CONSUMER BEHAVIOUR

CONCEPT OF CONSUMER BEHAVIOR

“The study of consumer behavior is the study of
how individuals make decisions to spend of what
they buy, why they buy it, when they buy it,
where they buy it, where they buy it, how often
they buy it, and how often they use it.
“the decision process and physical activity
individuals engage in when evaluating, acquiring,
using, or disposing of goods & services”.
 SEVERAL ASPECTS
 Customers and Consumers
 The Ultimate Consumer
 Individual buyer
 The decision process
 A Subset of Human Behavior
 Buying Motives
DEFINITION:

According to W.J Stanton,

“A motive can be defined as a drive or
an urge for which an individual seeks
satisfaction. It becomes a buying
motive when the individual seeks
satisfaction through the purchase of
something”.
Behavior is a goal directed activity

Motive/Need Goal
(preparing)
(Hungry)

Goods
(Food) Behavior Goal
Achievement
(Eating)
CONSUMER GOODS INDUSTRIAL GOODS
1. Used by end user for 1. Used for further
their own consumption production of other
2. Generally inexpensive goods (raw material)
3. Are less complex 2. Are expensive
4. Are purchase frequently 3. Are more complex
4. Are one time purchase
goods
IMPORTANCE OF CONSUMER BEHAVIOR

The study of consumer behaviour is vital in

framing production policies, price policies,
decisions regarding channels of distribution and
above all decisions regarding sales promotion.
1. Production Policies

2. Price Policies

3. Decision regarding Channels of Distribution

4. Decision regarding Sales Promotion

 MODEL OF BUYER BEHAVIOUR

MAJOR FACTORS INFLUENCING BUYING BEHAVIOUR

MARKETING OTHER STIMULI BUYER’S BUYER’S DECISION
STIMULI CHARACTERISTICSPROCESS
PRODUCT ECONOMIC
PRICE TECHNOLOGICAL CULTURAL PROBLEM RECOGNITION
PLACE POLITICAL
SOCIAL INFORMATION SEARCH
PROMOTION CULTURAL
PERSONAL EVALUATION OF
PSYCHOLOGICAL ALTERNATIVES
PURCHASE DECISION
POST PURCHASE
BEHAVIOUR

BUYER’S
DECISIONS
PRODUCT CHOICE
BRAND CHOICE
DEALER CHOICE
PURCHASE TIMING
WHY WE STUDY COUNSUMER
BEHAVIOR/
IMPORTANCE OF CONSUMER
BEHAVIOR
IMPORTANCE FOR CONSUMER
IMPROTANCE FOR MARKETING

IMPORTANCE OF CONSUMER BEHAVIOR

APPLICATION TO DECISION MAKING IMPORTANCE FOR STUDENTS

APPLICATION OF CONSUMER
BEHAVIOR
 APLICATION OF CB

CB CB & NONPROFIT CB & CONSUMER

AND &SOCIAL MKTING EDUCATIONS
MKTING MGMT

CB & GOVT’AL CB &

DECISION MAKING DE-MKTING
 CB AND MARKETING
MANAGEMENT
The process of planning and executing
1. The conception
2. Pricing
3. Promotion
4. Distribution of ideas
5. Goods & services to exchanges
6. Satisfy individual and organizational objectives.
 Three interrelated orientations are:

Consumer wants & needs

Company objectives

Integrated strategy
 Several major activities can be undertaken by an organization

Market opportunity Target market Marketing mix

selection determinants
Analysis

Unique market PRODUCT

needs
PRICE
wants Ex: soft drinks
PLACE
income
Food store
lifestyle segments PROMOTION

Vending machine
segments

The fountain
market
 CONSUMER BEHAVIOR & NONPROFIT & SOCIAL MARKETING

A number of writers have suggested that various

social and non profit organisations can be viewed
as having services or ideas that they are
attempting to market to target group of
“consumer” or “constituents.
MARKET SEGMENTATION
 CONCEPT & DEFINITION
The concept of market segmentation is based on the fact that the
market of commodities are not homogenous but they are
heterogeneous. Market represent a group of customers having
common charecteristicesbut two customers are never common in
their nature, habits,hobbies, income and purchase techniques.
 Definition of segmentation
According to Philip Kotler, “whenever a market for a
product or service consists of two or more buyers,
the market is capable of being segmented, that is
divided into meaningful buyer groups. The
purpose of segmentation is to determine
differences among buyers which may be
consequential in choosing away then or
marketing to them”.
LEVELS OF MARKET SEGMENTS
 SEGMENT MARKETING
 NICHE MARKETING
 LOCAL MARKETING
 INDIVIDUAL MARKETING
 IMPORTANCE OF MARKET SEGMENTATION

