Consumer Behavior-Block-1

CONSUMER BEHAVIOUR
BLOCK
1
THE KNOW HOW OF CONSUMER
BEHAVIOR
UNIT 1
ESSENTIALS OF CONSUMER BEHAVIOR
UNIT 2
DECISION MAKING
UNIT 3
CONSUMER NEED IDENTIFICATION
UNIT 4
ANALYZING AND EVALUATING INFORMATION
UNIT 5
BASIS FOR DECISION MAKING
UNIT 6
POST PURCHASE PROCESSES

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THE KNOW HOW OF CONSUMER
BEHAVIOR
Consumer behavior is the study of individuals, groups, or organizations and the processes they use to
select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the
impacts that these processes have on the consumer and society. This block has six units.
In Unit 1, we discuss about the basics of consumer behavior. It covers the definition of consumer,
consumer behavior, importance of consumer behavior and the models of consumer decision making.
In Unit 2, we discuss the consumer involvement, nature of consumer involvement, types of consumer
buying decisions and consumer decision making process.
In Unit 3, we discuss about the consumer needs, need activation and recognition, various factors affecting
problem recognition and influence of situation on problem recognition.
In Unit 4, we discuss about the different sources of information, types of information that the consumer
seeks and different marketing strategies related to information search.
In Unit 5, we discuss about the basis for decision making. It covers alternative evaluation, consumer
decision making, the various decision rules and the purchase process.
In Unit 6, we discuss about the post purchase processes. It covers formation of satisfaction/dissatisfaction,
post-purchase dissonance, and marketers’ response strategies.
UNIT 1: ESSENTIALS OF CONSUMER BEHAVIOR
Structure
1.1 Introduction
Objectives
1.2 Importance of Consumer Behavior study
1.3 Defining consumer
1.4 Models for consumer decision making
1.5 Summary
1.6 Key words
1.7 Self-Assessment questions
1.8 Answers to SAQ’s
1.9 Further readings
1.10 References
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1.1 INTRODUCTION
Customer is profit, all else is overload....
All of us are consumers. We consume things of daily use; we also consume and buy these products
according to our needs, preferences and buying power. These can be consumable goods, durable goods,
specialty goods or, industrial goods.
What we buy, how we buy, where and when we buy, in how much quantity we buy depends on our
perception, self-concept, social and cultural background and our age and family cycle, our attitudes,
beliefs values, motivation, personality, social class and many other factors that are both internal and
external to us. While buying, we also consider whether to buy or not to buy and, from which source or
seller to buy. In some societies there is a lot of affluence and, these societies can afford to buy in greater
quantities and at shorter intervals. In poor societies, the consumer can barely meet his barest needs.
The marketers therefore try to understand the needs of different consumers and having understood his
different behaviors which require an in-depth study of their internal and external environment, they
formulate their plans for marketing.
Objectives:
After reading this unit, the student would be able to:

