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Unit II
Consumer Behaviour
More or less, after the

Second World War, the seller markets have disappeared and buyers

markets have come up. It means that the manufacturers attention has switched over from
the products to the consumers and specially concentrated on the consumer behaviour. The
manufacturer possesses no control over thebehaviour of consumers. A modern marketer first,
tries to understand the consumers and their response, then he studies the basic characteristics
of their behaviour.

The wealth of products and services produced in a country make our

economy strong. Almost all the products, which are available to buyers, have a number of
alternatives supplies; i.e substitute products are available to consumers, who make a decision
to buy products. Therefore, a seller, most of his time, seeks buyers and tries to please them.
In order to successful, a seller is concerned with.
Who is the customer?
What do consumers buy?
When do consumers buy?
How do consumers buy?
From where do consumers buy?
Why do consumers buy?
A buyer makes a purchase of a particulars product or a particular brand and this can be
termed product buying motives. And the reason behind the purchase from a particulars
seller is patronage motives.
Meaning:
The process whereby individual decide whether, what, when, how and from whom to
purchase goods and services can be termed as the customers or the buyers behaviour.
A broad term that covers both individual consumers who buy goods and services for their
own use and organizational buyers who purchase business products.
The process through which the ultimate buyer makes purchase decisions

The buyer may take a decision whether to save or spend the money. When he decides
to spend, then there are many problems as to what to purchase, because needs are numerous,
which leads to ranking the needs in terms of priority. Then, the problems are consumption
problems- where to buy, how to buy, from whom to buy etc.
Buying Motives:
Motives refer to thought, urge, strong, feelings, emotion, drive etc. They make a
buyer to react in the form of a decision. Motivation explains the behaviour of a buyer.
Motives induce a consumer to purchase a particular product. The motives may be generally
controlled by economic, social, psychological influences etc. People purchase products urged
by mental and economic forces, which create a desire; and this desire is satisfied by the
articles displayed for sale. Motive is an inner urge that prompts one to action; it is not a mere
desire. The stimulated desire is called a motive.
Determinants of consumer buying behaviour
A marker is always interested to know how consumers to various marketing stimuliproduct, price, place and promotion and other stimuli i.e., buyers environment economic
technological, political and cultural. The marketer studies the relationship between marketing
stimuli and consumer response. These stimuli pass through buyers box which produces the
buyers response and is shown below:
Buyer Behaviour Model

Outside Stimuli
Buyers Black Box
Buyers Response
Marketing
other
Buyer
buyer Product
Choice
Product
Economic
Characteristics
Decision Brand
Choice
Price
Technological
Dealer
Choice
Place
Political
Purchase
Timing
Promotion
Cultural
Purchase
Amount

The buyer is considered as a black box, because his mind cannot be imagined, as to
his buying decision. The buying decision depends on his attitude, preference, feeling etc.

Factors influencing the consumer behaviour are internal needs, motives, perception
and attitude as well as external-family, social groups, culture, economics, business influences
etc. These influences are shown below:

Social Influences
Business
Influences

Family Influences
cultural
Influences
Needs

Motivation

Economic influences
Purchase
Perception
Attitude
Decision

The success or failure in marketing depends upon the individuals reactions, expressed
in the form of buying pattern. Mainly, the buyer behaviour has many approaches; the
economic, the psychological, the socio-cultural etc. a buyer is subjected to many influences
before the actual purchase.

A. the Marshallian Model

The theory holds that purchasing decisions are the result of largely rational and
conscious economic calculations. An individual buyer seeks to spend his income on such
goods which give the most satisfaction according to his tastes and at relative prices. Alfred
Marshalls work aimed at realism, but his method was to start with simplifying assumptions
and examine the effect of a change in a single variable, say price, when all other variables
were held constant. He employed the measuring rod of money as an indicator of the

intensity of human psychological desires. This method over the year, and assumption have
been refined into what is now known as modern utility theory.
The following important economic factors affect the buyers behaviour:
1. Disposable personal income: the economists made attempt to establish a relationship
between income and spending. Disposable personal income represents potential purchasing
power that a buyer has. The change in income has a direct relation on buying habits.
Personal consumption spending tends both to rise and fall at a slower rate than what
disposable personal income does.
2. Size of family income: the size of family and the size of family income affect the
spending and saving patterns. Generally large families spend more and small families spend
less, in comparison.
3. Income Expectation: The expected income to receive in future has a direct relation with
the buying behaviour. The expectation of higher or lower income has a direct effect on
spending plans.
4. propensity to consume and to save: this goes tot he habit of spending or saving with the
disposable income of buyers. If the buyers give importance to present needs, then they
dispose of their income. And buyers spend less if they give importance to the future needs.
5.Liquidity of fund: The present buying plans are influenced greatly by liquidity of assets
ie. Cash and assets readily convertible into cash, for example, readily marketable shares and
bonds, bank balances etc. however, these convertible assets influence and offer freedom to
the buyer, who actually buys with current income.
6. consumer credit: facility of consumer credit system hire purchase, instalment purchase
etc., play an important role in purchasing decision. A buyer can command more purchasing
power.
Economic model suggests behavioural hypothesis:
(a) lower the price of the product, higher the sales
(b) Lower the price of substitute products, lower the sales of this product
(c) Higher the real income, higher the sales of this product
(d) Higher the promotional expenses, higher the sales
However, :lower the price of a product, higher the sales may not hold good, as buyer may
feel that the product is a sub-standard one, Economic factors alone cannot explain all the
variations in sales. The model ignores the fundamental question of how product and brand
preferences are formed.
B. psychological theories:

Psychology has contributed much to the marketers to understand the buyers.

Psychology explains how consumers learn about a product and how they can recall from the
memory, the development of buying habits. This theory of learning is explained as a
process of repetition, motivation, conditioning and relationship. Repetition improves
leaning for example, when advertisements are repeated, people may be able to understand
further about the product. This approach-repetition- is aimed at repeated advertisements for
drawing the attention and interest of the people. According to stimulus-response theory,
learning is dependent on drive, cue, response and reinforcement. Drive is a strong stimulus.
Drives may be primary-thirst, hunger etc., and secondary-desire for money, pride etc.
response is an answer given to drive or cue. For example, when you feel hungry, you try to
get food at any cost. Reinforcement is a positive repetition of purchase of the same brand
whenever same needs arise. The economic factors are related to the functional nature of
products. Psychological motives of buying relate to personal feelings and emotions. The
psychological factors play a more important role in motivating the consumer behaviour than
economic factors.
Again psychology directs towards satisfying certain needs and they are (Maslow Hierarchy of
human needs)
1. Physical needs

: Hunger, thirst, shelter etc

2.Safety needs

: Security, protection etc.

3. Belongingness and love needs

:Affection, companionship, social discourses etc

4. Needs for self-actualization

: Achievement in life

5. Desire to know

: Quest for knowledge and understanding

6. Aesthetic needs

: Love for beauty etc.

C. Psychoanalytic Theories: it is a theory developed by Sigmund Freud and is composed of

three elements viz., the id(Instinct), the super ego and ego.

The buyer behaviour depends

upon the relative strength of the three elements in the personal ability. For example, you
went to a shop to get a handkerchief. While leaving the shop, you noticed an automatic
watch and you were impressed by its fine appearance. (Id is aroused). But you remembered
about your younger brothers need for a dress (super ego intervenes). The Id and super ego
are sometimes in conflict. The ego is the conscious and rational control which maintains the
balance between id and the super ego;
D. Social Psychological Theories: Veblen was an economist, but evolved into a social
thinker greatly influenced by the new science and social anthropology. The individual

decisions and behaviour are quite often influenced by the family and the society.

He saw

the man as a social animal. His wants and behaviour are largely influenced by the group in
which he is a member. For instance, the decision may be made by one; actual buying may be
done by another and the product is used by yet another member of the family. For example, a
mother takes a decision to buy a tine cycle for her little boy; the cycle is purchased by the
father and the user is the little boy.
Buying decision process
Youve been a consumer with purchasing power for much longer than you probably realize
since the first time you were asked which cereal or toy you wanted. Over the years, youve
developed a systematic way you choose among alternatives, even if you arent aware of it.
Other consumers follow a similar process. The first part of this chapter looks at this process.
The second part looks at the situational, psychological, and other factors that affect what,
when, and how people buy what they do. Keep in mind, however, that different people, no
matter how similar they are, make different purchasing decisions. You might be very
interested in purchasing a Smart Car. But your best friend might want to buy a Ford 150
truck. Marketing professionals understand this. They dont have unlimited budgets that allow
them to advertise in all types of media to all types of people, so what they try to do is figure
out trends among consumers. Doing so helps them reach the people most likely to buy their
products in the most cost effective way possible.
Stages in the Buying Process
Figure 1 "Stages in the Consumers Purchasing Process" outlines the buying stages
consumers go through. At any given time, youre probably in some sort of buying stage.
Youre thinking about the different types of things you want or need to eventually buy, how
you are going to find the best ones at the best price, and where and how will you buy them.
Meanwhile, there are other products you have already purchased that youre evaluating.
Some might be better than others. Will you discard them, and if so, how? Then what will you
buy? Where does that process start?

