Introduction to Consumer Behaviour

Session 2
28.1.11
 The behavior that consumers
display in searching for,
Consumer
purchasing, using,
Behavior
evaluating, and disposing of
products, services, and ideas.
 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 once-new
purchases.
– Includes: do they store it, throw it or give it away, sell
it, rent it, or lend it out?
 The individual who buys
goods and services for his or
her own use, for household
Personal use, for the use of a family
Consumer member, or for a friend.
(Also referred to as the
Ultimate Consumer or End
User.)
 A business, government
agency, or other institution
(profit or nonprofit) that
Organizational
buys the goods, services,
Consumer
and/or equipment necessary
for the organization to
function.
 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 national markets throughout
the world
 Consumer Behavior’s
Interdisciplinary Roots

• Consumer Behavior borrows from psychology,

sociology, social psychology, anthropology.
• All factors combine to form a comprehensive
model that reflects both the cognitive and
emotional aspects of consumer decision making.
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
• postpurchase evaluation
 External Influence
Firm’s Marketing Efforts
1. Product
Input 2. Promotion
3. Price
4. Channels of distribution
Consumer Decision Making
Sociocultural Environment
1. Family
2. Informal sources
3. Other noncommercial
sources
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
Postdecision

Figure 1-1
Behavior

1. Trial
Output 2. Repeat purchase A Simple Model of
Consumer Decision
Postpurchase Evaluation Making
Consumer Methodology used to study
Research consumer behavior.
 Consumer Research Paradigms

Quantitative
Quantitative
Research
Research

Qualitative
Qualitative
Research
Research
 Quantitative Research

• Descriptive in nature.
• Enables marketers to “predict” consumer
behavior.
• Research methods include experiments, survey
techniques, and observation.
• Findings are descriptive, empirical and
generalizable.
 Qualitative Research

• Consists of depth interviews, focus groups,

metaphor analysis, collage research, and
projective techniques.
• Administered by highly trained interviewer-
analysts.
• Findings tend to be subjective.
• Findings not usually generalizable
• Small sample sizes.
 A consumer behavior
research approach that
regards the consumer
Positivism behavior discipline as an
applied marketing science.
Its main focus is on
consumer decision making.
 A postmodernist approach to
the study of consumer
Interpretivism behavior that focuses on the
act of consuming rather than
on the act of buying.
 Interpretivism

• Concerned with act of consumption

rather than in the act of buying.
• Uses qualitative research.
• Uses depth interviews.
• Often used to help make business
decisions.
 A lengthy and relatively
unstructured interview
Depth
designed to uncover a
Interviews
consumer’s underlying
attitudes and/or motivations.
 Table 2.1 Comparisons between
Positivism and Interpretivism
PURPOSE
PURPOSE
Positivism
Positivism Interpretivism
Interpretivism

Prediction
Predictionof
ofconsumer
consumer Understanding
Understandingconsumption
consumption
actions
actions practices
practices

METHODOLOGY
METHODOLOGY
Positivism
Positivism Interpretivism
Interpretivism

Quantitative
Quantitative Qualitative
Qualitative
 Table 2.1 continued
ASSUMPTIONS
Positivism
• Rationality; consumers make
decisions after weighing alternatives
• The causes and effects of behavior
can be identified and isolated
• Individuals are problem solvers who
engage in information processing
• A single reality exists
• Events can be objectively measured
• Causes of behavior can be identified,
by manipulating causes, the marketer
can influence behavior
• Findings can be generalized to larger
populations
Interpretivism
• There is no single, objective truth
• Reality is subjective
• Cause and effect cannot be isolated
• Each consumption experience is
unique
• Researcher/respondent interactions
affect research findings
• Findings are often not generalizable
to larger populations
 Combining Qualitative and
Quantitative Research Findings

• The research paradigms are complementary in

nature.
• Produce a richer and more robust profile of
consumer behavior than either research
approach used alone.
 The Consumer Research Process

• The six major steps in the consumer research

process are:
– defining the objectives of the research
– collecting and evaluating secondary data
– designing a primary research study
– collecting primary data
– analyzing the data
– preparing a report on the findings
 Figure 2.2 The Consumer Research Process

Develop Objectives

Collect Secondary Data

Design Qualitative Research Design Quantitative Research

• Method • Method
• Screener questionnaire • Sample design
• Discussion guide • Data collection instrument

Conduct Research
Collect Primary Data
(Using highly trained
(Usually by field staff)
interviewers) Exploratory
Study
Analyze Data Analyze Data
(Subjective) (Objective)

Prepare Report Prepare report

 Developing Research Objectives

• Defining purposes and objectives helps

ensure an appropriate research design.
• A statement of objectives helps to define
the type and level of information needed.
 Data that has been collected
Secondary for reasons other than the
Data specific research project at
hand.
 Collecting Secondary Data

