Types of consumers

• The term consumer is used to describe two

different kinds of consuming entities.
• They are
• 1. The personal consumers
• 2. The organizational consumers
 Concept of consumer behaviour
• The term “consumer” was used to define
strictly in terms of economic goods and
services ,based on the view that consumers
are potential purchasers of products and
services offered for sale.
Consumer behaviour

An overview
 Buyer/ user
• The term buyer refers to one who buys a
product. But buyer might not be the user of
the product.
 Customer
• A “customer “ is one who actually purchases a
product or service from a particular
organisation or shop. A customer is always
defined in terms of a specific product or
company.
 consumer
• The term consumer ifs far wider term
encompassing not only the actual buyer or
customer but also all its users, i.e consumers.
 Distinctions between consumers and
customers
• There are two situations
• 1. when the service or product is provided
free,
• 2.when the customer is not the actual user of
the product or is only one of the many users.
 Who is a customer ?
• Customer is the most important person in any
business
• Customer is not dependant on us . We are
dependant on them.
• Customer does us as a favor when they call. We
are not doing them a favor by serving them.
• Customer is a part of our business, not an
outsider.
Seven keys to consumer behaviour
• consumer behaviour is motivated
• consumer behaviour includes many types of
activities
• consumer behaviour varies in timing and
complexity
• consumer behaviour involves different roles
• consumer behaviour is influenced by external
factors
• consumer behaviour differs for different people.
 Who is a customer?
• Customer is not someone to argue or match
with us.
• Customer is a person who brings us their
wants. It is our job to fulfill those wants.
• Customer is the life blood of every business.
 Behaviour
• Behaviour refers to the way of acting or
functioning .
• Behaviour is the interaction with the ambient
surrounding environment, inherent in living
creatures and mediated by their external and
internal activeness.
 Behaviour
• Behaviour is generally mediated by needs,
motives , personality, perception, learning,
involvement, attitude, communication,
persuasion, culture, reference groups, family
and social class.
 Definition of consumer behaviour
• According to kotler and Armstrong “consumer
buying behaviour refers to the buying
Behaviour of final consumers individuals and
households who buy goods and services for
personal consumption”
 Seven O’s of consumer behaviour
• Occupants - who- market?
• Objects - what- market buy ?
• Objectives - why - market buy?
• Organisations - who participate ?
• Operations - how – market buy ?
• Occasions - when - market buy ?
• Outlets - where - market buy ?
Seven keys to consumer behaviour
• consumer behaviour is motivated
• consumer behaviour includes many types of activities
• consumer behaviour is a process
• consumer behaviour varies in timing and complexity
• consumer behaviour involves different roles
• consumer behaviour influenced by external factors
• consumer behaviour differs for different people.
 consumer behaviour
• In the words of C.G. Walter and G.W. Paul, the
process whereby individuals decide whether,
what, when where how and from whom to
purchase goods and services.”
 Definition -analyses
• consumer behaviour is the decision process
adopted by the consumer.
• What type of products and services are to be
bought. when the products and services are to
be obtained.
• From where the products and services are to be
obtained
• From whom the products and services are to be
obtained.
 The study of consumer behaviour
• The study of consumer behaviour attempts to find the
answer for the following questions:
• Who are the customers?
• What do they buy?
• Where do they buy?
• How do they buy?
• Why do they buy?
• When do they buy?
• How often they buy?
• How often do they use?
 Elements of consumer behaviour
• consumer behaviour involves both individual processes
and group process
• consumer behaviour is reflected from awareness right
through post-purchase evaluation indicating satisfaction
or non- satisfaction from purchases
• consumer behaviour includes communication,
purchasing and consumption behaviour
• consumer behaviour is basically social in nature.
• consumer behaviour includes both consumer and
business behaviour
To understand consumer behaviour
• The source and nature of human needs
• The search and evaluation processes
• The way in which consumers form behavioral
intentions and arrive at a preferred alternative
• The nature and impact of consumer decisions
• The effect of the consumption experience and
its “feedback” influence on future acquisition
and consumption decisions.
 consumer behaviour and consumption
behaviour
• consumer behaviour to an individual person
(micro behaviour) whereas consumption
behaviour relates to the mass or aggregate of
individuals (macro behaviour)
Need to study consumer behaviour
• The study consumer behaviour is the
understanding of how individuals or
organisations behave in the purchase
situation.
• Such applications are said to exist at two
different levels of analysis, the micro
perspective and societal perspective.
 Analysis of perspectives
• Consumers do not always act to react as the
theory would suggest.
• Consumer preferences are changing and
becoming highly diversified.
• Consumer research has pointed out that
consumers dislike using identical products and
prefer differentiated products to reflect their
special needs , personalities an lifestyles.
 Analysis of perspectives
• Meeting of special needs of customers requires
market segmentation.
• Rapid introduction of new products with
technological advancement has made the job of
studying consumer behaviour more imperative.
• consumer behaviour can be used to sell that might
not sell easily because some other product has been
satisfying the customer, even if the new product
saves life much quicker than the old product.
 Analysis of perspectives
• Implementing the ‘ Marketing concept ‘ calls for studying
the consumer behaviour
• Shorter product life cycles.
• Ecological or environmental concerns.
• Consumer orientation
• Increased interest in consumer protection.
• Growth of services marketing.
• Growth of international marketing.
• Computer and statistical techniques.
• consumer behaviour is an interdisciplinary science.
 consumer behaviour
• The study of consumer behaviour has shown
fallacies than ever before .
• 1.consumers are loyal to products or
organisations
• 2. customers do not patronize the best
available product.
• 3. marketer cannot sell the product to the
customer against his will.
 Interdisciplinary Dimensions of consumer
behaviour