 ADJUSTMENT OF PRODUCT AND MARKET APPEALS

 BETTER POSITION TP SPOT MARKETING OPPORTUNITIES
 ALLOCATION OF MARKETING BUDGET
 MAKING THE COMPETITION EFFECTIVELY
 EVALUATION OF MARKETING PROGRAMME
 EVALUATION OF MARKETING ACTIVITIES
 INCREASE IN SALES VOLUME
 CONSUMER BEHAVIOUR MODELS

INPUT

PROCESS

OUTPUT
INITIATION:

INFLUENCER

DECIDER
Decision framework for studying
consumer behaviour

 External environmental variables

influencing behavior,
 Individual determinants of behaviour,
 The consumer decision process
 BUYING ROLES/ PARTICIPANTS IN THE
BUYING PROCESS
 INITATORS:
The person who first suggest & think of the idea of buying the particular product.
 INFLUENCER:
The person who explicitly or implicitly has some influence on the final buying
decision of others.
 DECIDER:
the decider is a person who ultimately determines any part or whole of the
buying decision, i.e., whether to buy, what to buy, how to buy, when to buy, or
where to buy.
 BUYER:
the buyer is the person who actually purchase. Buyer may be decider or
may be other person.
 USER:
the person who actually uses or consumes the services or products.
 EXTERNAL ENVIRONMENTAL VARIABLE INFLUENCING
BEHAVIOUR

INDIVIDUAL DETERMINANTS
Information processing
Learning and memory
Personality and self concepts
Attitudes
Motivation and involvement
 INDIVIDUAL DETERMINANTS OF BEHAVIOUR

 CULTURAL INFUENCES
 SUBCULTURAL INFLUENCES
 SOCIAL CLASS INFLUENCES
 SOCIAL GROUP INFLUENCES
 FAMILY INFLUENCES
 PERSONAL INFLUENCES
 OTHER INFLUENCES
DECISION PROCESS

PROBLEM RECOGNITION

INFORMATION SEARCH
AND EVALUATION

PURCHASING

POST PURCHASING
BEHAVIOUR
Consumer beliefs and attitudes
 Innovators
 Consumer confidence
 Buying styles
 techno graphics
CONSUMER INNOVATOR’S
 INNOVATORS
SEGMENTATION OF EARLY ADOPTERS
OF NEW PRODUCTS AND SERVICES
 KEY CONSUMER BELIEFS
 If a product is made by a company I
trust I will buy it even if it is slightly
more expensive.
 I buy based on quality not on price.
 I am willing to pay more for the product
that is environmentally safe.
 I always check the ingredients and
nutritional contents of food products
before I buy them.
 I buy the brand I grew up with the
one my mother used.
 I would pay extra for a product that
is consistent with the image I want to
convey
 I am influenced by what’s hot and
what’s not.
 I prefer to buy the things by friends
and my neighbors would approve of.
 Consumer Innovator Segments
 Electronics
 Leisure Innovators
 Financial
 Food
 Home Appliance
INNOVATION ADOPTION MODEL
 DEVICED BY “Rogers”
 Awareness and interest of the audience are
created by advertisers, so that the former
may evaluate the message of
advertisement.
 The potential purchaser, if satisfied with the
attributes advertised, purchases a product
on a trial basis.
 Product Comparision is made to evaluate
each and adopt a particular product.
INNOVATION ADOPTION MODEL

AWARENESS INTEREST

ADOPTION EVALUATION

TRIAL
DEFFUSION OF INNOVATION
 DIFFUSION OF INNOVATION
 DEFINITION

“The framework for exploring

consumer acceptance of new
products is drawn from the area of
research known as the diffusion of
innovation”
 PROCESSES OF INNOVATIONS
 DIFFUSION PROCESSES MACRO PROCESS

 ADOPTION PROCESS MICRO PROCESS

 DIFFUSION PROCESS
 This is concerned with how innovation spread
 Assimilation of product with the market
 It is process of acceptance of an innovation such
as a new product, new services, new ideas, or
new practices.
 Mode of communication may be mass media,
sales people, informal conversation.
Basic elements of diffusion process