 Appreciate the importance of consumer behavior.
 Basic understanding about consumers.
 Understand consumer decisions.
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1.2 IMPORTANCE OF CONSUMER BEHAVIOR STUDY
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Why to Study Consumer Behavior?
Within the study of Marketing Management, the "Consumers" or the "Customers" play a very critical role
as these are the people who finally BUY the goods & services of the organization, and the firm is always
on the move to make them buy so as to earn revenue. It's crucial from both the points of view as given
below:
From the customers' point of view
Customers today are in a tough spot. Today, in the highly developed & technologically advanced society,
the customers have a great deal of choices & options (and often very close & competing) to decide on.
 They have the products of an extreme range of attributes (the 1st P - Product),
 They have a wide range of cost and payment choices (the 2nd P - Price),
 They can order them to be supplied to their door step or anywhere else (the 3rd P - Place),
 They are bombarded with more communications from more channels than ever before (the 4th P -
Promotion).
How can they possibly decide where to spend their time and money, and where they should give their
loyalty?
From the marketers' point of view
"The purpose of marketing is to sell more stuff to more people more often for more money in order to
make more profit". This is the basic principle of requirement for the marketers in earlier days where
aggressive selling was the aim. Now it can't be achieved by force, aggression or plain alluring. For the
customers are today more informed, more knowledgeable, more demanding, more discerning. And above
all there is no dearth of marketers to buy from. The marketers have to earn them or win them over.
The global marketplace is a study in diversity, diversity among consumers, producers, marketers,
retailers, advertising media, cultures, and customs and of course the individual or psychological behavior.
However, despite prevailing diversity, there also are many similarities. The object of the study of
consumer behavior is to provide conceptual and technical tools to enable the marketer to apply them to
marketing practice, both profit & non-profit.
The study of consumer behavior (CB) is very important to the marketers because it enables them to
understand and predict buying behavior of consumers in the marketplace; it is concerned not only with
what consumers buy, but also with why they buy it, when and where and how they buy it, and how often
they buy it, and also how they consume it & dispose it.
Consumer research is the methodology used to study consumer behavior; it takes place at every phase of
the consumption process: before the purchase, during the purchase, and after the purchase. Research
shows that two different buyers buying the same product may have done it for different reasons; paid
different prices, used in different ways, have different emotional attachments towards the things and so
on.
According to Professor Theodore Levitt of the Harvard Business School, the study of Consumer Behavior
is one of the most important in business education, because the purpose of a business is to create and keep
customers. Customers are created and maintained through marketing strategies. And the quality of
marketing strategies depends on knowing, serving, and influencing consumers. In other words, the
success of a business is to achieve organizational objectives, which can be done by the above two
methods.
This suggests that the knowledge & information about consumers is critical for developing successful
marketing strategies because it challenges the marketers to think about and analyze the relationship
between the consumers & marketers, and the consumer behavior & the marketing strategy.
Consumer behavior is interdisciplinary; that is, it is based on concepts and theories about people that have
been developed by scientists, philosophers & researchers in such diverse disciplines as psychology,
sociology, social psychology, cultural anthropology, and economics.
The main objective of the study of consumer behavior is to provide marketers with the knowledge and
skills that are necessary to carry out detailed consumer analyses which could be used for understanding
markets and developing marketing strategies.
Thus, consumer behavior researchers with their skills for the naturalistic settings of the market are trying
to make a major contribution to our understanding of human thinking in general.
The study of consumer behavior helps management understand consumers' needs so as to recognize the
potential for the trend of development of change in consumer requirements and new technology. And also
to articulate the new thing in terms of the consumers' needs so that it will be accepted in the market well.
The need of consumer behavior holds a great interest not only for the marketers but for other
professionals also such as consumers, doctors, students, decision makers or strategy makers.
1. Importance for consumers: As consumer, we benefit from insights into our own consumption –
related decisions like – what we buy, how we buy, and the promotional influences that persuade us to
buy. The knowledge of consumer behavior helps us to become better consumer, who can identify
what is good or bad for him.
2. Importance for marketers: Study of consumer behavior help unearth much information to help
marketers to segment markets, selection of target segment, developing the positioning strategy and ,
develop appropriate marketing mixes for different markets and group of consumers.
3. Importance for the students of human behavior: As student of consumer behavior, we are
concerned with understanding consumer behavior with gaining the insights into why individuals act
in certain consumption related ways and learning what internal and external influence impel them to
act as they do. Indeed, the desire for understanding the consumption – related human behavior has
lead to variety of theoretical approaches to its study.
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4. Application to Decision maker: Consumer is often studied because certain decisions are
significantly affected by the behavior or expected actions. For this reason consumer behavior is said
to be an applied discipline. Such application can exit two different levels of analysis. The micro
prospective seeks application of this knowledge to problem faced by the individual firms. The societal
prospective applies knowledge of consumers to aggregate – level problems faced by large groups or
by society as whole.
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1.3 DEFINING CONSUMER
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Who is Consumer?
Consumer is an individual who buys products or services for personal use and not for manufacture
or resale. A consumer is someone who can make the decision whether or not to purchase an item at
the store, and someone who can be influenced by marketing and advertisements. Any time someone goes
to a store and purchases a toy, shirt, beverage, or anything else, they are making that decision as a
consumer.
A person who has indicated his or her willingness to obtain goods and/or services from a supplier with the
intention of paying for them or someone who has purchased goods and/or services for personal
consumption.
What do I mean by Consumer Behavior?
Consumer behavior can be defined as the decision-making process and physical activity involved in
acquiring, evaluating, using and disposing of goods and services. This definition clearly brings out that it
is not just the buying of goods/services that receives attention in consumer behavior but, the process starts
much before the goods have been acquired or bought.
A process of buying starts in the minds of the consumer, which leads to the finding of alternatives
between products that can be acquired with their relative advantages and disadvantages. This leads to
internal and external research. Then follows a process of decision-making for purchase and using the
goods, and then the post purchase behavior which is also very important, because it gives a clue to the
marketers whether his product has been a success or not.
Consumer behavior is a complex, dynamic, multidimensional process, and all marketing decisions are
based on assumptions about consumer behavior.It’s a science of how consumers-individual or groups-
acquire, use and dispose products, services and experiences.
There can be many benefits of a product, for example, for owning a motor bike one can be looking for
ease of transportation, status, pleasure, comfort and feeling of ownership. The cost is the amount of
money paid for the bike, the cost of maintenance, gasoline, parking, risk of injury in case of an accident,
pollution and frustration such as traffic jams. The difference between this total benefit and total cost
constitutes the customer value.
The discipline of consumer behavior has borrowed heavily from various other concepts such as
psychology, sociology, social psychology, cultural anthropology and economics.
Psychology: is the study of individual which include motivation, perception, attitudes, and personality
and learning theories. All these factors are very essential to understand in order to identify the consumer
pattern of consumption, their action and responses towards different promotional messages and
personality characteristics that influence products choice.
Sociology: refers to the study of groups. When individual forms groups, their actions are different from
the actions of those individuals who are operating alone. The influence of family members, social class or
group memberships on consumer behavior is important for the study of consumer behavior.
Social Psychology: It is the combination of sociology and psychology and help in understanding how an
individual works in a group.
Cultural Anthropology: is the study of human beings as a part of a society. It explains the development
of beliefs, values and customs that individual inherent from their parents which directly influence their
purchasing as well as consumption patterns.
Economics: explains how consumers spend their funds, how they evaluate alternatives and how they
make decisions to get maximum satisfaction from their purchase.
Despite the fact that the consumer behavior as a field of study is relatively of recent origin, it has grown
enormously and has become a full –blown discipline of its own and is used in the study of most of the
programmes of marketing to understand the consumer buying behavior and identify their needs and
wants.
Buying behavior of a customer is very much influence by various factors such as- marketing stimuli,
opinion of others designing and packaging of the product and its appeal or appearance. So consumer
behavior can be looked upon as a study how individuals make a decisions on how to spend their available
resources like time, money and efforts on various consumption related items.
A marketer must know the answers of the following questions.

 What makes a consumer to buy particular product/brand?
 How do they buy them?
 From where do they buy these products?
 Frequency of their buying these products?
 When do they buy them?
The answer to these questions can be obtained only by understanding consumer behavior. Further, these
answers will lead us to understand what factors influence the decision making process of consumer.
The process of buying is very much affected by selective information received by the customer, it very
essential to understand what and how much information is required by the consumer to help him in taking
his/her buying decision or for the evaluation of products and services. Therefore it is said that consumer
behavior is dynamic, involves interactions, and involve exchange function. Consumer behavior also
focuses on how individual make decisions their available resources on the consumption related items.
That also includes –
a) What all they buy?

b) Why they buy?
c) From where they buy?
d) How often they buy the product and services?
e) What satisfy them after purchase?
Consumer Behavior Defined:
According to Solomon,” Consumer behavior is the process of involved when individuals or groups
select, purchase, use, or dispose of products and services, ideas or experiences to satisfy the needs and
wants.”
According to the American Marketing Association,” The dynamics interaction of affect and cognition,
behavior, and the environment by which human beings conduct the exchange aspects of their lives.”
According to James F. Engel, Roger D. Blackwell and Paul W. Miniard, (1990)

