CONSUMER

BEHAVIOR
Khan Burhan Khan
TITLE:
"Understanding Consumer Behavior:
Unraveling the Consumer Mind"
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CONSUMER
BEHAVIOR
DEFINITION
 Consumer behavior is the study of how individuals make decisions to spend their
available resources such as money, time, and effort on consumption-related items.
 Consumer behavior, in the academic context, refers to the study of how
individuals, groups, or organizations make decisions and engage in activities
related to acquiring, using, and disposing of goods, services, experiences, or ideas
to satisfy their needs and desires. This field of study draws upon various
disciplines, including psychology, sociology, economics, and marketing, to
understand and analyze the processes and factors that influence consumers'
choices and actions in the marketplace.
 ORIGINS OF
CONSUMER
BEHAVIOR
Economic theory (from production-driven to
market-driven)
Behavioral sciences (e.g. psychology, social
psychology, anthropology, sociology)
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ORIGINS OF CONSUMER
BEHAVIOR
• Consumer behavior evolved as a field of inquiry after WWII as a result of environmental factors which encouraged
the need for formal theories and models of buyer behavior.

• Competitive growth leads to a situation where productive capacity outstrips demand, thus motivating a
widespread turn to the marketing concept.

• Television emerged as the ‘great salesperson’. When combined with other media the mass communication age
hit full speed.

• Distribution underwent a virtual revolution: the emergence of shopping centres and discount houses. Potential
buyers could purchase with convenience and ease.
• Manufacturers use advertising and mass media power to pull new products through the channel of distribution,
and distributors had little choice but to comply.

• Economic growth burgeoned and the Western world experienced an unprecedented period of wealth and buying
power.
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WHAT IS CONSUMER BEHAVIOR

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THE CONSUMER DECISION-

MAKING PROCESS
• Problem Recognition
• Information Search
• Evaluation of Alternatives
• Purchase Decision
• Post-Purchase Evaluation
LEVELS OF CONSUMER DECISION MAKING
RoutineResponse
Routine Response Limitedproblem-
Limited problem- Extensiveproblem-
Extensive problem-
behaviour
behaviour solving
solving solving
solving
Low-cost products More expensive products

Frequent purchasing Infrequent purchasing

Low consumer High consumer

involvement involvement
Unfamiliar product
Familiar product class class and brands
and brands
Little thought, search or Extensive
time given to purchase
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MODELS OF CONSUMERS
Different Perspectives as to how individuals make decisions:

• Economic: rational decision maker, perfect decisions. This view is unrealistic

• Passive: submissive to promotional efforts, impulsive, irrational shoppers. This view is limited.

• Cognitive: consumer as thinking problem solver, information processor to make satisfactory choice (goal

directed behaviour)

• Emotional: Purchases and products are linked to consumers feelings and moods. Shopping therapy, self-gifting.
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MODELS OF CONSUMERS

• Cognitive: consumer as thinking problem solver, information processor to make satisfactory choice (goal
directed behaviour)

• Emotional: Purchases and products are linked to consumers feelings and moods. Shopping therapy, self-
gifting.
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1. PROBLEM RECOGNITION
• The Ideal State:
Where We Want to Be

• The Actual State:

Where We Are Now
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1. PROBLEM RECOGNITION
• A consumer recognises that there is a perceived problem to be solved. The
problem can be small or large, simple or complex.
• Need recognition can occur by a consumer running out of a product, or by the
creation of a new need, e.g. after decorating a room replacement furnishings
to match new colour scheme.
• Marketers attempt to create:
• - Primary Demand: encourage consumers to use products regardless of
the brand they choose.
•
- Secondary Demand: encourage consumers to prefer one brand over
another.
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2. INFORMATION SEARCH
1. Pre-purchase Search
-Search for information after a need is recognised
2. On-going Search
-Browsing for fun or keeping up to date with the marketplace
3. Internal Vs External Search
-Information from prior experiences or external from other sources
4. Deliberate Vs Accidental Search
-Knowledge via directed learning or passively learned through
incidental learning (e.g. advertising exposure, packaging, sales
promotions)
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INTERNAL SEARCH
• What Kind of Information is Retrieved from Internal Search?

