Marketing Management

Module 2, Syllabus
Consumer behaviour- buying roles and
behaviour; Individual consumer behaviour
and
institutional consumer behaviour-- models of
buying decision; factors influencing buying
decisioncultural ,social, personal and
psychological factorsbuying process
consumer adoption processchanging
pattern of consumer behaviour.

Consumer Behavior
Definition: The behavior that consumer
display in searching for, purchasing,
using, evaluating and disposing of
products, services and ideas.
- Shiffman and Kanuk
It enables marketers to understand and
predict consumer behaviour in the
market place.

The Scope of Consumer Behavior

How do individuals make decisions to spend
their resources (time, money, effort).
Includes: what they buy, why they buy it,
when they buy it, where they buy it, how
often they buy it, and how often they use it.
How do individuals dispose of their oncenew purchases.
Includes: do they store it, throw it or give it
away, sell it or rent it ?

Consumer Behavior as an Academic

Discipline and an Applied Science
Factors that contributed to the

growing interest in consumer

behavior:
accelerated rate of new product
development
consumer movement
public policy concerns
environmental concerns
the opening of global markets

Consumer Behaviors
Interdisciplinary Roots
Consumer Behavior borrows from
Psychology, Sociology, Social
psychology, Anthropology and
Economics.
All factors combine to form a
comprehensive model that reflects
both the cognitive and emotional
aspects of consumer decision
making.

Four main applications of consumer

behavior
The most obvious is for marketing
strategy
A second application is public policy.
Social marketing.
As a final benefit, studying consumer
behavior should make us better
consumers.

Organizational Consumer
A business, government agency, or
other institution (profit or nonprofit)
that buys the goods, services, and/or
equipment necessary for the
organization to function.

Understanding Business
Buying Behavior
Four types of Business Markets:
Producer markets ( commercial markets)
Reseller markets
Government markets
Institutional markets

Steps in organl. Buying

process

1. Problem ( need ) Recognition

2. General Description of Need
3. Product Specifications
4. Supplier Search
5. Acquisition and Analysis of Proposals
6. Supplier Selection
Selection of order routine
Performance evaluation

Participants in Business
Buying

Roles Played in a Buying Center

Approvers

Initiators
Users

Deciders

Influencers

Buyers

Gatekeepers

The buying centre and different

Buying Roles
Concept put forward by Webster and Wind
It refers to those individuals and groups who
participates in organizational purchase.
Initiators:
Users
Influencers
Deciders
Approvers
Buyers and Gatekeepers

Organizational
Buying
Compared to Consumer Markets,
Business Markets Have:
Fewer
buyers
Larger
quantity
Geographically
concentrated buyers
Closer relationships with
suppliers/customers

3 types of buying situations

1.Straight re-buy
Routine reorders from approved
vendor list
Low involvement, minimal time
commitment
Example: copier paper

2.Modified re-buy
Specifications, prices, delivery terms
or other aspects require modification
Moderate level of involvement and
time commitment
Example: desktop computers

3. New task
Purchasing a product or service for
the first time
High level of involvement and time
commitment; multiple influences
Example: selecting a web site design
firm or consultant

Personal Consumer
The individual who buys goods and
services for his or her own use, for
household use, for the use of a family
member, or for a friend. (Also
referred to as the Ultimate Consumer
or End User.)

Consumer Buying Decision

Process
Marketers Must Identify and
Understand:
Who Makes the Buying Decision
Types of Buying Decisions
Stages in the Buying Process

A Simplified Model of Consumer

Decision Making
The decision-making process can be
viewed as three interlocking stages:
The input stage:
marketing efforts
sociological influences
The process stage:
psychological factors
The output stage:
purchase behavior
post purchase evaluation

Consumer Decision Making

Process
Firms Marketing
Efforts
1.Product
2.Promotion
3.Price
4.Place
Socio Cultural
Envt
1. Family
2.Informal sources
3.Non-commercial
sources
4.Social classes
5.Culture and
Input(external
subculture
decision
Influences)

1.Need
recognition
2. Information
Search
3.Evaluation of
alternatives
Psychological
field
1.Motivation
2.Perception
3.Learning
4.Personality
5.Attitudes
6.
Process
(Consumer
Communication

Decision Making )

Trial purchase
or
Repeat
purchase

Post
purchase
evaluation

Output (post
behaviour )