“Consumer behavior referred to the mental and emotional process and the observable behavior of
consumers during searching for, purchasing and post consumption of the product or services.”
According to Belch and Belch,” Consumer behavior is the process and the activities in which people
engage in, when searching for, selecting, purchasing, using, evaluating and disposing of products and
services so as to satisfy their needs.”
According to Webster,” Buyer behavior is all psychological, social, and physical behavior of potential
customers as they become aware of, evaluates, purchase, consume, and tell other people about products
and services.”
The above definition can be analyzed in following way:
 Consumer behavior is a 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.
Hence, the study of consumer behavior is an important field of study and it is separate branch in the
marketing discipline. Marketers now understood that consumer did not always behave in a same manner
as of now they have lots of alternatives with them so their buying behavior is different in different
situation. Further the principles of consumer behavior is applied in many areas of marketing such as
analyzing market opportunity, selecting target market, market mix decisions etc.
The marketing strategies now a day’s concentrating more on individual customers rather than mass
marketing concept, as each consumer is differ from other. The main cause of it is difference in likes and
dislikes of individual, demographic characteristics such as economic and educational background, culture,
perception, attitude etc.
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1.4 MODELS FOR CONSUMER DECISION MAKING
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Models of Consumer Decision Making:
The consumer buying decision and consumption process of products or services always take place in the
context of some specific situation. There are various types of consumer decision processes. It is useful to
view purchase decision involvement as a continuum and as the consumer moves from a low level of
involvement with the purchase situation to a high level of involvement, purchase decision- making
becomes progressively complex.
Based on the amount of efforts that goes into decision making, consumer researchers have found it
convenient to think that on one end is the habitual purchase decision making or nominal decision making
and at the other end extended decision making. Many decisions are fall somewhere in the middle and are
featured by limited decision making. It should be kept in mind that the type of decision processes are not
distinct but rather blend into each other.
Consumer Behavior Theory: Approaches and Models
Consumer decision making has long been of interest to researchers. Beginning about 300 years ago early
economists, led by Nicholas Bernoulli, John von Neumann and Oskar Morgenstern, started to examine
the basis of consumer decision making. This early work approached the topic from an economic
perspective, and focused solely on the act of purchase.
The most prevalent model from this perspective is ‘Utility Theory’ which proposes that consumers make
choices based on the expected outcomes of their decisions. Consumers are viewed as rational decision
makers who are only concerned with self-interest.
Theoretical approaches to the study of consumer behavior

A number of different approaches have been adopted in the study of decision making, drawing on
differing traditions of psychology. Writers suggest different typological classifications of these works
with five major approaches emerging. Each of these five approaches posits alternate models of man, and
emphasizes the need to examine quite different variables they will briefly be introduced in turn.
• Economic Man
• Psychodynamic
• Behaviorist
• Cognitive
• Humanistic
Economic Man:
Early research regarded man as entirely rational and self-interested, making decisions based upon the
ability to maximize utility whilst expending the minimum effort.In order to behave rationally in the
economic sense, as this approach suggests, a consumer would have to be aware of all the available
consumption options, be capable of correctly rating each alternative and be available to select the
optimum course of action.
These steps are no longer seen to be a realistic account of human decision making, as consumers rarely
have adequate information, motivation or time to make such a ‘perfect’ decision and are often acted upon
by less rational influences such as social relationships and values.
Psychodynamic Approach
The psychodynamic tradition within psychology is widely attributed to the work of Sigmund Freud
(1856-1939). This view posits that behavior is subject to biological influence through ‘instinctive forces’
or ‘drives’ which act outside of conscious thought. While Freud identified three facets of the psyche,
namely the Id, the Ego and the Superego, other theorists working within this tradition, most notably Jung
identified different drives.
The key tenet of the psychodynamic approach is that behavior is determined by biological drives, rather
than individual cognition, or environmental stimuli.
Behaviorist Approach
In 1920 John B. Watson published a landmark study into behavior which became known as ‘Little
Albert’. This study involved teaching a small child (Albert) to fear otherwise benign objects through
repeated pairing with loud noises. The study proved that behavior can be learned by external events.
Essentially Behaviorism is a family of philosophies stating that behavior is explained by external events,
and that all things that organisms do, including actions, thoughts and feelings can be regarded as
behaviors. The causation of behavior is attributed to factors external to the individual.While behavioral
research still contributes to our understanding of human behavior, it is now widely recognized as being
only part of any possible full explanation. Behaviorism does not appear to adequately account for the
greatdiversity of response generated by a population exposed to similar, or even nearidentical stimuli.
The Black Box model:
This Model also called the Stimulus Response Model is based on the Philosophical Theory of
Behaviorism, which uses a metaphor of a black box to represent the human mind, the internal processes
that are unknown, and learning happens when a correct response is demonstrated following the
presentation of a specific environmental stimulus. Emphasis is put on external, environmental variables
and behavior, where those are observable and measureable.
Buyers Black Box
It is called the 'black box' model because we still know so little about how the human mind works. We
cannot see what goes on in the mind and we don't really know much about what goes on in there, so it's
like a black box. As far as consumer behavior goes, we know enough to be able to identify major internal
influences and the major steps in the decision-making process
which consumers use, but we don't really know how consumers transform all these data, together with the
stimuli, to generate particular responses.
The essence of the model is that it suggests consumers will respond in particular ways to different stimuli
after they have 'processed' those stimuli in their minds. In more detail, the model suggests that factors
external to the consumer will act as a stimulus for behavior, but that the consumer's personal
characteristics and decision-making process will interact with the stimulus before a particular behavioral
response is generated.
The Black Box model shows the interaction between Marketing stimuli, Environmental stimuli, buyer
characteristics, the decision process and the outputs or consumer responses.
Marketing stimuli comprises all its 4 P's while the environmental stimuli are composed of social,
economic, technological and political variables. All of these stimuli have a direct effect on the consumer's
"black box" where the buyer's characteristics such have attitudes, perception or personality and decision
process will produce an adequate response.
This model recognizes the black box has a place of rational decision making where the decision process is
carried out in its full extension. But we now know that irrational decisions are made, and this is a decisive
critique to the model.
As an extension of Behaviorism this knowledge is based mainly on philosophical research and thought
and not in science. All the variables shown are accepted in most models but the core of this theory the
black box has been broken down today and it is no more a dark place, in recent neuroscience advances
and research we know what physiological processes are involved in decision making and how they affect
and influence our responses.
Howard Sheath Model/ Theory of Buyer Behavior:
The Howard and Sheth model was proposed in the 1960s, for industrial buying situations. Today, the term
“buyer” is used to connote both industrial consumers and personal consumers. Through the model,
Howard and Sheth, tried to explain buyer rationality while making purchase decisions even in conditions
of incomplete information. While they differentiated between three levels of decision making, EPS, LPS
and RPS, the model focuses on repeat buying/purchase.
The model has four major components, viz., stimulus inputs (input variables), hypothetical constructs,
response outputs (output variables), and, exogenous variables. Through their model, Howard and Sheth
explain the buying decision process that a buyer undergoes, and the factors that affect his choice decision
towards a brand. The process starts when the buyer is exposed to a stimulus.
As a result of the exposure, stimulus ambiguity occurs, which leads to an overt search for information.
The information that is received is contingent upon the interplay between the attitudes and the motives. In
other words, the search for information and the conclusions drawn would be filtered by perceptual bias
(that would be a result of attitude, confidence, search and motives).
It may alter the existing patterns of motives and choice criteria, thereby leading to a change in the attitude
towards the brand, brand comprehension, motives, purchase intention and/or action. The final purchase
decision is based on the interaction between brand comprehension, strength of attitudes towards the
brand, confidence in the purchase decision and purchase intention.
The actual purchase is influenced by the buyer's intentions and inhibitors, which he confronts. The entire
process is impacted by various exogenous variables like the importance of purchase, price, time available
to make the purchase, social and cultural influences etc. After the purchase, the buyer experiences
satisfaction if the performance matches and exceeds expectation; this satisfaction would strengthen brand
comprehension, reinforce the confidence associated with the buying situations, and strengthen the
intention to repeat purchase of the brand. With a satisfying purchase decision, the buyer learns about
buying in similar situations and the behavior tends to get routinized. The purchase feedback thus
influences the consumers’ attitudes and intention.
The model is an integrative model that incorporates many of the aspects of consumer behavior; it links
together the various constructs/variables which may influence the decision making process and explains
their relationship that leads to a purchase decision. It was one of the first models to divulge as to what
constitutes loyalty towards a specific product. It helped gain insights in to the processes as to how
consumers’ process information.
The model is user friendly and is one of the few models which has been used most commonly and tested
in depth. However, the limitation lies in the fact that the various constructs cannot be realistically tested;
some of the constructs are inadequately defined, and thus do not lend to reliable measurements.
Engel-Kollat-Blackwell Model
The EKB model of consumer behavior was originally framed during the period of 1968 to provide an
overall overview of a consumers’ personality. This model was created to describe the increasing, fast-
growing body of knowledge concerning consumer behavior. This model, like in other models, has gone
through many revisions to improve its descriptive ability of the basic relationships between components
and sub-components; this model consists also of four stages;
First stage: decision-process stages
The central focus of the model is on five basic decision-process stages: Problem recognition, search for
alternatives, alternate evaluation (during which beliefs may lead to the formation of attitudes, which in
turn may result in a purchase intention) purchase, and outcomes. But it is not necessary for every
consumer to go through all these stages; it depends on whether it is an extended or a routine problem-
solving behavior.
Input Information Decision Process Variables Influencing