• Recall of Brands (e.g. familiarity, usage situation, preference)

• Recall of Attributes (importance, vividness)
• Recall of Evaluations (like-dislike)
• Recall of Experiences (positive-negative)
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EVALUATION OF ALTERNATIVES
 Much of the effort that goes into a purchase decision occurs at the stage where a
choice must be made from alternatives.

 The alternatives actively considered are known as the evoked set.

 These comprise those products already in memory (the retrieval set) plus those
prominent in the retail environment.

 Marketers want their products to be in the evoked set

EVALUATION OF ALTERNATIVES
All brands in product class

Unknown brands Known brands

Brands Brands Brands Unrecalled

found found through recalled brands
accidentally search from memory

Inept set Inert set Consideration Choice

(unacceptable) (indifference) set

JUDGMENT AND DECISION MAKING

(Hoyer and McInnis 2004)

CONSUMER DECISION RULES
5 Rules to make a decision ; these rules can be combined
Compensator Conjunctive Disjunctive Lexicographi Affect
y c referral
(from
memory)
Balance the Select the Select the Select an Choose the
good and bad option that option that attribute option with
ratings and has no bad has at least that is the the perceived
select the best features one excellent most highest
option feature important overall
and choose rating
the option
that ranked
the highest
on that
attribute
 Reality of Consumer
Decision Making

ALL
ALTERNATIVES

SURVIVING
NON- ALTERNATIVES
COMPENSATORY
COMPENSATORY
EVALUATION
EVALUATION
 PURCHASE BEHAVIOUR
Trial Purchases

Repeat Purchases

Long-term Commitment Purchases

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 POST-PURCHASE EVALUATION
Cognitive dissonance (reassure one’s self of decision)

Three Possible Outcomes

Cognitive dissonance (reassure one’s self of decision)

Three Possible Outcomes

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Cultural Sociological Economic
Social class structure
Cultural beliefs Price, Delivery,
Family/group influence
and values, Payment terms, sales
life-cycle, opinion
life-styles service etc...
leadership

Individual Psychological Factors

Cognition, Learning processes,

Interpersonal response traits,
motivations, personality theories
Involvement, Perceived risk

The complex pattern

of buying influences

BUYING PROPOSITION
PRODUCT OR SERVICE
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FACTORS INFLUENCING
CONSUMER BEHAVIOR.

 Psychological Factors
 Social and Cultural Influences
 Economic Factors
 Marketing and Advertising Influence
 Technology and Digital Influence
 Ethical and Sustainable Considerations.
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ALTERNATIVE PERSPECTIVES
OF CONSUMER BEHAVIOR
5 alternative perspectives of consumer behavior (Marsden and Littler
1998)

• Cognitive perspective (researchers investigate consumers’

information processing, e.g. mental process, store & retrieval and
use of information in the decision-making process).

• behavioral perspective (Stimulus-Organism –Response or ‘black

box)
 ALTERNATIVE PERSPECTIVES OF 24

CONSUMER BEHAVIOR

Trait perspective (behavior of consumer is a result of enduring personality

characteristics, e.g., innovator-adaptor, extrovert-introvert, risk taker-
avoider)

Interpretive perspective (understanding consumer behavior at an individual

level, e.g., symbolic consumption, using qualitative methodologies).

Postmodern perspective (no definition, only a loose set of ideas as to what

represents reality. In consumer behavior postmodernism deconstructs
common agreed-upon themes).
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POSITIVISM VS
INTERPRETIVISM
POSITIVISM INTERPRETIVISM

• Positivists are interested in • Interpretivists are

knowing specific cause of interested in
consumer behaviour and understanding
predicting it. consumption behavior and
the meaning behind such
behaviour.
THANK YOU
Khan Burhan Khan
burhan.khan@nbs.nust.edu.pk