• Various disciplines have influence on the

consumer behaviour
S.NO DISCIPLINE GOVERNED BY
1 ECONOMICS DEMAND & SUPPLY,
INCOME,PURCHASING
POWER
2 PSYCHOLOGY NEEDS& MOTIVATION,
PERSONALITY
,PERCEPTION,
LEARNING, ATTITUDES.
3 SOCIOLOGY SOCIETY , SOCIAL
CLASS, POWER,
ESTEEM, STATUS.
4 SOCIO PSYCHOLOGY GROUP BEHAVIOUR ,
CONFORMITY TO
GROUP NORMS,
 Eg: dimensions of consumer
behaviour
1. GEOGRAPHIC SEGMENTATION

REGION SOUTH WEST, NORTHEAST

CITY SIZE MAJOR METROPOLITAN AREAS, SMALL

CITIES

DENSITY OF AREA URBAN , RURAL, SUBURBAN

CLIMATE TEMPERATURE, HOT, HUMID,RAINY

 : dimensions of consumer behaviour
2. DEMOGRAPHIC
SEGMENTATION

AGE 12, 12-17, 18-34,35-49,50-64

SEX MALE, FEMALE

MARITAL STATUS SINGLE, MARRIED,

INCOME UNDER 10000, ABOVE 15000

EDUCATION SCHOOLING, GRADUATE, POST GRADUATE

OCCUPATION a) PROFESSIONAL, WHITE-COLLAR ,AGRI,

MILITARY
: dimensions of consumer behaviour
3. PSYCHOLOGICAL SEGMENTATION

NEEDS-MOTIVATION FOOD SHELTER, SAFETY, SECURITY,

AFFECTION, SENSE OF BELONGING

PERSONALITY EXTROVERTS, NOVELTY

SEEKERS,AGGRESSIVES, INNOVATORS

PERCEPTION LOW-RISK ,MODERATE RISK, HIGH RISK

LEARNING-INVOLVEMENT POSITIVE ATTITUDE, NEGATIVE ATTITUDES

ATTITUDES
: dimensions of consumer behaviour

4. PSYCHOGRAPHIC SEGMENTATION

LIFE STYLE SEGMENTATION ECONOMY-MINDED, STATUS SEEKERS

: dimensions of consumer behaviour
5. SOCIO CULTURAL SEGMENTATION

CULTURES AMERICAN, GREEK, CHINESE, GERMAN,

MEXICAN, FRENCH

RELIGION HINDU, MUSLIM, CHRISTIAN

SUB CULTURE AFRICAN, AMERICAN, ASIAN,

FAMILY LIFE CYCLE BACHELOR, MARRIED

SOCIAL CLASS LOWER, MIDDLE, UPPER

: dimensions of consumer behaviour
6.USE RELATED SEMENTATION

USAGE RATE SUPER HEAVY USERS,

HEAVYUSERS,MEDIUM USRES,LIGHTUSRES

AWARENESS STATUS UNAWARE, AWARE

INTRESTED,ENTHUSIASTIC

BRAND LOYALTY NONE,SOME,STRONG

: dimensions of consumer behaviour
7.. USE SITUATUION SEGMENTATION

TIME LEISURE,WORK,RUSH,MORNING,NIGHT

OBJECTIVE PERSONAL,GIFT,SNACK,FUN,
ACHIEVEMENT

LOCATION HOME,WORK,FRIENDS’S HOME, IN-STORE

PERSON SELF,FAMILY
MEMBERS,FRIENDS,BOSS,PEER
: dimensions of consumer behaviour
BENEFIT SEGMENTATION

