1.

1 Introduction to Consumer
Behavior
Learning Objectives

❑ To understand what Consumer Behavior is?

❑ To know different types of Consumers.
❑ To understand the relationship Between Consumer
Behavior and Marketing Concepts.
What is Consumer Behavior?

The behavior that consumers

display in searching for,
purchasing, using, evaluating, and
disposing of products and services
that they expect will satisfy their
needs.
This includes……
❑What they buy?
❑Why they buy?
❑When they buy?
❑Where they buy?
❑How often they buy?
❑How often they use it?
❑How they evaluate it after the
purchase?
❑How they dispose it?
Two Consumer Entities-
✔Personal ✔Organizational
consumer consumer
 Personal Consumer
The individual who buys goods and
services for his or her own use, for
household use, for the use of a family
member, or for a friend.
 Organizational Consumer
Includes profit and non profit
businesses, government agencies &
institutions, all of which must buy
services in order to run their
organizations.
 Reflection Spot

Can you tells some differences

between personal consumers and
organizational consumers?
Development of the Marketing Concept

Production Product Selling Marketing

Concept Concept Concept Concept
 The Production Concept

▪ From the 1850s to the late 1920s.

▪ Companies focus on production capabilities.
▪ Assumes that consumers are interested
primarily in product availability at low prices.
▪ Marketing objectives:
⮚Cheap, efficient production
⮚Intensive distribution
⮚Market expansion
 The Product Concept
▪ Assumes that consumers will buy the
product that offers them the highest
quality, the best performance, and the
most features.
▪ Marketing objectives:
⮚ Quality improvement
⮚ Addition of features
⮚Tendency toward Marketing Myopia
 The Selling Concept
▪ Assumes that consumers are unlikely to
buy a product unless they are
aggressively persuaded to do so.
▪ Marketing objectives:
⮚Sell, sell, sell
⮚Lack of concern for customer needs
and satisfaction
 The Marketing Concept
▪ Assumes that to be successful, a
company must determine the needs and
wants of specific target markets and
deliver the desired satisfactions better
than the competition.
▪ Marketing objectives:
⮚Profits through customer satisfaction.
Reflection Spot
1. Can you name few companies which
were having an intuitive understanding
of Consumer Behavior before the
evolution of the marketing concept?
2. Why do you believe so?
 Implementing the Marketing Concept
The widespread adoption of the marketing
concept by business firms provided the
impetus for the study of consumer
behaviour.
❑Consumer Research- The process and tools
used to study consumer behaviour.

❑Segmentation -Process of dividing the

market into subsets of consumers with
common needs or characteristics

❑Market Targeting -The selection of one or

more of the segments identified to pursue

❑Positioning-Developing a distinct image for

the product in the mind of the consumers.
Marketing Mix & Consumer
Behavior
PRODUCT

PLACE

PRICE

PROMOTION
The Importance of Marketing Mix

Not only important in combination

but also in the timing of such
combinations .
Focus Questions???????
❑Name few products that you
regularly purchase which are highly
segmented?
❑ What are the different segments
they cater to?
❑ How marketer for these products
are benefitted by segmentation?
1.2 Drivers of Successful Relationship
 Learning Objectives

❑ To understand the Relationship between Consumer

behavior and Customer Value, Satisfaction, Trust, and
Retention.
❑To understand the interdisciplinary nature of consumer
behaviour.
❑To understand the nature and scope of Consumer
Behavior .
❑To know the application of Consumer Behavior
Drivers of Successful Relationship

Customer Value, Satisfaction,

Trust, and Retention
 Customer Value

❑It is the value between the customers

perceived benefits (economical, functional &
psychological)and the resources (monetary,
time, effort, psychological) used to obtain
those benefits.
❑Perceived Value is relative and subjective.
❑Developing a value proposition is critical.
 Customer Satisfaction
It is the individual consumer’s perception
of the performances of the product or
service in relation to his or her
expectations.
 Customer Trust

Trust is the foundation for

maintaining a long standing
relationship with customers.
 Customer Retention

Customer retention is designed to make it in the

best interest of customer to stay with the
company rather than switch to another
company.
Loyal customers are key because-
✔They buy more products
✔They are less price sensitive
✔ Servicing them is cheaper
✔They spread positive word of mouth
This study draws on concepts from
various other disciplines
❑Psychology (the study of the
individuals)
❑Sociology (the study of groups)
❑Anthropology (the influence of society
on the individuals)
❑Economics
❑Marketing
Interdisciplinary Influences
Individual Focus

