restricted, but in certain communities,
consumption of alcohol and meat is prohibited.
2. Subculture:
Each culture consists of smaller subcultures that
provide specific identity to its members. Subcultures
include sub-castes, religious sects (Roman Catholics,
Syrian Catholics, Protestant Christians, etc.),
geographic regions (South Indians, North Indians)
and language (Marathi, Malayali, Gujarati).
The behaviour of people belonging to various
subcultures is different. Therefore, marketers may
adopt multicultural marketing approaches, that is,
designing and marketing goods and services that
cater to the tastes and preferences of the consumers
belonging to different subcultures.
Consumer Buying Decision Process

Consumer buying decision process are as follows:

1. Problem Identification
2. Information Search
3. Listing Alternative Brands
4. Evaluation of Alternatives
5. Purchase Decision
6. Post-purchase Behaviour.
Philip Kotler presents a six-stage model involving
consumer buying decision process.
1. Problem Identification:
The consumer buying decision process begins with
the identification of needs. These needs can be
triggered by internal and external stimuli.. The
marketer tries to stimulate the needs and help people
in identifying these needs by intelligent use of the
marketing mix variables.
2. Information Search:
When consumers identify a need, they may look for
information about how to satisfy it.
A consumer may look for information from five
general sources:
a. Internal sources:
By recalling from memory, if they have satisfied a
similar need in the past.
b. Group sources:
By consulting other people such as family members,
friends and others.
c. Marketing sources:
Through sales people, advertisement and packaging.
d. Public sources:
Through media publicity, reports of research firms.
e. Experiential sources:
By experiencing products, that is, by handling them
or by consuming or using them. For example, a
consumer may taste a particular item of fast food, and
if they likes it may make a purchase decision.
3. Listing Alternative Brands:
In this stage, the consumer analyses the information
available with them to select the right product or
brand. A consumer may list out a few alternative
brands that are available in the market. The brands
may be listed after collecting necessary information
from various sources.
The information of alternative brands may
include the following factors:
1. Features
2. Price
3. Model
4. After-sale service
5. Warranty
4. Evaluation of Alternatives:
On the basis of the available information, consumers
identify and evaluate ways to satisfy their needs. A
consumer may identify the products or brands that
effectively satisfy their needs or solve their problems,
and then evaluate each brand/product against certain
criteria such as features, price, reputation of the
company, and so on.
5. Purchase Decision:
Once the consumer has narrowed down the possible
alternatives to just a few, there may make a decision
to purchase. The consumer will decide whether to
buy, and if so, then what, where and when to buy.
Consumers may also postpone or forgo purchase
decision, if none of the shortlisted alternatives meet
their needs.
 6. Post-purchase Behaviour:
A marketer’s job is not complete with the purchase
decision by the buyer. After purchasing and
consumption, the customer will experience some level
of satisfaction. If the product meets the expectations
of the consumer, then the consumer will be satisfied.
If the performance of the product exceeds customers’
expectations, then they will be delighted, and if it falls
below the expectations, then they will be dissatisfied.
A satisfied consumer may involve in repeat
purchases. A delightful customer propagates a
positive image of the brand, whereas a dissatisfied
consumer may spread a bad image of the product or
the brand.
Thus, a study on the post-purchase behaviour gives a
learning of the way the product is used and disposed,
and helps the marketer to design their marketing mix.