CONVENIANCE,SOCIAL ACCEPTANCE,LONG
LASTING ECONOMY, VALUE FOR THE
MONEY
: dimensions of consumer behaviour
HYBRID SEMENTATION
DEMOGRAPHIC/PSYCHOGRAPHIC COMBINATION OF DEMOGRAPHIC AND
PSYCHOGRAPHIC PROFILESOF CONSUMER
SEGMENTS PROFILE
GEODEMOGRAPHIC “ MOVERS & SHAKERS”, ,BEDROCK
AMERICA
SRIVALS INNOVATORS , THINKERS, BELIEVER,
ACHIEVERS, STRIVERS, EXPERIENCERS, S,
CONCEPT OF CONSUMER BEHAVIOUR

• The field of consumer behaviour is rooted in

the marketing concept, a business orientation
that evolved in the 1950’s through several
alternative approaches towards doing
business.
 The marketing concept

• “The marketing concept is a philosophy of

business that states that the customer want
satisfaction in the economic and social
justification for a firms existence”
distinct features of The marketing concept

• Target market
• Understanding customer needs
• Integrated marketing
• Profits through customer satisfaction
 Marketing concept
• The exchange orientation
• The production orientation
• The product orientation
• The sales orientation
• The marketing orientation
• The societal marketing orientation
 Modern day customer oriented chart

•
Customers

Customers
• Front line people Front line
people

• Middle management
• Top management Middle
management

Top management
A simple model of consumer decision making
A simple model of
consumer decision

Making

EXTERNAL
INFLUENCES

Firm’s marketing
effects

Socio cultural
environment

INPUT

Consumer
decision making

Psychological
field

Experience

POST PURCHASE
DECISION

BEHAVIOUR

PURCHASE

POST PURCHASE
EVALUATION

OUTPUT
 THE CONSUMER RESEARCH PROCESS

• 1.Defining the objectives of the research

• 2. Collecting and evaluating secondary data
• 3. Designing a primary research
• 4. Collecting primary data
• 5. Analyzing the data
• 6. Preparing a report on the findings
 Consumer research
• The term consumer research represents the
process and tools used to study consumer
behaviour. The adoption of the marketing
concept underscores the importance of
consumer research and provides ground work
for the application of consumer behaviour
principles to marketing strategy.
 Customer value
• Customer value is defined as the ratio
between the customers perceived benefits
( economic , functional, psychological) and the
resources(monetary ,time, effort,
psychological) used to obtain those benefits.
 Customer satisfaction
• Customer satisfaction is the individuals
perception of the performance of the product
or services in relation to his or her
expectations.
 Customer retention
• The strategy of customer retention makes it in
the best interests of the customers to stay
with the company rather than switch to
another firm.
• Loyal customers buy more products
• Loyal customers are less price sensitive and
pay less attention to competitors advertising
• Servicing existing customers , who are familiar
with the firm’s offerings and processes, is
cheaper
• Loyal customers spread positive word of
mouth and refer other customers.
 Consumer behaviour models
• Model :
• a model can be defined as a simplified
representation of reality. The simplification is
done by incorporating only those aspects of
reality that interest the model builder.
 Models of consumer behaviour

• Nicosia model
it was developed by Francisco Nicosia who
was one of the first to shift focus from the act of
purchase itself to the more complex decision
process engaged by consumers in products and
services. Nicosia presented his model in flow
chart format.
 Nicosia model
• the model describes a circular flow of
influences where each component provides
inp0-ut to the next. The model is viewed as
representing a firm is designing
communications ( ads, products, etc) to
deliver to consumers , whose response will
influence subsequent actions of the firm.
 Nicosia model
• the model consists of four fields, the
interrelationships of which are shown in the
figure.
 Nicosia model
• Field 1
• Field 1 has 2 sub fields .
• 1. The Firm’s attributes
• 2. The Consumers attributes
• the field 1 represents the output of a
commercial message from the firm in the form
of advertising or other form of promotions.
 Nicosia model
field 2

