Consumer Behaviour

Dr Ajitabh Dash
Definition (1st school of Thought)
 “The behavior that consumers display in searching
for, purchasing, using, evaluating and disposing of
products and services that they expect will satisfy
their needs.”
 A "consumer" is anyone who typically engages in any
one or all of the activities described in the above
definition.
 Consumer Behavior includes all the decisions a
consumer makes when spending their time, effort and
money.
Scope
 Includes answers to the following:
 ‘What’ the consumers buy: goods and services
 ‘Why’ they buy it: need and want
 ‘When’ do they buy it: time: day, week, month, year,
occasions etc.
 ‘Where’ they buy it: place
 ‘How often they buy’ it: time interval
 ‘How often they use’ it: frequency of use
Second School of Thought
 Consumer behaviour is the set of value-seeking activities
that take place as people go about addressing realised
needs.
value-seeking activities=Basic Exchange
process
Role of Marketers
 Two Consumer Entities

Personal Consumer Organizational Consumer

• The individual who • A business, government

buys goods and services agency, or other
for his or her own use, institution (profit or
for household use, for nonprofit) that buys the
the use of a family goods, services, and/or
member, or for a friend. equipment necessary
for the organization to
function.
Components
 Buying roles
 Decision making
 Actual purchase
 Individual determinants
 Environmental influences
Buying roles of personal consumer
There are five buying roles
 Initiator
 Influencer
 Decider
 User
 Buyer
Example:
 The lady of a house who is a housewife and spends her
day at home doing household chores watches TV in her
free time. That is her only source of entertainment. The
TV at home is giving problem. She desires a new TV set,
and says that she wants an “Smart TV”. Now the roles
played are:
 Initiator: the housewife (mother)
 Influencer: a friend / neighbour
 Decider: the husband or the son
 Buyer: the husband or the son
 User: the family
Activity
 A child goes to a kindergarten school. She comes back
home and asks her parents to buy her a set of color pencils
and crayons. Now identify:
 Initiator
 Influencer
 Decider
 User
 Buyer
Buying roles (Organisational Consumer)

 Users like production department person

 Influencers like Managing Director, Design Engineers or
Consultants
 Deciders like the committee appointed by the company
 Buyers like the people from the purchase or materials
department
 Gatekeepers like those who can control the flow of
information within an organisation
 Specifiers like consultants or design or production people who
may develop the specifications of the product or services
needed.
Consumer decision making Process

Dr Ajitabh Dash
Definition
 Defined as the “process involved in analyzing problems,
searching solutions, evaluating and choosing among
alternatives and evaluating outcomes”.
 Often called the consumer information processing model
MODELS OF CONSUMERS
 Economic:- Price sensitive and rational
 Passive : irrational and impulsive, easily succumbs to the
selling and promotional efforts of the marketer.
 Cognitive :-Consumer decisions are based on information
gathering and processing
 Emotional : emotional and impulsive, takes decisions
based on emotions
Steps in Decision-Making Process

Problem Recognition

Information Search

Evaluation
of Alternatives

Purchase

Post purchase
Behavior
Problem Recognition: perceiving a need
 A stage of perceiving a deficiency/need. A need could be
triggered off by an internal stimulus or an external
stimulus. Consumer may face two types of problem.
 Actual State changes (AS type): - the product is failing, or the
consumer is running short of it; - there is a problem that exists.
 Desired State changing (DS type): - there is an imbalance
between the actual state and the desired state - another product
seems better and superior to the one that is being currently
used.
Information search : seeking value
 Defined as the actions taken to identify and obtain
information to solve a consumer problem.
 Internal Source: the retrieval of information from long-term
memory
 External Source: acquiring information from outside sources
 Personal sources, such as friends and family.
 Public sources, including various Consumer
informatics center.
 Marketer-dominated sources, such as
advertising, company websites, and salespeople
Outcome of Information Search
Evoked Set
• Group of brands,
resulting from
information search, from
which a buyer can
choose.

Purchase!
Evaluation of alternative : Assessing Value
 Compares the different alternatives available on certain
criteria mentioned as below:
i) Generation of choice set;
ii) Application of Decision Rules.
Generation of Choice Set
 Consumer moves from an evoked set towards the choice set.
 Evoked set/Consideration set: This is the set of alternatives
that he actively considers while making a purchase decision;
these exist either in his memory or feature prominently in the
environment. The consumer perceives them to be acceptable.
 Inept set: These are those alternatives from the evoked set that
the consumer excludes from further consideration, as he
perceives them to be inferior and unacceptable.
 Inert set: These are those alternatives from the evoked set that
the consumer excludes from further consideration, as he is
indifferent towards them and perceives them as ones without
much advantages or benefits.
 Choice set: This comprises the final set of one or two brands
from which he finally decides.
Application of Decision Rules
 There can be two kinds of Decision Rules, viz.,
Compensatory rules and Non-compensatory rules.
 Compensatory rules
 Non-compensatory rules
 Conjunctive rule: A minimally acceptable cut off point is established
for each attribute.
 Disjunctive rule:
 Lexicographic rule: First ranks the attributes in terms of relevance.
Then compares the various alternatives in terms of a single attribute
considered most important.
Purchase decision: Buying value
 Trials/First purchase: Trials could be elicited through
market testing, or through promotional tactics such as free
samples, coupons, etc.
 Repeat purchases: If the consumer is satisfied, he would
buy the brand again. Repeat purchases lead to brand
loyalty.
a) where to buy from? (Place: Real/brick and mortar or
virtual/online);
b) whom to buy from? (Which store: Depends on reputation
of seller, past experience, etc.)
b) when to buy? (Time: Emergency or Routine; During
season, off season, sale, rebate etc.)
Post purchase evaluation : Value in
Consumption or Use
 After buying a product, consumer compares it
with expectations and is either satisfied or
dissatisfied.
 Satisfaction or dissatisfaction affects
 consumer value perceptions
 consumer communications
 repeat-purchase behavior.
Cognitive Dissonance

• Inner tension that a consumer experiences after

recognizing an inconsistency between behavior
and values or opinions.

?
Did I make a good
decission ? Can minimize
through:
Did I buy the right Effective
product ? Communication
Follow-up
Did I get the value ? Guarantees
Warranties
 Stage in
Marketers
Buying
objective
Process

Need Generate
awareness,
Recognition Positioning

Information Lead
Search Generation

Evaluation of Assist purchase

Alternative decision

Purchase Facilitate
purchase

Sales support,
Post-purchase
relationship
Evaluation marketing
Variations in purchase decision process

 Three general problem-solving variations exist in the

consumer purchase decision process:

Routine Limited Extensive

Response Decision Decision
Behavior Making Making

LessLess High
involvement
Involvement involvement
Routine response behaviour
 Involves little effort seeking external
information and evaluating alternatives.
 Typically used for low-priced, frequently purchased
products.
 Examples :- tooth paste, soap, milk etc.
Limited decision making
 Involves the use of moderate information-seeking efforts.
 Often used when the buyer has little time or effort to
spend.
 Example :- shopping goods like digital camera.
Extensive decision making
 Each stage of the consumer purchase decision
process is used
 Considerable time and effort on external
information search and in identifying
and evaluating alternatives.
 Example :- house, car etc
The study of CB helps the marketer in:
 Analyzing the environment: identifying opportunities and
fighting threats
 Segmenting, targeting and positioning
 Designing the marketing-mix
 Designing the competitive strategy
 Governmental and Non-profit Organization and Social
Marketing
Simple Out line of Consumer Behaviour