CONSUMER BEHAVIOR

CHAPTER # 1 ST

 INTRODUCTION AND OBJECTIVES OF THIS

CHAPTER:
IN THIS FIRST CHAPTER, WE ARE GOING TO
DISCUSS THREE MAIN AREAS, WHICH ARE:
DEFINING THE NATURE OF CONSUMER
BEHAVIOR
APPRECIATING WHY WE SHOULD STUDY
CONSUMER BEHAVIOR
DEVEOLPING A FRAMEWORK FOR STUDYING
CONSUMER BEHAVIOR
 DEFINITION OF CONSUMER
BEHAVIOR
 THE DECISION PROCESS AND PHYSICAL
ACTIVITY INDIVIDUALS ENGAGE IN,
WHEN EVALUATING, ACQUIRING, USING
OR DISPOSING OF GOODS AND
SERVICES.
 NOW WE NEED TO UNDERSTAND SOME
BASIC TERMINOLOGIES, WHICH WE WILL
BE USING IN THIS SUBJECT:
 CONSUMER & CUSTOMER………..
 CONSUMER:
 A PERSON WHO REGULARLY PURCHASES
PRODUCTS,CONSUME IT OR HIRE
SERVICES FROM A PARTICULAR STORE
OR SERVICE PROVIDER. E.G, YOU DAILY
OR SAY AFTER 2 DAYS USE TO FILL YOUR
CAR AT SHELL GAS STATION, IN THIS
CASE YOU WILL BE CONSIDERED AS
CONSUMER OF SHELL COMPANY.
 CUSTOMER