• It is the area of search and evaluation

of the advertised product and other
alternatives.
• If this process result in motivation to buy, it
becomes the input to the field 3.
 Nicosia model
• Field 3

• It represents the “Act of Purchase”

 Nicosia model
• Field 4

• it consists of the use of purchased item and it includes

three factors.
• (a) . Use and storage of the product by the
consumer.
• (b) . Retention of the experience by the consumer
as an influencing factor in future purchases.
• (c) . Feed back of sales results to the firm.
•
 Nicosia model - limitations

• It is incomplete in its treatment of numerous

factor internal to the consumers.
• Its computer like flow and the assumption that
the consumer begins the decision process with
no predispositions regarding the involved firms
are restricting.
• The firms attributes and the consumers
attributes seem to be overlapping.
 Howard- sheth model
• this model serves as an integrating
framework for a very sophisticated
comprehensive theory of consumer behaviour.
• in this model , the term buyer includes
industrial purchasers and ultimate consumers.
 Howard- sheth model
• the model distinguishes three levels of
decision making :
• (i) . Extensive problem –solving
• (ii) . Limited problem – solving
• (iii) . Routines response behaviour
 Howard- sheth model
• (i) input variables :

these are depicted in the model as stimuli in the

environment
• Significative stimuli :
• are actual elements of the brands.
• Symbolic stimuli :
• are generated by producers representing their
product as in symbolic form, such as in advertisements.
 Howard- sheth model
• (ii) . Output variables:
• these are buyers observable responses
to the stimulus inputs. They are arranged
and defined as follows:
(a). Attention - the magnitude of the buyers
information intake
(b) . Comprehension – the buyers store of
information about a brand .
 Howard- sheth model
• (ii) . Output variables

©. Attitudes - the buyers evaluation of a paticular

brands potential to satisfy his or her motives.
(d) . Intention: - the buyers forecast of which
brand he or she will buy.
( e) . Purchase behaviour :- the actual purchase
act, which reflects the buyers predisposition to buy
as modified by any inhibitors.
 Howard- sheth model
• Petpeoptual and learning construct
( hypothetical constructs) –
which are categorized into two major
groups, namely,
a]. Perceptual constructs
- they deal with information
processing .
• a]. Perceptual constructs
• i) sensitivity to information
• - the degree to which the buyer regulates
the stimulus information flow.
• ii) perceptual bias :
• -distorting or altering information
• iii) search for information
• - active seeking of information about
brands or their characteristics.
 learning constructs
• learning constructs :
deals with buyers formation of concepts.
i) motive – general or specific goals impelling action.
ii) brand potential of the evoked set :
- the buyers perception of the ability of brands in
his evoked set to satisfy his goals .
iii) decision mediators :
- the buyers mental rules for matching an
dranking purchase alternatives according to his or her motives .
 learning constructs
• Iv) predisposition:
• - a preference towards brands in the evoked set
expressed as an attitude towards them .
• v) inhibitors:
• - environmental forces such as price and time
pressure which restrain purchase of a preferred brand.

• vi) satisfaction :
• - the degree to which consequence of a
purchase measure up to the buyers expectations for it.
• Iv) Exogenous variables :
• the model lists a number of external
variables that can significantly influence buyer
decisions. They are not well defined because
they are external to the buyer.
 Howard- sheth model- limitations
• The model does not make sharp distinctions
between exogenous and other variables.
• some of the variables are not well defined
and difficult to measure.
• The model also has limited generality.
 Engel- Blackwell- Miniard model
• The model stands as one of the most popular
representations of consumer behaviour. It
depicts consumer behaviour as a decision
process of five activities which occur
overtime.
 Engel- Blackwell- Miniard model
• Five activities :
• i) . Motivation and need recognition
• ii). Search for information
• iii) . Alternative evaluation
• iv) . Purchase
• v) . outcomes.
 Engel- Blackwell- Miniard model
• The variables are grouped into four general
categories :
a). Stimulus and inputs
b). Information processing
c) . Decision process, and
d) . Variables influencing the decision
process.
Engel- Blackwell- Miniard model-limitations