Experimental Psychology
Clinical Psychology
Developmental Psychology
Human Ecology
Microeconomics
Social Psychology
Sociology
Macroeconomics
Demography
History
Cultural Anthropology

Social Focus
 Nature of Consumer Behavior
❑The subject deals with issues related to
cognition, affect and behavior in consumption
behaviors, against the backdrop of individual
and environmental determinants.
❑The subject can be studied at micro or macro
levels depending upon whether it is analyzed at
the individual level or at the group level.
❑The subject is interdisciplinary.
❑Consumer behavior is dynamic and interacting
in nature.
Cont…

❑Consumer behavior involves the process of

exchange between the buyer and the seller,
mutually beneficial for both.
❑As a field of study it is descriptive and also
analytical/ interpretive.
❑It is a science as well as an art.
 Scope of Consumer Behavior
The study of consumer behavior deals with
understanding consumption patterns and behavior. It
includes within its ambit the 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
 Application of Consumer
Behavior

❑Marketing Strategy
❑Regulatory Policy
❑Social Marketing
❑Informed Individuals
❑Demarketing
 The advice to footwear salesmen
should be
‘Don’t sell shoes – sell lovely feet’
Marketers must contend with small changing
segments of highly selective buyers intent on
receiving genuine value at the lowest price.
Focus Questions???????
Discuss the impact of digital
technologies on marketing strategies
Overview of Consumer Decision Process
 Learning Objectives

❑ To understand the model of Consumer Behaviour.

Reflection Spot
What are the different stages you go through while
buying a:

❑Laptop
❑Mobile phone
❑A Notebook
❑Coffee
The process of consumer decision making can be
viewed as three distinct but interlocking stages:
❑The input stage
❑The process stage
❑The output stage
The input stage:
The input stage influences the
consumer recognition of a product
need and consists of two major sources
of information :
▪ the firm marketing effort and
▪ external sociological influences on
the consumer
The process stage:
The process stage of the model
focuses on how consumer make
decisions. The psychological factors
inherent in each individual affect how
its external inputs from the input stage
influences the consumer’s recognition
of need, pre purchase search for
information and evaluation of
alternatives.
 The output stage:
The output stage of the consumer
decision making model consists of two
closely related post decision activities-

▪ Purchase Behaviour and

▪ Post Purchase Evaluation
Focus Questions???????
Describe in detail the process of consumer
decision making process with the help of an
example of your choice.
 MOTIVATION

Whatever you do will be insignificant, but it is important

that you do it
 MOTIVATION

Whatever you do will be insignificant, but it is important

that you do it
https://in.video.search.yahoo.com/search/video?fr=crmas&p=marketi
ng+myopia#id=1&vid=2597a565f7a655a1597dd75a4fc2facb&action=cl
ick
Reflection Spot
What is the basis of all modern marketing?????
 What is Motivation?

Process which begins with a physiological or psychological need or deficiency

which triggers a behaviour or a desire that is aimed at a goal or an incentive.

• Needs Drives Incentives

All the internal conditions that stir up activity and sustain activity of an
individual.
• Starts and sustain activities

Motivation is a driving force within individuals that impel them to action.

• Force Action
 NEEDS
Every individual has needs. Some
are innate & others are acquired.
Needs are the essence of the
marketing concept. Marketers do
not create needs but can make
consumers aware of needs.
Types of Needs

Innate Needs
Physiological (or biogenic) needs that are considered primary
needs or motives.

Acquired Needs
Learned in response to our culture or environment. Are
generally psychological and are considered secondary needs.
Reflection Spot
Is a body spray an
innate
or
acquired need?
 GOALS
The sought-after results of motivated
behavior.
❑Generic goals are general categories
of goals that consumers see as a way to
fulfill their needs.
❑Product-specific goals are specifically
branded products or services that
consumers select as their goals
Goals Structure for Weight
Control
The Selection of Goals

The goals selected by an individual depend

on their:
❑Personal experiences
❑Physical capacity
❑Prevailing cultural norms and values
❑Goal’s accessibility in the physical and
social environment.
Substitute Goals

❑Are used when a consumer cannot attain a

specific goal he/she anticipates will satisfy a
need.
❑The substitute goal will dispel tension.
❑Substitute goals may actually replace the
primary goal over time.
Reflection Spot
 THINK?????
INDERDEPENDENCE OF NEEDS
AND GOALS
 MOTIVES
A motive corresponds to a want or
a preference that is sufficiently
strong that it moves us to action or
deliberate inaction.
Positive and Negative Motivation
Motivation can be positive or
negative in direction. We may feel a
driving force towards some object
(positive motivation)or condition or a
driving force away from object or
condition(negative motivation).
Rational versus Emotional Motives

❑Rationality implies that consumers select

goals based on totally objective criteria such
as size, weight, price.
❑Emotional motives imply the selection of
goals according to personal or subjective
criteria.
 Discussion Questions
❑What products might be purchased
using rational and emotional motives?
❑What marketing strategies are
effective when there are combined
motives?
Arousal of Motives

❑Physiological arousal
❑Emotional arousal
❑Cognitive arousal
❑Environmental arousal
The Dynamic Nature of Motivation

⮚Needs are never fully satisfied.

