Consumer Behaviour

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CONSUMER OR CUSTOMER

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 Consumer Behaviour
• Individuals or groups acquiring, using and disposing
of products and services
» Arnould, Price and Zinkhan 2004

• Behaviour displayed by consumers in searching for,

purchasing, using, evaluating and disposing of
products and services
– Schiffman, Kanuk and Kumar 2004

• What are the steps involved in CB, from the

consumer’s angle?

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 CB - Importance
• Why Study CB at all?
• What is the importance of CB?
• What are some reasons why we should study
CB?

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WHAT IS MARKETING ?

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 Concepts in marketing

• Production Concept
– “Any customer can have a car painted any color
that he wants so long as it is black.”
• Henry Ford

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Concepts in marketing

• Product Concept
– Bali Pathfinder
– Utilitarian and
aesthetic
– Weak distribution
and promotion
• PIP 1980

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Selling Concept

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 Concepts in Marketing
• Marketing Concept: Determine Consumer
Needs/Wants and fill them better than anyone
else, at a profit
• The Consumer is thus the starting point
• Marketing starts with consumer needs
• Hence, marketers have to be consumer
focused always, consumer obsessed, in fact

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 Implementing the Marketing
Concept
• Consumer Research
• Segmentation
• Targeting
• Positioning

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Target markets, Positioning and
Segmentation

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 CB - Importance
• Marketing starts with the consumer; hence,
CB is important
• If Marketers knew what makes consumers
tick, they have it made
• If a marketer can predict CB, it would be
wonderful for him
• CB is useful from a public policy standpoint as
well; how?

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 Concepts in Marketing
• Societal Marketing: Fill consumer needs, at the same
time, harm him/her & society as little as possible
– Thus, McDonalds faces lawsuits
– Even Pepsi says it wants to be water neutral
• Thus, currently, the last two concepts hold sway
• Hence, CB is critical

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 CB - Importance
• If Govt knows what messages consumers react
to, can change their negative behaviour
• For instance, to reduce smoking, prevent AIDS,
and so on

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 CB - Importance

• From a Seller’s market to a Buyer’s market

• Bajaj used to make consumers wait for years
to get a scooter, now they call you at home
• Consumers are becoming more powerful;
rights have increased, -ve WOM very
powerful thanks to Net

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 CB - Importance
• Plus consumers are not rational e.g. Dettol Vs.
Savlon; why?
– Consumers are maddening at times
– Consumers wear specs easily, but not hearing
aids!
– Pears says “transparent soap” – why should
anyone care?
– Nestle Polo – Mint With a Hole?!!

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 CB - Importance
• Do fairness creams work?
• Does Iodex or Amrutanjan work?
• Why do women (and now increasingly men)
use cosmetics?

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 CB - Importance
• For consumers, psychology plays a big role
• Predictably Irrational !

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 CB - Importance
• CB is the starting point of marketing strategy
– Assume you your product is Rs. 120
– Want to reduce price to Rs. 60
– “Rs. 60 off” or “50% off”?
– Should you be early mover/late mover?
– And so on
• Thus, CB is crucial

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 CB - Importance
• A number of example show consumers are
irrational
– So what?
– Why as a manager should I worry?

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 CB - Importance
• Because this irrationality is not random
– Can be modeled
– Can be predicted to a large extent
– Why do consumers behave the way they do?
– We will answer this in this course

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 A Note
• Organisational consumers are also consumers
• However, this is B2B marketing
• We focus on individual/non-organisational
consumers in this course

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 Summary
• CB involves lots of activities
• CB is very important and has its genesis in the
marketing concept
– Lots of marketing decisions need to be taken after
understanding CB
• We focus just on the individual consumer

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 External Influence
Sociocultural Environment
Firm’s Marketing Efforts 1. Family
1. Product 2. Informal sources
Input 2. Promotion 3. Other noncommercial
3. Price sources
4. Channels of distribution 4. Social class
5. Subculture and culture

Psychological Field
Need 1. Motivation
Recognition 2. Perception
3. Learning
Prepurchase 4. Personality
Process
Search 5. Attitudes
Evaluation of
Alternatives Experience

Purchase Figure 1-1:

1. Trial
2. Repeat purchase
A Model of
Output
Consumer
Postpurchase Evaluation Decision
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Making