 CUSTOMER:
 TRADITIONALLY CUSTOMERS ARE
DEFINED AS THE PURCHASERS OF
PRODUCTS AND SERVICES OFFERED FOR
SALE.
 ULTIMATE CONSUMER/END USER:
 THOSE PERSONS WHO PURCHASES FOR
THE PURPOSE OF INDIVIDUAL OR HOUSE
HOLD CONSUMPTION.
 INITIATOR/IFLUENCERS/BUYERS
 THE INDIVIDUAL BUYERS:
 MOST OF THE TIMES AN IDIVIDUAL
MAKES PURCHASE DECISION WITH
LITTLE OR NO INFLUENCES FROM
OTHERS, HOWEVER, IN SOME CASES, A
NUMBER OF PEOPLE CAN BE JOINTLY
INVOLVED IN A PURCHASE DECISION, IN
THIS CASE, DIFFERENT CONSUMER
BEHAVIOR ROLES WOULD BE:
 CONT………
 INITIATOR:
 AN INDIVIDUAL WHO IDENTIFIES A
NEED, OR PRACTICALLY INITIATES A
PURCHASE DESCISION, E.G, A WIFE MAY
ASK HER HUSBAND TO PURCHASE A PACK
OF CEREAL, AS THEIR BABY AGE HAS
INCREASED TO 6 MONTHS, AND NOW
IT’S AN ESSENTAIL FOOD REQIREMENT
FOR HIM.
 CONT……………
 THE INFLUENCER:
 THE PERSON WHO INSPIRES, AFFECT OR
GUIDES A PARTICULAR PURCHASING
DECISION, E.G, IN PREVOIUS EXAMPLE WIFE
ROLE WAS OF BOTH AS AN INITIATOR AND
INFLUENCER.
 BUYER:
 THE PERSON WHO ACTUALLY MAKES THE
PURCAHSE DECISION. E.G, IN THE PREVIOUS
EXAMPLE THE HUSBAND ROLE WAS OF A
BUYER.
 USER:
 THE PERSON WHO REALLY OR
PRACTICALLY USES THE PRODUCTS OR
CONSUME THE SERVICES.
 THE DECISION PROCESS:
 CONSUMER BEHAVIOR INVOLVES A
MENTAL DECISION PROCESS AS WELL AS
PHYSICAL ACTIVITY,i.e, ACTUAL PURCHASE
 CONT……..
 IS JUST ONE STAGE, IN SERIES OF MENTAL
AND PHYSICAL ACTIVITES THAT OCCUR
DURING A PERIOD OF TIME. SOME OF THESE
ACTIVITES TAKE PLACE BEFORE ACTUAL
BUYING WHILE OTHER FOLLOW IT.
 WHY STUDY CONSUMER BEHAVIOR:
 SIGNIFICANCE IN DAILY LIVES:
 CONSUMER BEHAVIOR HAS GOT SO MUCH
IMPORTANCE IN OUR DALIY LIFE, MOST OF
 THE TIMES WE AS AN INDIVIDUAL HAVE
TO DECIDE ABOUT VARIUOS PURCHASE
DECISIONS, THINKING ABOUT VARIOUS
PRODUCTS AND SERVICES, TALKING TO
FRIENDS ABOUT THEM, SEEING OR
HEARING ADVERTISEMENTS, SO IT
PLAYS A VERY VITAL ROLE IN
UNDERSTANDING THE BUYING
BEHAVIOR OF INDIVIDUALS.
 2. APPLICATION IN DECISION MAKING:
 COSUMER BEHAVIOR SUBJECT IS
ALWAYS VIEWED AS A AN APPLIED
DISCIPLINE, WHICH MEANS THAT IT HAS
APPLICATION BOTH TO PERSONS IN
INDIVIDUAL CAPACITY, AND TO WHOLE
SOCIETY.PEOPLE USED TO APPLY THIS
WHILE MAKING A PURCHASING
DECISIONS INDIVIDUALLY OR SOCAILLY.
 A. MICRO PERSPECTIVE:
 IT REFERS TO UNDERSTANDING THE
CONSUMERS FOR THE PURPOSE OF
HELPING A FIRM OR ORGANIZATION TO
ACCOMPLISH ITS OBJECTIVES, E.G,
ADVERTISING MANAGERS, PRODUCT
DESIGNERS ARE INTRESTED TO
UNDERSTAND CONSUMERS IN ORDER TO
BE MORE EFFECTIVE AT THEIR TASK.
 B. SOCIETAL PERSPECTIVE:
 WE NEED TO KNOW THE ECONOMIC, AND
SOCIAL CONDITIONS WITH IN A SOCIETY, OR
WE NEED TO KNOW THE CULTURE, RELIGION,
BUYING PATTERNS, PREFERENCES OF
INDIVIDUALS LIVING IN A PARTICULAR
SOCIETY, AND KEEPING WHICH IN MIND WE
FORMULATE AND IMPLEMENT OUR
STRATEGIES ACCORDINGLY.
 APPLYING CONSUMER BEHAVIOR
KNOWLEDGE
 THE UNDERSTANDING OF CONSUMER
BEHAVIOR PROVIDES A BROADER OUTLOOK,
IN UNDERSTANDING OTHER SUBJECTS AS
WELL, LETS DISCUSS:
 CONSUMER BEHAVIOR AND MARKETING
MANAGEMENT:
 MARKETING MANAGEMENT AND
UNDERSTANDING CONSUMER BEHAVIOR, THEY
ARE TWO VERY CLOSELEY CONNECTED
THINGS, A MARKETING MANAGER NEEDS TO
UNDERSTAND CONSUMER BEHAVIOR IN
OREDER TO:
 UNDERSTAND CONSUMERS NEEDS AND
WANTS:
 SPECIFYING COMPANY OBJECTIVES:
 MAKING AN INTEGRATED STRATEGY,
KEEPING IN MIND THE CONSUMER
PREFERENCES AND BEHAVIOR AND
OVERALL COMPANY RESOURCES AND
OBJECTIVES:
 MARKET OPPORTUNITY ANALYSIS:
 TARGET MARKET SELECTION:
 MARKETING MIX DTERMINATION:
 PRODUCT
 WHAT PRODUCTS TO PRODUCE?
 WHERE TO PRODUCE?
 HOW TO PRODUCE?
 WHEN TO PRODUCE?
 FOR WHOM TO PRODUCE?
 PRICE
 WHAT SHOULD BE THE PRICING
STRATEGY?
 PLACE
 WHAT AND HOW SHOULD BE THE
DISTRIBUTIONAL SET UP?
 PROMOTION
 HOW THE PROMTIONAL EFFORTS BE
DESIGNED, THE ADVERTISING
CAMPAIGN?.
 CONCLUSION
 IN THIS ERA OF COMPETITION,
UNDERSTANDING THE CONSUMER IS A
NECESSITY FOR MARKETERS. CONSUMER
NEEDS AND PREFERENCES ARE
CONTINUOUSLY CHANGING, GIVEN THE
CHANGES IN FACTORS LIKE
DEMOGRAPHICS AND LIFESTYLES. THESE
CHANGES CAN BECOME GREAT BUSINESS
OPPORTUNITIES FOR ALERT MARKETERS
AND THREATS FOR MARKETERS WHO FAIL
TO ADAPT.
 CONSUMERS ACQUIRE, CONSUME, AND
DISPOSE OFF THE PRODUCTS AND
SERVICES CREATED BY ORGANIZATIONS.
THEY GO THROUGH SEVERAL COGNITIVE
AND BEHAVIORAL PROCESSES WHILE
MAKING THEIR PURCHASE AND
CONSUMPTION DECISIONS. THE
KNOWLEDGE OF HOW THEY DECIDE ON
ONE BRAND INSTEAD OF ANOTHER AND
WHAT FACTORS INFLUENCE THEIR
DECISION-MAKING IS CRUCIAL FOR
MARKETERS, NOT ONLY TO CATER TO THE
EXISTING
 NEEDS OF THEIR CONSUMERS BUT ALSO
TO PREPARE FOR THEIR FUTURE NEEDS.
THIS KNOWLEDGE IS ALSO ESSENTIAL
TO MAKE VARIOUS BUSINESS DECISIONS
RELATED TO PRODUCT DEVELOPMENT,
PACKAGING, PRICING, DISTRIBUTION,
PROMOTIONS, COMMUNICATION, ETC.
 CONSUMER BEHAVIOR HELPS STUDENTS
UNDERSTAND THE INTERNAL VARIABLES
LIKE MOTIVATION, PERSONALITY,
PERCEPTION, LEARNING, AND ATTITUDE,
AND EXTERNAL VARIABLES LIKE
REFERENCE GROUPS, FAMILY, SOCIAL
CLASS, AND, CULTURE, AND THEIR
INFLUENCE ON CONSUMER DECISION-
MAKING PROCESS. IT ALSO DISCUSSES
THE CONSUMERS’ ACCEPTANCE OF
INNOVATION, AND THEIR PURCHASE AND
POST-PURCHASE
 BEHAVIOR. THE IMPACT OF MARKETING
COMMUNICATION ON CONSUMERS, AND
THE NEED FOR ITS REGULATION HAVE
ALSO BEEN DISCUSSED IN THE BOOK.
 “WE CAN BELIEVE THAT WE KNOW WHERE
THE WORLD SHOULD GO. BUT UNLESS
WE'RE IN TOUCH WITH OUR CUSTOMERS,
OUR MODEL OF THE WORLD CAN DIVERGE
FROM REALITY. THERE'S NO SUBSTITUTE
FOR INNOVATION, OF COURSE, BUT
INNOVATION IS NO SUBSTITUTE FOR
BEING IN TOUCH, EITHER”.