⮚New needs emerge as old needs are satisfied.
⮚Success and failure influence goals-People
who achieve their goals set new and higher
goals for themselves.
Reflection Spot
What is feeling that results
from failure to achieve a
goal????
 Frustration and Defense
Mechanisms
❑Frustration is the feeling that results from failure to
achieve a goal and defense mechanisms are cognitive
and behavioural ways to handle frustration.
❑The barrier that prevents attainment of a goal may be
personal (for e.g. limited physical or financial resources)
or an obstacles in the physical or social environment(e.g.
Covid19 may postpone your long awaited vacation).
❑Regardless of the cause , individual react differently to
frustrating situation.
•AGGRESSION
•In response to frustration, individuals may resort to aggressive
behaviour in attempting in attempting to protect their self-
esteem .

•RATIONALIZATION
•Using excuses to explain away threatening circumstances
•REGRESSION
•An individual may react to a frustrating situation with childish or
immature behaviour.
•WITHDRAWAL
•In response to frustration, individuals may withdraw from the
situation.
•PROJECTION
•An individual may redefine a frustrating situation by projecting
blame for his/her own failures and inabilities on other objects or
persons.
•DAYDREAMING
•Daydreaming enables the individual to attain imaginary
gratification of unfulfilled needs.
•IDENTIFICATION
•People resolve feeling of frustration by subconsciously identifying
with others persons or situations that they consider relevant.
•REPRESSION
•Another way that individual avoid the tension arising from
frustration is by repressing the unsatisfied need. Thus, individual
may “force” the need out of their conscious awareness.
Identifying
Lets watch a video……

https://www.youtube.com/watch?v=Wfe
LzjqXemw
What type of defense
mechanism is this?
AGGRESSION
Focus Question !!!!!
 Find two advertisements that
depicts two different defense
mechanisms and discuss their
effectiveness.
 3 Groups of Motivational
Theories
Internal Suggest
that
variables
within
Example:
the
Maslow’s
individual
hierarchy
give rise
of needs
Process to
Emphasiz
theory
motivatio
e the
n and of
nature
behavior
the
Example:
interactio
Expectan
n
cy theory
between
External the
Focus on
individual
environm
and the
ental
environm
elements
Example:
ent.
to explain
Two-
behavior.
factor
 HIERARCHY OF NEEDS THEORY

Given by ABRAHAM MASLOW

Needs were categorized as five levels of lower-higher-order needs.

Individual must satisfy lower-level needs before they can satisfy higher
order needs.

Satisfied needs will no longer motivate

Motivating a person depends on knowing at what level that a person is on

the hierarchy
 HIERARCHY OF NEEDS THEORY
SELF-
ACTUALIZATION

ESTEEM NEEDS

SOCIAL NEEDS

SAFETY NEEDS

PHYSIOLOGICAL OR SURVIVAL NEEDS

HIERARCHY OF NEEDS THEORY
Example
•Relevance of Maslow’s Theory for Managers
•Effective managers can anticipate emerging needs based on individual need profiles and
provide opportunities for fulfilment
•The esteem level of needs satisfied by jobs and recognition provides managers with the
greatest opportunity to motivate better performance
Identify the type of NEED??????
 TWO-FACTOR THEORY
On the basis of research with engineers and accountants, Frederick Herzberg in the
1950’s developed the Two Factor Model for Motivation

•Two factor model

Maintenance & Motivational Factors

Two-factor theory
 Two-factor theory
Motivation factors increase
✔ Company policy & job satisfaction
administration
✔ Supervision
✔ Interpersonal Relations ✔ Achievement
✔ Working conditions ✔ Achievement recognition
✔ Salary ✔ Work itself
✔ Status ✔ Responsibility
✔ Security ✔ Advancement
✔ Growth
Hygiene factors avoid
job dissatisfaction
 Two-factor theory- PROBLEMS

It ignores situational variables.

No overall measure of satisfaction was utilized.

The reliability of Herzberg methodology was questioned.