 Factors affecting consumer decision

A) Socio Cultural Envt ( Group
Influence)
1.Family 2.Informal sources 3.Noncommercialsources 4.Social classes
5.Culture and subculture
B) Psychological field
1.Motivation 2.Perception 3.Learning
4.Personality5.Attitudes 6. Communication

Earlier models of consumer decision

making
An economic view ( Rational
consumer )
A passive view
A cognitive view
An emotional view

The Economic view ( rational

consumer)
Rational Customers Have To
-Be aware of all available product alternatives
-Be capable of correctly ranking each alternative in
terms of its benefits and disadvantages . This view
suggests that consumer always try to maximize the
economic considerations.
Why is this Economic Model Considered
Unrealistic?
People are limited by their existing skills, habits, and
knowledge.
People are limited by their existing values and goals

A passive view
Opposite to rational view
View consumers as impulsive and irrational
This view suggests that consumers easily fall
in to marketers promotional efforts, or sales
people efforts, that consumers are the
objects who can be easily manipulated.
This model was also under criticism on the
ground that consumers seek information,
play an important role in decision making
that it is not very easy to manipulate them.

A cognitive view
This model falls in between economic
and passive models
It suggests that consumer is a
thinking problem solver who actively
search information about products
and services. They also use some
short cut decision rules
( heuristics).

An emotional view
This model suggests that feelings
such as joy , fear, love, hope,
fantasy, sexuality etc. with certain
purchases. Mood ( mental state) also
affects the decision. Eg. Store
atmosphere, shop alone or in a group
etc. influence the decision.

Types of buying behavior

Complex buying behavior

Dissonance-reducing buying behavior
Habitual buying behavior
Variety-seeking buying behavior

Buying decision process

Five stages in the consumer buying
process
The amount of time spent in each
stage varies according to several
factors

Consumer Buying Process

Five-Stage Model of the Consumer Buying
Process

Need Recognition
Need/Problem Recognition
Can be triggered by internal or
external stimuli
Eg. Hungry person need food ( Internal)
When a person is exposed to an
advertisement ( external)
Needs become wants, which lead to
unique behaviors.

Information Search
There are various sources of information
Time, effort and expense dedicated to
information search depends on:
Degree of risk involved in the purchase
Amount of expertise with the product category
Actual cost of the search

Evoked set/ consideration set.

A narrowed -down set of alternatives that the
customer is considering to purchase.

Successive Sets Involved in Consumer Decision Making

Evaluation of Alternatives
Customers evaluate products as bundles of
attributes
Brand attributes
Product features
Price

Customers place different levels of

importance on attributes
Important considerations in the evaluation
stage:

Products must be in the evoked set

Consumers choice criteria must be understood
Marketing programs must be designed to
influence consumers opinions about product or
brand image

Purchase Decision
Trial purchase and repeat purchase
Various decisions on brand, model,
dealer, quantity, payment terms,
delivery schedule etc.

Postpurchase Evaluation
Four possible outcomes in the postpurchase
stage:

(1)
(2)
(3)
(4)

Delight
Satisfaction
Dissatisfaction
Cognitive Dissonance

Firms ability to manage dissatisfaction and

cognitive dissonance is:
A key to creating customer satisfaction
A major influence on word-of-mouth
communication

Culture and consumer behaviour

As Mitchell observes, culture is a set of
learned core values, beliefs, standards,
knowledge, morals, and behaviors shared
by individuals and societies that
determines how an individual acts, feels
and views oneself and others.
In short, culture is Ways of Living , built
up by a group of human beings, which are
transmitted from one generation to
another.

Elements of culture
Language Verbal language Non verbal
language
Manners
Costume
Social institutions
Education
Religion
Customs
Stratification: differentiation based on age,
sex, caste, occupation, income, education etc.

Influence of Culture on Consumption

Consumption patterns, living styles, and
the priority of needs are all dictated by
culture. Culture prescribes the manner
in which people satisfy their desires.
E.g. Consumption of beef/ pork. The
Japanese eat uncooked seafood. The
French eat snails. Americans and
Europeans use more honey.

Culture & Thinking Process

A country may be classified as either
a high-context culture or a lowcontext culture. The context of a
culture is either high or low in terms
of in-depth background information.
Refers to how communication is
conveyed and perceived

 North America and northern Europe

(e.g. Germany, Switzerland and
Scandinavian countries) are
examples of low-context cultures.
Messages are explicit and clear in the
sense that actual words are used to
convey the main part of information
in communication

 Japan, France, Spain, Italy, Asia, Africa and the

Middle Eastern Arab nations in contrast, are
high-context culture. The communication
may be indirect, and expressive manner in
which the message is delivered becomes
critical. The verbal part (i.e. words) does not
carry most of the information, much of the
information is contained in the non-verbal part
of the message to be communicated.

