Consumer Behaviour: Meaning/Definition and Nature of Consumer

Behaviour!

Meaning and Definition:

Consumer behaviour is the study of how individual customers, groups
or organizations select, buy, use, and dispose ideas, goods, and
services to satisfy their needs and wants. It refers to the actions of the
consumers in the marketplace and the underlying motives for those
actions.
Marketers expect that by understanding what causes the consumers to
buy particular goods and services, they will be able to determine
which products are needed in the marketplace, which are obsolete,
and how best to present the goods to the consumers.
The study of consumer behaviour assumes that the consumers are
actors in the marketplace. The perspective of role theory assumes that
consumers play various roles in the marketplace. Starting from the
information provider, from the user to the payer and to the disposer,
consumers play these roles in the decision process.
The roles also vary in different consumption situations; for example, a
mother plays the role of an influencer in a childs purchase process,
whereas she plays the role of a disposer for the products consumed by
the family.
Some selected definitions of consumer behaviour are as
follows:

1. According to Engel, Blackwell, and Mansard, consumer behaviour is

the actions and decision processes of people who purchase goods and
services for personal consumption.
2. According to Louden and Bitta, consumer behaviour is the decision
process and physical activity, which individuals engage in when
evaluating, acquiring, using or disposing of goods and services.

Nature of Consumer Behaviour:

1. Influenced by various factors:
The various factors that influence the consumer behaviour
are as follows:
a. Marketing factors such as product design, price, promotion,
packaging, positioning and distribution.
b. Personal factors such as age, gender, education and income level.
c. Psychological factors such as buying motives, perception of the
product and attitudes towards the product.
d. Situational factors such as physical surroundings at the time of
purchase, social surroundings and time factor.
e. Social factors such as social status, reference groups and family.
f. Cultural factors, such as religion, social classcaste and sub-castes.
2. Undergoes a constant change:
Consumer behaviour is not static. It undergoes a change over a period
of time depending on the nature of products. For example, kids prefer
colourful and fancy footwear, but as they grow up as teenagers and

young adults, they prefer trendy footwear, and as middle-aged and

senior citizens they prefer more sober footwear. The change in buying
behaviour may take place due to several other factors such as increase
in income level, education level and marketing factors.
3. Varies from consumer to consumer:
All consumers do not behave in the same manner. Different
consumers behave differently. The differences in consumer behaviour
are due to individual factors such as the nature of the consumers,
lifestyle and culture. For example, some consumers are technoholics.
They go on a shopping and spend beyond their means.
They borrow money from friends, relatives, banks, and at times even
adopt unethical means to spend on shopping of advance technologies.
But there are other consumers who, despite having surplus money, do
not go even for the regular purchases and avoid use and purchase of
advance technologies.
4. Varies from region to region and country to county:
The consumer behaviour varies across states, regions and countries.
For example, the behaviour of the urban consumers is different from
that of the rural consumers. A good number of rural consumers are
conservative in their buying behaviours.
The rich rural consumers may think twice to spend on luxuries despite
having sufficient funds, whereas the urban consumers may even take
bank loans to buy luxury items such as cars and household appliances.
The consumer behaviour may also varies across the states, regions and
countries. It may differ depending on the upbringing, lifestyles and
level of development.

5. Information on consumer behaviour is important to the

marketers:
Marketers need to have a good knowledge of the consumer behaviour.
They need to study the various factors that influence the consumer
behaviour of their target customers.
The knowledge of consumer behaviour enables them to take
appropriate marketing decisions in respect of the following
factors:
a. Product design/model
b. Pricing of the product
c. Promotion of the product
d. Packaging
e. Positioning
f. Place of distribution
6. Leads to purchase decision:
A positive consumer behaviour leads to a purchase decision. A
consumer may take the decision of buying a product on the basis of
different buying motives. The purchase decision leads to higher
demand, and the sales of the marketers increase. Therefore, marketers
need to influence consumer behaviour to increase their purchases.
7. Varies from product to product:
Consumer behaviour is different for different products. There are
some consumers who may buy more quantity of certain items and very

low or no quantity of other items. For example, teenagers may spend

heavily on products such as cell phones and branded wears for snob
appeal, but may not spend on general and academic reading. A
middle- aged person may spend less on clothing, but may invest
money in savings, insurance schemes, pension schemes, and so on.
8. Improves standard of living:
The buying behaviour of the consumers may lead to higher standard of
living. The more a person buys the goods and services, the higher is
the standard of living. But if a person spends less on goods and
services, despite having a good income, they deprives themselves of
higher standard of living.
9. Reflects status:
The consumer behaviour is not only influenced by the status of a
consumer, but it also reflects it. The consumers who own luxury cars,
watches and other items are considered belonging to a higher status.
The luxury items also give a sense of pride to the owners.