Figure 1
Need Recognition

Search for Product Information

Product Evaluation

Product Choice and Purchase

Post purchase Use and Evaluation

Disposal of the Product

Stage 1. Need Recognition

Perhaps youre planning to backpack around the country after you graduate, but you dont
have a particularly good backpack. Marketers often try to stimulate consumers into realizing
they have a need for a product. Do you think its a coincidence that Gatorade, Powerade, and
other beverage makers locate their machines in gymnasiums so you see them after a long,
tiring workout? Previews at movie theaters are another example. How many times have you
have heard about a movie and had no interest in ituntil you saw the preview? Afterward,
you felt like had to see it.
Stage 2. Search for Information
Maybe you have owned several backpacks and know what you like and dont like about
them. Or, there might be a particular brand that youve purchased in the past that you liked
and want to purchase in the future. This is a great position for the company that owns the
brand to be in something firms strive for. Why? Because it often means you will limit your
search and simply buy their brand again. If what you already know about backpacks doesnt
provide you with enough information, youll probably continue to gather information from
various sources. Frequently people ask friends, family, and neighbors about their experiences
with products. Magazines such as Consumer Reports or Backpacker Magazine might also
help you.

Internet shopping sites such as Amazon.com have become a common source of information
about products. Epinions.com is an example of consumer-generated review site. The site
offers product ratings, buying tips, and price information. Amazon.com also offers product
reviews written by consumers. People prefer independent sources such as this when they
are looking for product information. However, they also often consult nonneutral sources of
information, such advertisements, brochures, company Web sites, and salespeople.
Stage 3. Product Evaluation
Obviously, there are hundreds of different backpacks available to choose from. Its not
possible for you to examine all of them. (In fact, good salespeople and marketing
professionals know that providing you with too many choices can be so overwhelming, you
might not buy anything at all.) Consequently, you develop whats called evaluative criteria to
help you narrow down your choices.
Evaluative criteria are certain characteristics that are important to you such as the price of the
backpack, the size, the number of compartments, and color. Some of these characteristics are
more important than others. For example, the size of the backpack and the price might be
more important to you than the colorunless, say, the color is hot pink and you hate pink.
Marketing professionals want to convince you that the evaluative criteria you are considering
reflect the strengths of their products. For example, you might not have thought about the
weight or durability of the backpack you want to buy. However, a backpack manufacturer
such as Osprey might remind you through magazine ads, packaging information, and its Web
site that you should pay attention to these featuresfeatures that happen to be key
selling points of its backpacks.
Stage 4. Product Choice and Purchase
Stage 4 is the point at which you decide what backpack to purchase. However, in addition to
the backpack, you are probably also making other decisions at this stage, including where and
how to purchase the backpack and on what terms. Maybe the backpack was cheaper at one
store than another, but the salesperson there was rude. Or maybe you decide to order online
because youre too busy to go to the mall. Other decisions, particularly those related to big
ticket items, are made at this point. If youre buying a high-definition television, you might
look for a store that will offer you credit or a warranty.
Stage 5. Post purchase Use and Evaluation
At this point in the process you decide whether the backpack you purchased is everything it
was cracked up to be. Hopefully it is. If its not, youre likely to suffer whats called post
purchase dissonance. You might call it buyers remorse. You want to feel good about your
purchase, but you dont. You begin to wonder whether you should have waited to get a better
price, purchased something else, or gathered more information first. Consumers commonly
feel this way, which is a problem for sellers. If you dont feel good about what youve
purchased from them, you might return the item and never purchase anything from them
again. Or, worse yet, you might tell everyone you know how bad the product was. Companies

do various things to try to prevent buyers remorse. For smaller items, they might offer a
money back guarantee. Or, they might encourage their salespeople to tell you what a great
purchase you made. How many times have you heard a salesperson say, That outfit looks so
great on you!? For larger items, companies might offer a warranty, along with instruction
booklets, and a toll-free troubleshooting line to call. Or they might have a salesperson call
you to see if you need help with product.
Stage 6. Disposal of the Product
There was a time when neither manufacturers nor consumers thought much about how
products got disposed of, so long as people bought them. But thats changed. How products
are being disposed is becoming extremely important to consumers and society in general.
Computers and batteries, which leech chemicals into landfills, are a huge problem.
Consumers dont want to degrade the environment if they dont have to, and companies are
becoming more aware of the fact. Take for example, Crystal Light, a water-based beverage
thats sold in grocery stores. You can buy it in a bottle. However, many people buy a
concentrated form of it, put it in reusable pitchers or bottles, and add water. That way, they
dont have to buy and dispose of plastic bottle after plastic bottle, damaging the environment
in the process. Windex has done something similar with its window cleaner. Instead of buying
new bottles of it all the time, you can purchase a concentrate and add water. You have
probably noticed that most grocery stores now sell cloth bags consumers can reuse instead of
continually using and discarding of new plastic or paper bags