The channels of
The innovation communication

The socal system time

 INNOVATION
 NO UNIFORM DEFINITON EXIST
 THERE ARE OTHER FACTORS DEFINE THIS
CONCEPT
1. FIRM ORIENTED DEFINITION
2. PRODUCT ORIENTED DEFINITION
3. MARKET ORIENTED DEFINITION
4. CONSUMER ORIENTED DEFINITION
5. FACTORS INFLUENSING THE RATE OF DIFFUSION
FIRM ORIENTED DEFINITIONS

A firm – oriented approach treats the

newness of a product from the
perspective of the company producing
or marketing it. When the product is
new to the company, it is considered
new. This definition ignores whether
or not the product is actually new to
the market place.
 PRODUCT ORIENTED DEFINITION

In contrast to firm oriented

definitions, a product- oriented
approach focuses on the features
inherent in the product itself and on
the effects these features are likely
to have on consumers established
usage patterns.
 TYPES OF PRODUCT INNOVATION

 CONTINUOUS INNOVATION
 DYNAMICALLY CONTINOUS
INNOVATION
 DISCONTINUOUS INNOVATIONS
 MARKET ORIENTED DEFINITIONS

It judges the newness of a product in terms

of exposures

Two definitions
 A product is considered new if it has
been purchased by a relatively small
(fixed) percentage of potential market.
 A product is considered new if it has
been on the market for a relatively short
(specified) period of time.
CONSUMER ORIENTED DEFINITION

In this context, a new product is any

product that a potential consumer
judges to be new. Newness is based
on the consumers perception of the
product, rather than on physical
features or market realities.
FACTORS INFLUENCING THE RATE
OF DIFFUSION
Diffusion researchers have identified
six products characteristics that
seem to influence consumer
acceptance of new products:
 Relative advantages
 Compatibility
 Trial ability (or divisibility)
 Observability (or Communicability)
 Cost
CHANNEL OF COMMUNICATION
 WAYS OF COMMUNICATION
1. BETWEEN THE MARKET & CONSUMERS
2. AMONG CONSUMERS
3. IMPERSONAL SOURCES SUCH AS
ADVERTISING AND EDITORIAL MATTERS
4. INTERPERSONAL SOURCES SUCH AS SALES
PEOPLE AND INFORMAL OPINION LEADERS
5. INTERACTIVE MARKETING MESSAGES (NEW
CONCEPT)
 SOCIAL SYSTEM
A social system is a physical, social, or
cultural environment to which people
belong and with in which they function.
Characteristics of modern social system:
1. A positive attitude towards change
2. An advanced technology and skilled labour force
3. A general respect for education and science.
4. An emphasis on rational and ordered social
relationships, rather than an emotional ones.
5. An out reach prospects
6. A system in which members can readily see
themselves in quite different roles.
 TIME
Time is the backbone of the diffusion
process.
three ways
1. Purchase time
2. Adopter categories
3. Rate of Adoption
 PURCHASE TIME

Purchase time refers to the amount

of time that elapse between
consumers initial awareness of a new
product or service and the point at
which they purchase or reject it.
 ADOPTER CATEGORIES

It involves a classification scheme

that indicates where a consumer
stands in relation to other consumers
in terms of time
 RATE OF ADOPTION

The rate of adoption is concerned with

how long it takes a new product or
services to be adopted by members of
a social system. The general veiw is
that the rate of adoption for new
products is getting faster or shorter,
Ex. fashion
 ADOPTON PROCESS Adoption

Trial

Legitimating

Attitude

Comprehension

Awareness
OPINION LEADERSHIP
 OPINION LEADERSHIP
DEFINITION:

“Opinion leaders are those people who are able,

in a given situation, to expert personal influence”.
 CHARECTERISTICES OF OPINION
LEADERS
 Social class position
 Greater exposure to mass media
 Greater interest and knowledge of the
areas of influence
 More gregarious
 More innovative
 More familiar and loyal to group standards
and values
 Appear to exhibit the personality trait of
public individuation.
 MEASUREMENT OF OPINION
LEADERSHIP
Consumer researches are interested
in identifying and measuring the
impacts of the opinion leadership
process on consumption behavior.
 BASIC MEASUREMENT TECHNIQUES

