Why study consumers?

•Consumers are party to the exchange process. Studying

Consumers will lead to successful exchange outcomes.
•Consumers are an important stakeholder for the business.
•Consumer purchase decisions are impacted by macro-
Environmental factors as well as competing offerings.
•Studying consumers helps a business analyse and influence
Factors affecting demand (desire backed by ability and
Willingness to pay)
 Consumer Behaviour
‘Consumer behaviour studies how individuals,
groups and organisations, select, buy, use
and dispose of goods, services, ideas or
experiences to satisfy their needs and
desires.’ (Kotler)
Engel-Kollat-Blackwell Model of Consumer Buying
 Culture
Culture is a set of values, artifacts, symbols and norms that help
Individuals communicate with each other and interpret and evaluate
Each other’s behaviour.
Influences: Race, religion, region, nation

Culture

Abstract elements: Material elements:

Values, Norms, Artifacts,
Rituals, symbols materials,
technology
Cultural factors influence every stage of the buying process.
 Social factors-Social Class
Social Classes are relatively permanent divisions in society wherein
people in the same class share similar values, lifestyles, interests,
wealth, status education and behaviour.

Family income, occupation

Income Education Occupation

Interactions Possessions
Each social class has a particular status ascribed to it based on its life
Style and positive or negative estimations of honour given to each
Class. This influences consumption.
SEC Urban
SEC Rural
 Social factors -Family
• Many products are purchased for the family as a
consumption unit
• Buying decisions are heavily influenced by family
Members who may play a variety of roles (Initiator, influencer,
Decider, buyer, user)
•A family is a ‘group of people who are related by blood, marriage
Or adoption who reside together’
•Family influence in the buying process is dependent on the extent of
Cohesion and communication within a family
•Family influences not only product/brand choice but also vendor,
Quantity and timing decisions.
 Social Factors – Reference
Groups
A reference group is a person or a group of people that influence a
buyer’s values, attitudes and behaviour.
Reference groups reduce risk of purchase and consumption and are
A trusted source of product/brand information as compared to other
Sources.
A reference group exerts influence in 3 ways:
1. Conformance: the group frames norms of behaviour which
Includes consumption of products and individuals are expected to
Conform to group norms.
 Reference groups – Contnd.
2. Information: Providing information on product/brand benefits and
Criterion for evaluation (experts)
3. Aspirations: Sometimes buyers are influenced by a group to which
They do not belong but aspire to belong to. (filmstars, sports persons
Buyers may simultaneously belong to several reference groups and
Marketers have to find out which one yields more influence for their
Product.
Marketers also want to know the type of influence exerted by the
Reference group and profile of the person/s (opinion leaders)
Exerting this influence. Opinion leaders are early adopters of the
Product who have a lower risk perception of product purchase and
Usage.
 Innovation Diffusion Process

Innovation diffusion based on: Relative advantage, compatibility,

complexity, ease of usage, observable benefits
 Demographic factors
• Age (‘physical’ and ‘psychological’ ?)
• Income
• Occupation
• Gender
• Family size and stage in life cycle
• Geographic location
Impact of demographic factors cannot be isolated
from other factors
 Psychological factors
Learning: It is a relatively permanent change in behaviour
Resulting from past experience. It influences the way a person
Perceives the world around her in terms of people, objects
Their context. (I-pod, search engines). Attitudes/beliefs
A positive experience of product purchase and usage results in
Positive reinforcement and vice versa. Marketers through their
Marketing mix want to influence learning.
Marketers can:
1. Understand the context (environment) in which decisions are
made
2. Provide stimuli to create a favourable response
3. Influence the process of cognition (problem solving)
4. Understand processes of generalizing and discrimination and give
appropriate cues. ( Dettol dishwash liquid, Panasonic AC)
 Motivation
• A need becomes a motive when it is aroused to a sufficient level of
intensity to drive us to act(search for information, evaluate, purchase)
• Motive implies that we may select one need over another (buyers are
selecting SUVs over sedans as the need for looking good is more
important than driving comfort or cost saving)
• 3 prominent theories are by Freud (laddering technique that traces
instrumental to terminal motivations; means end chain borrows from
this), Maslow and Herzberg.
• Herzberg’s theory connects product features and benefits to motives.
Product features may be categorized as dissatisfiers (their presence
does not motivate purchase but their absence leads to dissatisfaction)
and satisfiers (their presence motivates purchase)
 How are problems (needs) recognised?
The ‘means-end chain’ (Gutman, Peter,
et al) Super-ordinate need
Have a good social life Feel confident
Feel positive

Can wear trendy clothes Feel energetic

Look good Need

Exercises for Body toning Better diet

Weight loss Benefit

Weight management programme

 How are problems (needs) recognised?
The ‘means-end chain’ (Gutman, Peter,
et al Div A) Super-ordinate need
Feel energetic? Social acceptance, attractive to opposi
speak confidently Feel energetic?