• There appears to be a vagueness regarding the

role of some variables , and the model is
somewhat mechanistic in its treatment of the
decision process.
 Implications of the models on marketing
decisions
• The purpose of the models are to facilitate the
construction of a theory to guide, research on
consumer behaviour and to facilitate learning
what is known about consumer behaviour at
present.
• It helps in identifying the relevant variables,
indicating their characteristics , and in
specifying their interrelationships, that is how
they influence
 Implications of the models on marketing
decisions
• It allows the researcher by selecting the most
important aspects of consumer behaviour for
analysis and testing.
• Models serve as a learning aid by providing
knowledge about the consumer behaviour.
• The models also helps in remaining to consider
how a particular variable interacts with other
variables in influencing the behaviour.
 Internal influences
• Psychological influences on consumer
behaviour :

• Motives, perception and learning and

attitudes
 motives
• A motive is a drive or an urge for which an
individual seeks satisfaction.
• “ a buying motive is the reason why a person
buys a particular product. It is the driving force
behind buying behaviour and may be based
on psychological or physiological wants”.
 Motives -defn
• Definition:

• “ a motive is an inner urge that moves or

prompts a person to action” .

• - R.S.Davar
 Buying motives

• “ Buying motives are those influences or

considerations which provide the impulse to
buy ,induce action or determine choice in the
purchase of goods or services”.
 motives

• Two major components are involved in

motives.
• 1. A mechanism to arouse bodily energy
• 2. A force that provides direction to that
energy
 Role of motives
• Defining basic strivings
• Identifying goals objects
• Influencing choice criteria
• Directing other influence.
 Importance of buying motives

• 1. product planning
• 2. pricing policies
• 3. promotional policies
• 4. distribution channel
Difficulties in determining buying motives

• 1. Unawareness of the purchasers

• 2. Non disclosure by purchaser
• 3. Difficulty in separation
• 4. Ever changing pattern of motives
• 5. Personality of the purchaser
 Classification of motives

• 1. Primary buying motives

• 2. Secondary buying motives
 Primary and secondary motives
• Primary motives are those motives which are
inborn like motive for taking food .
• Secondary motives are the motives which are
learned e.g.., bargain motive , economy
motive etc.,
 Buying motives

• buying motives can be classified in the

following ways:
• 1. acquired and inherent buying motives
• - acquired motives :
• - are the learned motives like economy,
cleanliness, fashion,, comfort,etc
• - inherent buying motives:
• Inherent buying motives:
• - these are basic human instincts e.g., hunger,
thrust , safety, etc.
• 2.primary and secondary buying motives
• 3. conscious and dormant buying motives :
• - conscious buying motives :
• The activated motives are called conscious buying
motives and the person is ready for action
• dormant buying motives :
• - are those motives which are less active and does not
lead to quick action.
• 4. physical and psychological buying motives:
• physical buying motives :
• -are related to physical satisfaction e.g., hunger
• Psychological buying motives :
• - are related to psychological satisfaction e.g., esteem
• 5. emotional and relational motives
• emotional buying motives :
• - the heart predominates over head and mind.
Factors such as age , status, pleasure, sex attraction,
hate etc.
• relational buying motives:
• -are those motives which takes into consideration the
price , utility, quality, stability, service and reliability etc
of the product. Here reason is associated with the
purchase.
 Motive structuring
•
• motive hierarchy

• Maslow’s hierarchy :
• The most widely known hierarchy , as
proposed by A.H.Maslow,are given
 Maslow’s hierarchy theory

• i) . Physiological needs:
• e.g., hunger , thrust
• Ii) . Safety needs :
• e.g., physical security, stable protection,
order
• Iii) . Social needs :
• Iv) . Esteem needs :
• e.g., recognition, status, Prestige,
Reputation,etc

• V)self actualisation needs :

• Represents then highest level of motives

 Complexities in diagnosing the buying
motives
• 1. buyers awareness
• 2. buyers non-disclosure
• 3.motives integration
• 4. dynamism of motives
• 5. buyers enigmatic personality
 perception
• a motivated person , will be ready to act.
• How he actually acts is influenced by his
perception of the situation.
• Perception is a complex process by which
people select, organise , and interpret sensory
stimulation into a meaningful world.
 perception
• A fundamental aspect of perception is that it
represents the receivers effort to organise
received stimuli into a meaningful structure.
• in doing so two major group of factors are
involved.
• 1. stimulus factors
• 2. functional factors
 Stimulus factors

• Stimulus factors has the following four basic

tendencies :
• i) similarity
• ii) proximity
• iii) continuity
• Iv) context