Subculture
A subculture is a distinct and identifiable cultural
group that has values in common with the overall
society but also has certain characteristics that
are unique to it. Thus, subcultures are groups of
people within a larger society. The various
subcultures share some basic traits of the wider
culture, they also preserve their own customs and
lifestyles, making them significantly different from
other groups within the larger culture of which
they are a part.

Example for Sub cultures in India

Base

Various sub cultural groups

Religion

Hindu, Muslim, Xian, Sikh etc

Geography

North, east, west and south

Age

Old, middle age, teen age, kids etc

Sex

Male and female

Occupation

Business, professional, service, agriculture etc.

Social class

Upper, middle, lower etc

More examples for sub

culture

Age sub culture in USA

Generation Y- age 8 yrs to 24 yrs
Generation X- age 24 to 37 yrs
Baby boomers : who born in the year
between 1946-64.
Racial sub culture in America
African American, Asian- American etc
Hispanic sub culture
Mexican- American, Cuban- American etc.

 Many multinational businessmen

agree that cultural differences are
the most significant and troublesome
variables encountered by them.
A number of MNCs including
Kelloggs, P&G, HUL, Nestle and so on
adapt to Indian taste and preferences
and business conditions.

 Cultural shock : Environmental

changes sometimes produce cultural
shock a feeling of confusion,
insecurity and anxiety caused by the
strange environment.
Cultural adaptation
The international business and its people
must adapt to the environment of the
different markets.

Cultural stereotype
It is an attempt to highlight the
common characteristics of a group.
Eg: Germans usually seen rigid,
humorless, obsessed with order and
formality, prefer to do things in time.

Religion and culture

Religious factors, often very
sensitive, need to be paid meticulous
attention by business. Attitude
towards work and wealth, working
timings and holidays demand and
consumption patterns etc. are
influenced by religion.
Eg. X mas, Ramzan, Rahukala etc.

Consumer adoption process

PLC
Stages

Introducti
on

Growth

Maturity

Decline

Adopter
Groups

Innovators

Early
adopters

Early
majority /
Late
majority

Laggards

Percentage
s

2.5%

13.5%

34% + 34% 16%

 Innovators
Innovators constitute, on an average the
first 2.5 per cent of all those consumers
who adopt the new product and are
technology enthusiasts. They are
adventurous, take risk, relatively younger,
better educated, have higher income, are
more receptive to unfamiliar things, rely more
on their own values and
judgment, are less brand loyal and more likely to
take advantage of special promotions.

 Early Adopters
Early adopters tend to be opinion leaders in
local reference groups and represent, on an
average the next 13. 5 per cent who adopt
the new products early, but carefully.
The Early Majority
The early majority tend to adopt new
products before the average person,
cautious and represents 34.0 per cent.

 The Late Majority

The late majority (34.0 per cent) are
somewhat suspicious about innovative
products. They are conservative, wary of
progress, rely on tradition and generally
adopt innovations in response to group
norms and social pressure, or due to
decreased availability of the previous
product rather than positive evaluation of
the innovation.

 Laggards
Laggards represent the last 16.0 per
cent of adopters. Laggards are
tradition bound, tend to be dogmatic
and make decisions in terms of the
past.

Stages in adoption process

Awareness
Knowledge
Evaluation
Trial Purchase
Adoption

Changes In Purchase Behavior

Patterns
In Indian culture the right to choose and the
will to buy , ultimately lay on the adult male
of the family and in this regard, Fathers
were considered to be the real decision
makers.
Socio-Cultural environment, Small family &
dual income, Changes in the attitude of
elders etc. has changed situation that
designing products and services catering to
the needs and wants of the children also.

Behavioural pattern
The emergence of children as major
decision makers in family purchase
decisions offers lots of challenges
and scope for marketers Companies ,
researchers , communication medias
are exploring this phenomenon which
has emerged as a very powerful
target segment all around the globe.

Behavioural pattern of Indian

consumers
Indian economy is one of the fastest growing
economy in the world and it is in the process
of a rapid transformation that there is a
sudden Shift inalmost all aspects oflife
Change in lifestyle
From traditional meals to fast foods
Price is not a big factor
Low interest finance is available, which has
increased the purchase power of consumers