Good appearance, good Can eat well

smile Fresh breath Need

Cleaning teeth Reducing plaque, freshness Strong gums, strong teeth

Benefit

Toothpaste
How are problems (needs) recognised?
The ‘means-end chain’ (Gutman, Peter,
et al) Div C Super-ordinate need
Confidence, status Social acceptance
F

Attractiveness, smell Blocking odour

Personal grooming
good Need

Long lasting Unique fragrance Brand name

Benefit

Deodorant
 Lifestyle, Personality and Self Concept
Lifestyle: Pattern of living as expresses through activities, interests and
opinions.
Personality: A person’s distinguishing psychological characteristics that
lead to consistent and enduring responses to environment.
Research reveals following personality traits: self-confidence, dominance,
autonomy, deference, sociability, defensiveness, adaptability.
Brands personify themselves by creating a brand image and establish
correlations between themselves and personality types. Useful in
segmentation.
Self Concept: How a person sees herself/himself. 3 levels – actual,
ideal and others. Consumers may address a particular self concept
through product choices. E.g. clothing
 Awareness of needs and wants
•Consumers motivations for purchasing a product are often
Complex and are not visible or discernable not only to
Marketers but often to consumers themselves.
•Marketers can make consumers aware of needs by using
Various stimuli . (bad breath, body odour)

•Needs change across life stages and are also influenced by

Psychological and social factors.
 Information search
•At this stage the consumer searches for solutions to her problem/
Need.
•How much search a consumer undertakes depends on
-urgency of problem
-how much information she already has
-Ease of obtaining information
-time available to conduct search
-level of involvement in the purchase decision
•The consumer may conduct an
-internal search: recall past experiences/info on product
-external search: friends, relatives, magazines, TV, newspaper, etc.
In short, consumers may use a combination of personal as well non personal
sources; and commercial as well as non-commercial sources
Two significant stages are : Heightened attention and Active Information
Search
 How do consumers process
information?
• Receiving information – attention
• Storing and retrieving information –
comprehension and integration
• Forming attitudes
• Drawing inferences
 Evaluation of alternatives
•Giving weightage to product attributes
•Trade offs between attributes given limited resources
•Salient and determinant attributes
•At this stage consumers form attitudes towards the product
And brand
•Evaluation influenced by social and psychological factors
• During this process product solutions are divided into sets:
1. Evoked/Awareness set
2. Consideration set
3. Choice set
•Marketing communication influences the evaluation process.
 Evaluation of Alternatives: What should
Marketers do to be in Choice Set
• Modify Product features: Toothpaste
• Alter beliefs about brand: Brittania
• Alter Beliefs about competitor brand: Salt
• Alter the weightage given to product features: privacy
factor in mobile phones, ease of getting a loan disbursal
• Call attention to neglected attributes: Bata ambassador
shoes
• Shift buyer ideals: Ac that consumes less power, self
regulates
 Purchase decision and actual
purchase
•After evaluating alternatives consumers may discontinue the
Buying process or take a decision to purchase.
•Purchase decision may be influenced by
-attitudes of others
-situational factors
•Purchase decision is essentially about ‘product’ and ‘brand’ but
There are important sub decisions such as: vendor, quantity, timing
Payment method.
 Post purchase evaluation
Post purchase evaluation can lead to a feeling of satisfaction or
Dissatisfaction.

Feelings of dissatisfaction in the period immediately after

Purchase are often the result of a phenomenon called ‘cognitive
Dissonance’.
 Decision making in the buying
process
• Decision making in the buying process depends on
the degree of involvement in the buying situation
• ‘Involvement’ is determined by
-functional importance of product
-financial importance of the product
-Perceived risk of purchase
-emotional value attached to product category
-social significance of product
Types of Buying Behaviour