• Secondary information is any data originally

generated for some purpose other than the
present research objectives.
• Provides clues and direction for the design of
primary research.
 Original research undertaken
by individual researchers or
Primary organizations to meet
Research specific objectives.
Collected information is
called Primary Data.
 Table 2.2 Major Sources of Secondary Data
Internal Internal sources include company profit-loss statements, balance
Sources sheets, sales figures, sales-call reports, invoices, inventory records,
and prior research reports.
Census of India, updated decenially, provides summary data on
Government demographic, economic, social, and other aspects of the Indian economy
Publications and society.
5 Year Plan documents, updated every five years, presents statistical
information for counties, cities, and other geographical units on
populations, education, employment, aggregate and median income,
housing, bank deposits, retail sales, etc.
Industry organizations reports by FICCI, Assocham, CII etc: provides
projections of industrial activity by industry and includes data on
production, sales, shipments,employment etc
Marketing Whitebook provides an annual annotated bibliography of
marketing information.
NCAER reports: independent data collected across the country and highly
suitabale for marketing and economic reseearch activities.
 Designing Primary Research

• Quantitative studies more likely for collecting

descriptive information.
• Qualitative studies may be used to get new
ideas.
Quantitative Research Designs

Method

Sample Design

Data Collection
Instrument
 Data Collection Methods

Observation

Experimentation

Surveys
 Observational Research

• Helps marketers gain an in-depth understanding of

the relationship between people and products by
watching them buying and using products.
• Helps researchers gain a better understanding of
what the product symbolizes.
• Widely used by interpretivist researchers.
 Experimentation

• Can be used to test the relative sales appeal of

many types of variables.
• Only one variable is manipulated at a time,
keeping other elements constant.
• Can be conducted in laboratories or in the
field.
 Surveys

Personal Interview

Mail

Telephone

Online
 Data Collection Instruments

Personal
Personal
Questionnaires
Questionnaires Inventories
Inventories

Attitude
Attitude Discussion
Discussion
Scales
Scales Guides
Guides
 Attitude Scales

• The three most frequently used scales are:

– Likert scales: easy for researchers to prepare
and interpret, and simple for consumers to
answer.
– Semantic differential scales: relatively easy to
construct and administer.
– Rank-order scales: subjects rank items in order
of preference in terms of some criteria.
Qualitative Data Collection Methods

Depth Focus
Interviews Groups

Projective Metaphor
Techniques Analysis
 Depth Interviews

• A lengthy non structured interview between a

respondent and a highly trained interviewer.
• Interviewer minimizes his or her own
participation after establishing the general
subject matter.
• Can provide marketers with valuable ideas
about product design and provide insights for
positioning or repositioning the product.
 Mrs. Urban India
• Self-sacrificing type :27%
• Likes being the fashion leader :21%
• Likes joint family: 71%
• Likes to shop not save: 35%
• Imitates peers in modernity: 25%
• Dreams to do what other woman don’t: 61%
• Feels life will improve: 45%
• Likes to imitate ‘rich famous’lifestyle:52%
• Believes kids must choose career: 66%
• Feels family must okay new purchase: 66%
• Feels expensive schools are worth it: 54%

Source: Study of Lowe Faces: studied over 10,000 married women who responded
to Pathfinders’ P:SNAP (Study of Nation’s Attitudes and Psychographics) :2005
 Mrs. Urban India
• Mrs ‘Hasmukh’ Popular: 27% :popular, role model , Independent-minded , not
self-sacrificing , perfect all
– TataTea Gold,Lifebuoy, Saffola, Whirlpool
• Mrs ‘Pataka’ Cool: 12%:cool metro woman, still young, goes out the most,
consulted by her husband,optimistic
– Femina, Livon, Moods
• Mrs ‘Gharelu’ Homepride: 18%:sacrificing maa, would save rather than splurge,
husband relies heavily on her wisdom
– Cadbury’s Bournvita, Catch Masala, Clinic Plus
• Mrs ‘Hey Bhagwan!’ Moaner: 12%: cooks, cleans, saves, hoards and dresses
plainly, husband takes major decisions, having gold jewellery, belongs to the lower
middle class
– Moov, Mortein Coils
• Mrs ‘Meri Awaaz Suno’ Attention Seeker: 31%: family is not modern , doesn’t like
the idea of staying in a joint family , dresses up even when she goes to the market
– Everest Pav Bhaji Masala, Active Wheel, Nilkamal Furniture

Source: Study of Lowe Faces: studied over 10,000 married women who responded to Pathfinders’ P:SNAP
(Study of Nation’s Attitudes and Psychographics) :2005
 A qualitative research
method in which about eight
to ten persons participate in
Focus Group
an unstructured group
interview about a product or
service concept.
 Focus Groups
• Consists of 8 to 10 respondents who meet with a
moderator-analyst for a focused group discussion.
• Respondents encouraged to discuss their interests,
attitudes, reactions, motives, lifestyles, feelings
about the product or product category, usage
experience, etc.
• Respondents recruited on the basis of consumer
profiles, based on specifications defined by
marketing management.
 Today’s young Asian (8-24)
• Consumption crazy
• Aspirational driven
• Money-focused yet moral
• School is important
• Success is everything
• Favorite food is fast
• Favorite drink is soft
• Preferred birthday gift a mobile phone
• Preferred sports to play are badminton and
basketball
• A secure job is the number one concern
 Contd..