Problem
Processing Precision Process
Exposure Individual
Recognition
Internal Characteristics:
Search
search
Beliefs
Attention Motives
M
Stimuli:
E Alternative
Marketer-
Attitude
Dominated, evaluation Social
M
Comprehension
Influences :
Perception Intention
O
Culture
Yielding/ R
Purchase
Acceptance Situational
Influences
Retention
Outcomes
External
search
Dissatisfaction Satisfaction
Source: Engel , Blackwell, and Miniard,(1995) page No 95
Second stage: Information input

At this stage the consumer gets information from marketing and non-marketing sources, which also
influence the problem recognition stage of the decision-making process. If the consumer still does not
arrive to a specific decision, the search for external information will be activated in order to arrive to a
choice or in some cases if the consumer experience dissonance because the selected alternative is less
satisfactory than expected.
Third stage: information processing
This stage consists of the consumer’s exposure, attention, perception, acceptance, and retention of
incoming information. The consumer must first be exposed to the message, allocate space for this
information, interpret the stimuli, and retain the message by transferring the input to long-term memory.
Fourth stage: variables influencing the decision process
This stage consists of individual and environmental influences that affect all five stages of the decision
process. Individual characteristics include motives, values, lifestyle, and personality; the social influences
are culture, reference groups, and family. Situational influences, such as a consumer’s financial condition,
also influence the decision process.
This model incorporates many items, which influence consumer decision-making such as values, lifestyle,
personality and culture. The model did not show what factors shape these items, and why different types
of personality can produce different decision-making? How will we apply these values to cope with
different personalities? Religion can explain some behavioral characteristics of the consumer, and this
will lead to better understanding of the model and will give more comprehensive view on decision-
making.
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1.7 SUMMARY
Consumers are the king and all the marketing strategies revolve around them. Consumer behavior is the
behavior of consumers which they display in the purchase process. This is very important for marketers to
understand consumer behavior and respond accordingly to serve consumers in the optimum manner.
Consumer decision making models helps marketers to understand consumers well.
1.6 KEY WORDS
Consumer: A person who purchases goods and services for personal use.
Consumer Behavior: Consumer behavior is the study of individuals, groups, or organizations

and the processes they use to select, secure, use, and dispose of
products, services, experiences, or ideas to satisfy needs and the impacts
that these processes have on the consumer and society.
Consumer Decision Making: Process by which (1) consumers identify their needs, (2) collect
information, (3) evaluate alternatives, and (4) make the
purchase decision.
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1.7 SELF ASSESSMENT QUESTIONS
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1. What is Consumer Behavior?
2. Define Consumers. Explain importance of consumer behavior?
3. Explain consumer decision making models in detail.
1.8 ANSWERS TO SAQ’S
Refer the relevant text in this unit for answer to SAQ’s.
1.9 FURTHER READING:

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1 Matin Khan, “Consumer Behaviour”: 2nd ed. New Age International Publishers 2004.
2 Blackwell, Miniard and Engel (2006). Consumer Behaviour (10th Ed.). Thomson Learning.
3 Loudon, D.L. (1988), Consumer Behavior: Concepts and Applications, McGraw Hill, London.
4 Schiffman, L.G. (1993), Consumer Behavior, Prentice Hall International, London.
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1.10 REFERENCES
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 Schiffman, L.G. (1993), Consumer Behavior, Prentice Hall International, London.
 Philip Kotler “Marketing Management” , Prentice Hall of India Pvt. Ltd.
 Philip Kotler and Gary Armstrong (1996) “Principles of Marketing” seventhedition, prentice Hall of India
Pvt. Ltd., New Delhi.
BOOKS
• Cunningham and Cunningham (1981). Marketing A Managerial ApproachSouth Western Publishing co.
• Gandhi J. C. (1991), Marketing A Managerial Introduction, Tata MC GrawHill publishing house
• Glenn Walters, (1974). Consumer Behavior – Theory and practice
• Gopalaswamy T. P. (1995). Rural Marketing, Wheeler publishing house
• Gupta, R. D. (1994). Keynes, Post Keynesian Economics Kalyani Publishers.
• Hoyer ad Maccinnis (1999) “Consumer behaviour”.
• James F. engel and Rogen D Black well (1986), consumer behaviour
• John A. Howard (1990). Consumer behaviour in Marketing strategy PrenticeHall international edition
• Keith Blosis (2000) Marketing, Oxford University Press
• Mahajan, B.M.(1980) Consumer Behavior in India (An economic study), NewDelhi
• MS Raju (2013) “Consumer Behavior- Concepts, Applications and cases”, Vikas Publications, New Delhi
• Philip Kotler “Marketing Management” , Prentice Hall of India Pvt. Ltd.
• Philip Kotler and Gary Armstrong (1996) “Principles of Marketing” seventhedition, prentice Hall of India Pvt. Ltd.,
New Delhi.
• RamneekKapoor (2012), “Consumer Behaviour”,Tata MC GrawHill publishing house
• Suja R Nair(2011), “Consumer Behavior in Indian Perspective”, Himalaya Publishing House
UNIT 2: DECISION MAKING
Structure
2.1 Introduction
Objectives
2.2 The consumer decision making
2.3 Types of decisions
2.4 Summary
2.5 Key words
2.9 References
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2.1 INTRODUCTION
The thought process of selecting a logical choice from the available options. When trying to make a
good decision, a person must weight the positives and negatives of each option, and consider all the
alternatives. For effective decision making, a person must be able to forecast the outcome of each option
as well, and based on all these items, determine which option is the best for that particular situation.
Objectives:
 Appreciate the importance of consumer involvement.
 Basic understanding about consumer decision making process.
 Understand types of consumer decisions.
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2.2 THE CONSUMER DECISION MAKING
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What is Consumer Involvement?
Consumer involvement is defined as a state of mind that motivates consumers to identify with
product/service offerings, their consumption patterns and consumption behavior. Involvement creates
within consumers an urge to look for and think about the product/service category and the varying options
before making decisions on brand preferences and the final act of purchase.
It is the amount of physical and mental effort hat a consumer puts into a purchase decision. It creates
within a person a level of relevance or personal importance to the product/service offering and this leads
to an urge within the former to collect and interpret information for present/future decision making and
use.
Involvement affects the consumer decision process and the sub processes of information search,
information processing, and information transmission. As Schiffman has put it “Involvement is a
heightened state of awareness that motivates consumers to seek out, attend to, and think about product
information prior to purchase”. It is the perceived interest and importance that a consumer attaches to the
acquisition and consumption of a product/service offering.
Herbert Krugman, a researcher is credited with his contribution to the concept of consumer involvement.
According to him, consumers approach the marketplace and the corresponding product/service offerings
with varying levels and intensity of interest and personal importance. This is referred to as consumer
involvement.
Involvement of consumers while makes purchase decisions varies across persons, across product/service
offerings in question as well as purchase situations and time at hand. Some consumers are more involved
in purchase processes than others. For example, a person who has a high level of interest in a product
category would expend a lot of time making a decision with regard to the product and the brand. He
would compare brands across features, prices etc. Another example is a person who is risk aversive; he
would also take a longer time making a decision.
Involvement also varies across product/service offerings. Some products are high involvement products;
these are products that are high in value and expensive, possess sufficient amount of risk, are purchased
infrequently, and once purchased, the action is irrevocable, i.e. they cannot be returned and/or exchanged.
On the other hand, there are low involvement products, which are moderately expensive or generally
inexpensive, possess little risk and are purchased regularly on a routine basis. Further, such consumer
involvement based on their personal traits or on the nature of product/service offering is also impacted by
the buying situation and time in hand for making purchase decisions. Very often, due to time constraints
or emergency situations, a consumer may expend very little time on the purchase decision and buying
activity in spite of the fact that the consumer is highly involved or risk aversive or the product is a high
involvement one.
The level of involvement

It reflects how personally important or interested you are in consuming a product and how much
information you need to make a decision. The level of involvement in buying decisions may be
considered a continuum from decisions that are fairly routine (consumers are not very involved) to
decisions that require extensive thought and a high level of involvement. Whether a decision is low, high,
or limited, involvement varies by consumer, not by product, although some products such as purchasing a
house typically require a high-involvement for all consumers. Consumers with no experience purchasing
a product may have more involvement than someone who is replacing a product.
Nature of Consumer Involvement:
1. It is an inner urge that creates within an individual an interest/desire to hold certain product/service
offerings in greater relevance/importance.
2. Involvement possesses certain properties:

It has a level of strength and intensity that determines the degree of involvement that a consumer
possesses. This could be high or low. A highly involved consumer would actively search for information
and collect facts, compare the various brands against each other on the basis of the information, assess
differences and similarities between the various alternatives and finally make a choice. In other words,
they collect process and integrate information very intensely, and finally arrive at a decision regarding the
brand choice. On the other hand, a consumer low on involvement would not make so much of effort in
collecting and processing information about varying alternative brands and taking a decision.
The length of time that the consumer remains in this heightened state determines the level of persistence.
It could be short term and situational interest in the product/service category; or it could be long term and
enduring.
It is directed towards any or all of the elements of the marketing mix. A person may show involvement
towards the product (its features/attributes and benefits), the price, the store or the dealer or even the
promotional effort (advertisement/sales promotion etc).
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2.3 TYPES OF DECISIONS
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Types of Consumer buying decisions
Consumers often engage in routine response behavior when they make low-involvement decisions—that
is, they make automatic purchase decisions based on limited information or information they have
gathered in the past. For example, if you always order a Diet Coke at lunch, you’re engaging in routine
response behavior. You may not even think about other drink options at lunch because your routine is to
order a Diet Coke, and you simply do it. Similarly, if you run out of Diet Coke at home, you may buy
more without any information search.
Some low-involvement purchases are made with no planning or previous thought. These buying decisions
are called impulse buying. You might see a roll of tape at a check-out stand and remember you need one
or you might see a bag of chips and realize you’re hungry or just want them. These are items that are
typically low-involvement decisions. Low-involvement decisions aren’t necessarily products purchased
on impulse, although they can be.
By contrast, high-involvement decisions carry a higher risk to buyers if they fail, are complex, and/or
have high price tags. A car, a house, and an insurance policy are examples. These items are not purchased
often but are relevant and important to the buyer. Buyers don’t engage in routine response behavior when
purchasing high-involvement products. Instead, consumers engage in what’s called extended problem
solving, where they spend a lot of time comparing different aspects such as the features of the products,
prices, and warranties.
High-involvement decisions can cause buyers a great deal of postpurchase dissonance (anxiety) if they are
unsure about their purchases or if they had a difficult time deciding between two alternatives. Companies
that sell high-involvement products are aware that postpurchase dissonance can be a problem. Frequently,
they try to offer consumers a lot of information about their products, including why they are superior to
competing brands and how they won’t let the consumer down. Salespeople may be utilized to answer
questions and do a lot of customer “hand-holding.” Limited problem solving falls somewhere between
low-involvement (routine) and high-involvement (extended problem solving) decisions. Consumers
engage inlimited problem solving when they already have some information about a good or service but
continue to search for a little more information.
Assume you need a new backpack for a hiking trip. While you are familiar with backpacks, you know that
new features and materials are available since you purchased your last backpack. You’re going to spend
some time looking for one that’s decent because you don’t want it to fall apart while you’re traveling and
dump everything you’ve packed on a hiking trail. You might do a little research online and come to a
decision relatively quickly. You might consider the choices available at your favorite retail outlet but not
look at every backpack at every outlet before making a decision. Or you might rely on the advice of a
person you know who’s knowledgeable about backpacks. In some way you shorten or limit your
involvement and the decision-making process.
Products, such as chewing gum, which may be low-involvement for many consumers often use
advertising such as commercials and sales promotions such as coupons to reach many consumers at once.
Companies also try to sell products such as gum in as many locations as possible. Many products that are
typically high-involvement such as automobiles may use more personal selling to answer consumers’
questions.
Brand names can also be very important regardless of the consumer’s level of purchasing involvement.
Consider a low- versus high-involvement decision—say, purchasing a tube of toothpaste versus a new
car. You might routinely buy your favorite brand of toothpaste, not thinking much about the purchase
(engage in routine response behavior), but not be willing to switch to another brand either. Having a
brand you like saves you “search time” and eliminates the evaluation period because you know what
you’re getting.
Buying Behaviors:
The process by which individuals search for, select, purchase, use, and dispose of goods and services, in
satisfaction of their needs & wants.
Types of Buying Behaviors:

Complex Buying Behavior: At this level, the consumer needs a great deal of information to establish a
set of criteria on which to judge specific brands and a correspondingly large amount of information
concerning each of the brands to be considered. The buyer is very well aware of the product class, know
the brands and also have preference among the brands. So the buyers have to take very few decisions for
the purchase of such type of goods.
Dissonance- Reducing Buying Behavior: At this level consumers already have establish the criteria for
evaluating the product category and the various brands in the category. However, they have not fully
established preferences concerning a selecting group of brands. Their search for additional information is
more like fine- tuning they must gather additional brand information to discriminate among the various
brands.
Habitual Buying Behavior: At this level, consumers have some experience with the product category
and a well establish set of criteria with which to evaluate the brands they are considering. In some
situations, they may search for a small amount of additional information, in other; they simply review
what they already know.
Variety- Seeking Buying Behavior: Some buying situations are featured by low involvement but
significant brand differences; here consumers often do a lot of brand switching. The market leaders will
try to encourage habitual buying behavior by dominating the self-space, avoiding out of stock conditions.
Consumer Decision Making Process:

The decision-making process consists of a series of steps which the consumer undergoes.
First of all, the decision is made to solve a problem of any kind. This maybe the problem of creating a
cool atmosphere in your home. For this, information search is carried out, to find how the cool
atmosphere can be provided, e.g. by an air-conditioner or, by a water-cooler. This leads to the evaluation
of alternatives and a cost benefit-analysis is made to decide which product and brand image will be
suitable, and can take care of the problem suitably and adequately. Thereafter the purchase is made and
the product is used by the consumer. The constant use of the product leads to the satisfaction or
dissatisfaction of the consumer, which leads to repeat purchases, or to the rejection of the product.
The marketing strategy is successful if consumers can see a need which a company’s product can solve
and, offers the best solution to the problem. For a successful strategy, the marketer must lay emphasis on
the product/brand image in the consumer’s mind. Position the product according to the customers likes
and dislikes. The brand which matches the desired image of a target market sells well.
1. Problem recognition:
Problem recognition is the first stage of the consumer decision process. It results when a consumer
recognizes a difference of sufficient degree between what is perceived as the desired state of affairs and
what is the actual state of affairs, enough to arouse and activate the decision process.
Consumers must become aware of the problem or need through processing of information arising
internally or externally. Then they become motivated. Thus the process of problem recognition means that
the consumer becomes aroused and activated, engaged in some purposeful purchase- decision activity.
This motivation to resolve a particular problem, however, depends on two factors: Magnitude of
discrepancy between the devised and actual state, and the importance of the problem. Hence an actual
state is the way an individual perceives his or her feelings and situations to be at the present time.
2. Search and Evaluating:

The term “search” refers to the mental as well as physical information seeking and processing activities
which one engages in to facilitate decision making regarding some goal- object in the market place.
Internal Search:
It’s the first stage to occur after the consumer experience problem recognition. It is a mental process of
recalling and reviewing information stored memory that may relate to purchase situation. The consumer
relies on any attitude, information, or post experiences that have been stored in memory and can be
recalled for application to the problem.
As consumers have been exposed to advertising messages over a long period and had previous purchase
experience with a brand, there are chances that considerable information are stored in their memories. The
result or outcome of internal search and alternative evaluation may be that a consumer-
• Makes a decision and proceeds to engage in purchase behavior.
• Is limited by certain environmental factors; or
• Determines that insufficient or inadequate information exists in his memory to make an
immediate decision.
External Search:
This refers to the process of obtaining information from other sources in addition to that which can be
recalled from memory. Some of the sources of information are advertisements, friends, sales people, store
displays etc.
3. Alternative evaluation
Once the information collected, the consumer will be able to evaluate the different alternatives that offer
to him, evaluate the most suitable to his needs and choose the one he think it’s best for him. In order to do
so, he will evaluate their attributes on two aspects. The objective characteristics (such as the features and
functionality of the product) but also subjective (perception and perceived value of the brand by the
consumer or its reputation).
Each consumer does not attribute the same importance to each attribute for his decision and his Consumer
Buying Decision Process. And it varies from one shopper to another. Mr. Shyammay prefer a product for
the reputation of the brand X rather than a little more powerful but less known product. While Mrs. Jaya
has a very bad perception of that same brand. The consumer will then use the information previously
collected and his perception or image of a brand to establish a set of evaluation criteria, desirable or
wanted features, classify the different products available and evaluate which alternative has the most
chance to satisfy him.
The higher the level of involvement of the consumer and the importance of the purchase are stronger, the
higher the number of solutions the consumer will consider will be important. On the opposite, the number
of considered solutions will be much smaller for an everyday product or a regular purchase.
4. Purchase decision
Now that the consumer has evaluated the different solutions and products available for respond to his
need, he will be able to choose the product or brand that seems most appropriate to his needs. Then
proceed to the actual purchase itself.
His decision will depend on the information and the selection made in the previous step based on the
perceived value, product’s features and capabilities that are important to him.
But his Consumer Buying Decision Process and his decision process may also depend or be affected by
such things as the quality of his shopping experience or of the store (or online shopping website), the
availability of a promotion, a return policy or good terms and conditions for the sale.
For example, a consumer committed to the idea of buying a stereo of a well-known brand could change
his decision if he has an unpleasant experience with sellers in the store. While a promotion in a
supermarket for a yogurt brand could tip the scale for this brand in the consumer’s mind who was
hesitating between three brands of his “evoked set”.
5. Post-purchase behavior
Once the product is purchased and used, the consumer will evaluate the adequacy with his original needs
(those who caused the buying behavior). And whether he has made the right choice in buying this product
or not. He will feel either a sense of satisfaction for the product (and the choice). Or, on the contrary, a
disappointment if the product has fallen far short of expectations.
An opinion that will influence his future decisions and buying behavior. If the product has brought
satisfaction to the consumer, he will then minimize stages of information search and alternative
evaluation for his next purchases in order to buy the same brand. Which will produce customer loyalty.
On the other hand, if the experience with the product was average or disappointing, the consumer is going
to repeat the 5 stages of the Consumer Buying Decision Process during his next purchase but by
excluding the brand from his “evoked set”.
The post-purchase evaluation may have important consequences for a brand. A satisfied customer is very
likely to become a loyal and regular customer. Especially for everyday purchases with low level of
involvement – such as Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG). A
loyalty which is a major source of revenue for the brand when you combine all purchases made by
customer throughout his entire life (called “lifetime customer value”).
Positive or negative, consumers will also be able to share their opinion on the brand. Whether in their
family or by word-of-mouth. Or on a much broader scale now with social networks or on consumer
product review websites. A tendency not to be overlooked because now with the Internet, an unhappy
customer can have a strong power to harm for a brand.
That’s why that’s important for companies to have awareness of that matter. In addition to optimizing the
customer experience, a guarantee (for example, for a washing machine), an efficient customer service and
a specific call center are some of the assets that can be developed to improve post-purchase behavior if
there is any trouble with the product.
An example of Consumer Buying Decision Process