ocial Responsibility in Marketing

Ethical responsibilities and constraints. Businesses and people face some constraints
on what can ethically be done to make money or to pursue other goals. Fraud and
deception are not only morally wrong but also inhibit the efficient functioning of the
economy. There are also behaviors that, even if they are not strictly illegal in a given
jurisdiction, cannot be undertaken with a good conscience. There are a number of
areas where an individual must consider his or her conscience to decide if a venture is
acceptable. Some paycheck advance loan operators charge very high interest rates
on small loans made in anticipation of a consumers next paycheck. Depending on
state laws, effective interest rates (interest rates plus other fees involved) may
exceed 20% per month. In some cases, borrowers put up their automobiles as security,
with many losing their only source of transportation through default. Although some
consider this practice unconscionable, others assert that such loans may be the only
way that a family can obtain cash to fill an immediate need. Because of costs of

administration are high, these costs, when spread over a small amount, will amount
to a large percentage. Further, because the customer groups in question tend to have
poor credit ratings with high anticipated rates of default, rates must be high enough
to cover this.
Sustainability. Sustainability is a notion that proposes that socially responsible firms
will somehow financially outperform other less responsible firms in the long run. This
might result from customer loyalty, better employee morale, or public policy favoring
ethical conduct. Empirical results testing this hypothesis are mixed, neither
suggesting that more responsible firms, on the average, have a clear financial
advantage nor a large burden. Thus, a useful approach may be to determine (1)
specific circumstances under which a firm may actually find the more responsible
approach to be more profitable, (2) under which circumstances responsible behavior
can be pursued without an overall significant downside, and (3) the ethical
responsibilities that a firm faces when a more responsible approach may be more
costly.
The individual, the firm, and society. Different individuals vary in their ethical
convictions. Some are willing to work for the tobacco industry, for example, while
others are not. Some are willing to mislead potential customers while others will
normally not do this. There are, however, also broader societal and companywide
values that may influence the individual business decision maker. Some religions,
including Islam, disfavor the charging of interest. Although different groups differ
somewhat in their interpretations of this issue, the Koran at the very least
prohibits usurycharging excessive interest rates. There is some disagreement as to
whether more modest, fair interest rates are acceptable. In cultures where the
stricter interpretation applies, a firm may be unwilling to set up an interest-based
financing plan for customers who cannot pay cash. The firm might, instead, charge a
higher price, with no additional charge for interest. Some firms also have their own
ethical stands, either implicitly or explicitly. For example, Google has the motto Do
no evil. Other firms, on the other hand, may actively encourage lies, deception, and
other reprehensible behavior. Some firms elect to sell in less developed countries
products that have been banned as unsafe in their own countries.
Making it profitable for the tobacco industry to harvest. Many see the tobacco
industry as the enemy and may not want to do anything that can benefit the
industry. However, in principle, it may actually be possible to make it profitable for
the tobacco industry to harvestto spend less money on brand building and
gradually reduce the quantities sold. The tobacco industry is heavily concentrated,
with three firms controlling most of the market. Some other industries are exempt
from many antitrust law provisions. If the tobacco companies were allowed to collude

and set prices, the equilibrium market price would probably go up, and the quantity
of tobacco demanded would then go down. It is been found that among teenagers,
smoking rates are especially likely to decrease when prices increase. The tobacco
companies could also be given some immediate tax breaks in return for giving up their
trademarks some thirty years in the future. This would reduce the incentive to
advertise, again leading to decreased demand in the future. The tax benefits needed
might have to be very high, thus making the idea infeasible unless the nation is willing
to trade off better health for such large revenue losses.
Win-win marketing. In some cases, it may actually be profitable for companies to
do good deeds. This may be the case, for example, when a firm receives a large
amount of favorable publicity for its contributions, resulting in customer goodwill and
an enhanced brand value. A pharmacy chain, for example, might pay for charitable
good to develop information about treating diabetes. The chain could then make this
information on its web site, paying for bandwidth and other hosting expenses that
may be considerably less than the value of the positive publicity received.
Sponsored Fundraising. Non-profit groups often spend a large proportion of the
money they take in on fundraising. This is problematic both because of the
inefficiency of the process and the loss of potential proceeds that result and because
potential donors who learn about or suspect high fundraising expenses may be less
likely to donor. This is an especially critical issue now that information on fundraising
overhead for different organizations is readily available on the Internet.
An alternative approach to fundraising that does not currently appear to be much in
use is the idea of sponsored fundraising. The idea here is that some firm might
volunteer to send out fundraising appeals on behalf of the organization. For example,
Microsoft might volunteer to send out letters asking people to donate to the American
Red Cross. This may be a very cost effective method of promotion for the firm since
the sponsor would benefit from both the positive publicity for its involvement and
from the greater attention that would likely be given a fundraising appeal for a group
of special interest than would be given to an ordinary advertisement or direct mail
piece advertising the sponsor in a traditional way.
One issue that comes up is the potential match between the sponsor and sponsee
organization. This may or may not be a critical issue since respondents are selected
for the solicitation based on their predicted interest in the organization. Microsoft
directly or indirectly through the Bill and Melinda Gates Foundationhas been
credited with a large number of charitable ventures and has the Congressional Black
Caucus as one of its greatest supporters. In many cases, firms might volunteer for this

fundraising effort in large part because of the spear heading efforts of high level
executives whose families are affected by autism.
Commercial Comedy. Another win-win deal potential between industry and nonprofit groups involves the idea of commercial comedy. Many non-profit groups are
interested in finding low cost, high quality entertainment for fundraising events. After
all, money spent on buying entertainment reduces the net proceeds available for the
organizations program. Firms, on the other hand, have difficulty getting current and
potential customers to give attention to advertising in traditional media. If firms were
able to create some high quality entertainment involving their mascotsse.g., the
Energizer Bunny, the Pillsbury Doughboy, and the AFLAC Duckthe audience at a
fundraising event would give attention for an extended period of time. Good will
would also be generated, and it is likely that the act would receive considerable
media coverage.