• World peace as the number one change

• Wanting to be more popular ,famous
• Search the web for information, emailing,
downloading entertainment and interacting
with their friends, and games, online.
Source: synovate pax study of affluent asian adults(2005)
 Research procedures
designed to identify
consumers’ subconscious
feelings and motivations.
Projective
These tests often require
Techniques
consumers to interpret
ambiguous stimuli such as
incomplete sentences,
cartoons, or inkblots.
 Projective Techniques

• Consist of a variety of disguised “tests” that

contain ambiguous stimuli.
• Sometimes administered as part of a focus
group, but usually used with depth interviews.
• The theory is that respondents’ inner feelings
influence how they perceive stimuli.
 Metaphor Analysis
• Based on belief that metaphors are the most basic
method of thought and communication.
• Zaltman Metaphor Elicitation Technique (ZMET)
combines collage research and metaphor analysis
to bring to the surface the mental models and the
major themes or constructs that drive consumer
thinking and behavior.
• Consumer values also play an important role in
understanding consumer behavior.
 The process of dividing a
potential market into distinct
subsets of consumers and
Market
selecting one or more
Segmentation
segments as a target market
to be reached with a distinct
marketing mix.
 What is Market Segmentation?

• Who uses market segmentation?

• How does market segmentation operate?
 The process of dividing a
potential market into distinct
subsets of consumers and
Market
selecting one or more
Segmentation
segments as a target market
to be reached with a distinct
marketing mix.
 Offering the same product
Mass
and marketing mix to all
Marketing
consumers.
 Who Uses Market Segmentation?

• Marketers of consumer goods

• Retailers
• Hotels
• Industrial Manufacturers
 Establishing a specific image
Positioning for a brand in relation to
competing brands.
 Changing the way a product
is perceived by consumers in
Repositioning
relation to other brands or
product uses.
 Bases for Segmentation
• Geographic Segmentation
• Demographic Segmentation
• Psychological Segmentation
• Psychographic Segmentation
• Sociocultural Segmentation
• Use-Related Segmentation
• Usage-Situation Segmentation
• Benefit Segmentation
• Hybrid Segmentation Approaches
 The division of a total
potential market into smaller
Geographic
subgroups on the basis of
Segmentation
geographic variables (e.g.,
region, state, or city).
 Demographic Segmentation

• Age
• Sex
• Marital Status
• Income, Education, and Occupation
Psychological Segmentation

• Motivations
• Personality
• Perceptions
• Learning
• Attitudes
 Psychographic variables that
focus on activities, interests,
AIOs
and opinions. Also referred
to as Lifestyle.
 Sociocultural Segmentation

• Family Life Cycle

• Social Class
• Culture, Subculture, and Cross-Culture
 Use-Related Segmentation

• Rate of Usage
– Heavy vs. Light
• Awareness Status
– Aware vs. Unaware
• Brand Loyalty
– Brand Loyal vs. Brand Switchers
 Usage-Situation Segmentation

• Segmenting on the basis of special occasions

or situations
 Benefit Segmentation

• Segmenting on the basis of the most important

benefit sought by consumers when purchasing
the product or service
– Toothpaste can be bought for
• Good Taste (e.g., Colgate)
• Fresh Breath (e.g, Close Up)
• White Teeth (e.g, Colgate Whitener)
• Cavity Protection (e.g., Crest)
 Hybrid Segmentation Approaches

• Psychographic-Demographic Profiles
• Geodemographic Segmentation
• SRI Consulting’s Values and Lifestyle System
(VALSTM)
SRI Consulting’s Values and ACTUALIZERS
Lifestyle System (VALSTM )
High Resources

Principle Oriented Status Oriented Action Oriented

Figure 3-10:

FULFILLEDS ACHIEVERS EXPERIENCERS

BELIEVERS STRIVERS MAKERS

Low Resources
STRUGGLERS
 Figure 3.11 VALSTM 2 Segments and
Participation in Selected Sports
Percent of adults in each VALS 2 type who participated in selected sports in 1995.

Actualizers

Experiencers

Achievers

Makers

Fulfilleds

Strivers

Believers

Strugglers

0 2 4 6 8 10 12 14

Mountain/rock climbing Jet skiing/wave running/water biking Inline skating

 Table 3.6 The Size of Each VALSTM
Segment as Percent of the United States
Population
PERCENT OF
VALS TM
SEGMENT
POPULATION
Actualizer 11.7%
Fulfilled 10.5
Believer 17.0
Achiever 14.7
Striver 11.8
Experiencer 12.9
Maker 12.0
Struggler 9.5
Criteria For Effective Targeting of Market
Segments
• Identification
• Sufficiency
• Stability
• Accessibility
 Implementing Segmentation Strategies

• Concentrated Versus Differentiated Marketing

• Countersegmentation
 A strategy in which a
company combines two or
Counterseg- more segments into a single
mentation segment to be targeted with
Strategy an individually tailored
product or promotion
campaign.