Stage 1 – Need recognition: It’s Sunday night. You’re hungry (internal physiological stimuli) and there
is nothing in the fridge. You will order food (statement of need).
Stage 2 – Information search: You already have ordered to the Indian restaurant in your street last
month (internal information). A friend recommended a pizzeria in your neighborhood (external
information from environment). And this morning you’ve found a flyer for a Chinese restaurant in your
mailbox (external information from advertising).
Stage 3 – Alternative evaluation: You have a bad opinion of the Indian restaurant since you’ve been
sick the last time (inept set). The pizzeria is both recommended by your friend and also happens to be a
well-known brand (positive perception – evoked set). As for the Chinese restaurant, it got good reviews
on Trip advisor (positive perception – evoked set).
Stage 4 – Purchase decision: After evaluating the possibilities, you’ve decided to choose the well-known
pizza delivery chain. In addition, a new episode of your favorite TV show is broadcasted tonight on TV.
Stage 5 – Post-purchase behavior: The pizza was good (positive review). But you know there was too
many calories and you regret a little bit (mixed feelings about yourself). The next time you will choose the
Chinese restaurant. There is less fat in Chinese than pizza (next purchase behavior)!
________________________________________________________________________________
1.7 SUMMARY
Consumers display differently into the purchase of different products based on product’s characteristics.
Consumers knowingly or unknowingly follow a pattern called purchase process into purchase of
products. Marketers apply various tools and techniques to understand consumers behavior.
1.6 KEY WORD

Consumer Involvement: Consumer involvement is defined as a state of mind that motivates
consumers to identify with product/service offerings, their consumption
patterns and consumption behavior.
__________________________________________________________________________________
____________________________________________________________________________________
1. Differentiate between high involvement and low involvement.
2. Explain consumer decision making process in detail.

____________________________________________________________________________________
______________________________________________________________________________
1.10 REFERENCES
______________________________________________________________________________
 Philip Kotler and Gary Armstrong (1996) “Principles of Marketing” seventhedition, prentice Hall
of India Pvt. Ltd., New Delhi.
 http://www.businessdictionary.com/definition/decision-making.html
BOOKS
New Delhi.
• Rajan Nair, N. Sanjith R. Nair (1999) Marketing Sultan Chand & Sons.
UNIT 3: CONSUMER NEED IDENTIFICATION
Structure
3.1 Introduction
Objectives
3.2 Need activation and problem recognition
3.3 Factors affecting problem recognition
3.4 Influence of situation on problem recognition
3.5 Summary
3.6 Key words
3.10 References
3.1 INTRODUCTION
Marketing is about making sure that a business is providing the goods and services that customers want. It
involves identifying and anticipating what consumers want today and will want in the future. The
marketing department then plays an important role in taking these goods and services to market through
all the channels the business sells through.
Objectives:

 Appreciate the importance of consumer needs.
 Basic understanding about how to need can be activated.
 Understand influence of situation on problem recognition.
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3.2 NEED ACTIVATION AND PROBLEM RECOGNITION
_____________________________________________________________________________
The first stage in the consumer decision-making process is need recognition, which occurs when the
consumer perceives a need and becomes motivated to enter a decision-making process to resolve the felt
need. Need recognition occurs when a consumer identifies a need and thinks of a product that might meet
this need.
Need or problem recognition is oftentimes recognized as the first and most crucial step in
the process because if a consumer does not perceive a problem or need, he generally will not move
forward with considering a product purchase.
A need can be triggered by internal or external stimuli. Internal stimuli refer to a