 Self-Designating Methods
 Sociometric Methods
1. The specific individuals to whom they provided
advice or information about the product or
brand under study
2. The specific individuals who provided them
with advice or information about the product or
brand under study.
 Key informant Methods
 Objective Methods
 USES OF OPINION LEADERS
Consumers, generally, do not speak
about products or services unless they
expect to derive some kind of
satisfaction from the activity.
1. Product- Involvement
2. Self- Involvement
 Gaining attention
 Showing connoisseurship
 Feeding like a pioneer
 Having Inside Information
 Suggesting Status
 Spreading the Gospel
 Seeking Confirmation
 Asserting Superiority
1. Other- involvement
2. Message - Involvement
CONSUMER DECISION MAKING
MODEL
 MEANING
A process by which a person is required to
make a choice from various alternative
options is referred to as decision- making.
Providing consumers with other alternative
is a good business strategy and can also
result in substantial increase in sales.
While for the consumer, he or she will be
pleased when able to choose and decide
on the best from the alternatives
available.
 LEVELS OF CONSUMER DECISION
MAKING
SPECIFIC LEVELS OF CONSUMER
DECISION MAKING

1. EXTENSIVE PROBLEM SOLVING

2. LIMITED PROBLEM SOLVING
3. ROUTINIZED RESPONSE BEHAVIOR
4. VARIETY SEEKING
 Extensive problem solving
The consumer needs a great deal of
information to establish a set of
criteria on which to judge specific
brands and a correspondingly large
amount of information concerning
each of the brands to be considered.
The marketer has to ensure two tasks
1. The marketer must continue to provide
satisfaction to the existing customers by
maintaining quality, service and value.
2. He must try to attract new customers by
making use of sales promotion techniques
like point of purchase displays, off-price
offers, etc., and also introduce new features
to the products.
LIMITED PROBLEM SOLVING
Consumers already have established
the basic criteria for evaluating the
product category and the various
brands in the category. Their search
for additional information is more like
“fine – tuning”, they must gather
additional brand information to
discriminate among the various
brands.
 ROUTINIZED RESPONSE BEHAVIOUR

Consumers have some experience with

the product category and a well-
established set of criteria with which
to evaluate the brands they are
considering. They may search for the
small amount of additional
information; they simply review what
they already know.
 VARIETY SEEKING
Some buying situation are
characterized by low involvement but
significant brand differences, here
consumers often do a brand
switching.
 CHARACTERISTICS OF CONSUMER PROBLEM-
SOLVING APPROACHES
Routine Limited Extensive
problem problem problem
solving solving solving
Purchase Low Medium High
involvement
level
Problem Automatic Semiautomati Complex
recognition c
Information minimal Limited extensive
search and
evaluation
Purchasing Convenience mixed Shopping
orientation
Post purchase Very limited Limited Inertia Complex
processes habit Brand to repurchase loyality if
Loyality brand satisfied
Switching if Complaints if
dissatisfaction Dissatisfied
 TYPES OF BUYING BEHAVIOR
HIGH INVOLVEMENT LOW INVOLVEMENT

Significant Complex Buying Behavior Variety seeking Buying

differences Behavior
between Brands

Few Differences Dissonance reducing Habitual Buying Behavior

between Brands Buying Behavior
 TYPES OF CONSUMER DECISIONS

 WHAT TO BUY
 HOW MUCH TO BUY
 WHERE TO BUY
 WHEN TO BUY
 HOW TO BUY
MODULE OF CONSUMER DECISION
MAKING
 MODEL OF CONSUMER BEHAVIOUR

 C.B. MODEL BY NICOSIA

 SCHIFFMAN & KANUK MODEL

 Field -1

Sub Sub field one

Field Consumer
Attributes Attributes
One firm
Attributes

Search Evaluate Field -2

Experience
Field -4 Motivation
Consumption or Storage

Decision (Action) Field -3

Feedback
Purchase Behaviour

C.B MODEL BY NICOSIA

 L.G SCHIFFMAN & L.L.KANUK’S
MODEL OF CONSUMER DECISION
MAKING
 Firm’s Marketing Socio cultural
effort environment
Product Family

Price Informal sources

Place Non commercial sources

INPUT
Promotion Social class

Subculture and culture

CONSUMER DECISION MAKING

Psychological Field
Need Recognition •Motivation
Prepurchase search
•Perception
PROCESS Evaluation of
•Learning
•Personality
alternatives •Attitudes

Experience

Purchases
output •Trial
•Repeat purchase

Post Purchase evaluation

MARKET MOVERS