personal perception experienced by the consumer, such as hunger or thirst. For example, an elderly, single
woman may feel lonely so she decides that she wants to purchase a cat. External stimuli include outside
influences such as advertising or word-of-mouth.
Marketers are required to know the specific needs consumers are attempting to satisfy and how they
translate into purchase criteria. This information allows markets to accurately portray
the need in promotional messages or place messages in an appropriate location. Need recognition is
caused by a difference between the consumer’s ideal state and actual state. A discrepancy exists between
what the consumer wants the situation to be like and what the situation is really like.
A goal exists for the consumer, and this goal may be the attainment of a more positive situation from a
neutral state. Or, the goal could be a shift from a negative situation, and the consumer wishes to be at a
neutral state. The causes of need recognition may be very simple or very complex and may result from
changes in the consumer’s current and/or desired state. These causes may be influenced by both internal
and external factors.
Out of Stock Need recognition occurs when consumers use their existing supply of a product and must
replenish their stock. The purchase decision is usually simple and routine and is often resolved by
choosing a familiar brand or one to which the consumer feels loyal. These are probably the most frequent
reasons for consumers recognizing problems.
In the first situation, the consumer uses up the assortment of goods she has and must repurchase in order
to re-supply her needs. As long as there still is a basic need for the item, problem recognition should
result from its consumption. The most obvious purchasing situations which result from this are caused by
consumers running out of groceries gasoline, health and grooming aids, and other similar convenience
goods.
Sometimes the consumer’s stock of goods is inadequate for even her everyday needs and may require a
purchase. For instance, she may want to install a bracket for hanging planter but finds that she doesn’t
have the necessary tools such as a ruler, a drill and screwdriver.
Dissatisfaction Need recognition is created by the consumer’s dissatisfaction with the current state of
affairs and/or the product or service being used. For example, a consumer may think her ski boots are no
longer comfortable or stylish enough. Advertising may be used to help consumers recognize when they
have a need to make a purchase. The Energizer ad makes the users realize that some batteries are superior.
Finally, the consumer may simply search or something new and different, to break out of a rut. Problem
recognition in this case is really founded on variety seeking behavior or the desire to do something novel
for a change one research study on new product adoption has shown. For example, that one third of those
switching to a new brand did so simply because they desired a change, not because they were dissatisfied
with their present brand.
New Needs/Wants Changes in consumers’ lives often result in new needs and wants. For example,
changes in one’s financial situation, employment status, or lifestyle may create new needs. As you will
see, when you graduate from college or university and begin your professional career, your new job may
necessitate a change in your wardrobe. (Good-bye blue jeans, hello business suits.)
Not all product purchases are based on needs. Some products or services sought by consumers are not
essential but are nonetheless desired. A want has been defined as a felt need that is shaped by a person’s
knowledge, culture, and personality. Many products sold to consumers satisfy their wants rather than their
basic needs.
Related Products/Purchases Need recognition can also be stimulated by the purchase of a product. For
example, the purchase of a new camera may lead to the recognition of a need for accessories, such as
additional lenses or a carrying case. The purchase of a personal computer may prompt the need for
software programs or upgrades.
Marketer-Induced Need Recognition Another source of need recognition is marketers’ actions that
encourage consumers not to be content with their current state or situation. Ads for personal hygiene
products such as mouthwash, deodorant, and foot sprays may be designed to create insecurities that
consumers can resolve through the use of these products.
Marketers change fashions and clothing designs and create perceptions among consumers that their
wardrobes are out of style.
Marketers also take advantage of consumers’ tendency toward novelty-seeking behavior, which leads
them to try different brands. Consumers often try new products or brands even when they are basically
satisfied with their regular brand. Marketers encourage brand switching by using advertising and sales
promotion techniques that encourage consumers to reconsider their current consumption habits.
New Products Need recognition can also occur when innovative products are introduced. Marketers’
attempts to create need recognition among consumers are not always successful. Consumers may not see
a need for the product the marketer is selling. A main reason why many consumers were initially reluctant
to purchase a personal computer was that they failed to see how it fulfilled their needs. One way PC
manufacturers successfully activated need recognition was by stressing how a computer helps children
improve their academic skills and do better in school.
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3.3 FACTORS AFFECTING PROBLEM RECOGNITION
______________________________________________________________________________
The aim of marketing is to satisfy their customer needs and wants (Kotler, 2003; 182). The field of
consumer behavior is to identify that how a customer buys, uses any product and services and dispose it.
Schiff man (2002) states that it is never simple to identify and understand consumer needs. However, the
behavior of consumer depends on some factors. There are number of factors in the study of consumer
behavior which plays important role in buying of any new product or services from the selling firm such
as customer income, culture, technology, various types of personal factors.
1. Cultural factors:
In the field of consumer behavior, the cultural affects most to the consumer behavior and within different
types of societies. Managers of any firms must have to consider about psychological and behavioral
effects (Cleveland and change, 2008). However, the subculture, social class are the also important factors
of consumer behavior. The firms can capture the picture of consumers needs and to identify their wants
by indentifying the cultural of their societies. In addition, the cultural is the norms, rituals and traditional
among the society (Solomon, 1999; 16). Rosenthal (1992) who identify that within culturally
heterogeneous societies like the United States, and the countries of Western Europe, the psychological
and behavioral consequences of ethnic group membership are of considerable importance". It is one type
of lens through which people can view product and services.
The consumer choices cannot be identified without taking culture context in which they are made. On the
other side, there are some social activities and cultural activities which are considered to obtain the
consumer behavior (Foxall, 1993). Generally, the culture can be divided into the three parts namely
cultural, sub-cultural and social class. The role of sub-cultural is to identify the nationalities, religions and
geographic regional. In addition, it is quite important to understand about sub-cultural because it helps to
the firms to provide the best services and product in the market size (Schiff man & Kanuk, 2007).In
addition, the all human societies' exhibit social stratification and some time, it takes the form of a caste
system. However the social class not only includes the income of person but it shows the level of
education and occupation (Kotler, 2004; 185).The social class is not same in dressing style or speech
patterns but it is different. So in the current situation, it is important to identify the dimensions of cultural
before they are going to sell product and services (Solomon, 2007).
2. Social factors:
Human beings are social animals and our desire is to fit it and or to identify by individuals or groups
which are the primary motivation for buying product and services in the services industry. After the
cultural factors in the study of consumer behavior, the Social factors also affect the consumer behavior.
From the early year, Peterson (1987) found that socialization which is determined the way of patterns of
behavior or the process by which the person can adopt social roles. Where the family is more powerful
social factors, it affects the consumer behavior rather than social norms. Furthermore, the social factors
include self concept and personality. This social factors is affects by reference groups and family and
social roles and statuses (Kotler, 2003; 184). A reference groups of person which include different types
of groups like friendships groups, work and shopping groups that impact on consumer behavior.
3. Personal Factors:
The consumer behavior also depends on the personal characteristics. The way of the consumer behavior is
determined by buyer's age and stage in the life cycle, personal occupation, economic circumstances and
lifestyle of person and also behavior is affects by personality and self concept (Kotler, 2003). In addition,
in the lifetime, people are not buying the same product and services, their need of product and services are
changed by time to time. For the example, in the early year, the person used pager for the communication
but nowadays, they are different, they prefer to buy mobile for the purpose of communication. Solomon
(1999) argued that in the traditional societies, the lifestyle which is affecting a pattern of selecting product
and services and also reflecting a person choice of how he/she spends time and money. In addition, today
consumer is buying product and services over others because they are connected with other person
lifestyles. However, the research found that the lifestyle of the person is changing by time to time.
Nowadays, advertising is become most affecting factor to the consumer behavior, because advertising is
become essential to get information about new product and it result in better products for the public.
Furthermore, the personality, product quality, self concept and self power, the way of product display
methods are the major factors which impact on consumer behavior in the services industry (Schiff man
and Kanuk, 2007).
4. Psychological factors:
Psychological factors play important role to determine the consumer behavior. These factors are affected
by four major factors like motivation, perception, and learning. This psychological factor decides the
personality and lifestyle. The demonstration influence is also dependent upon psychology of an
individual. Nowadays, learning is the major factors in the study of consumer behavior because when
people act, at that time, they learn something (Kotler, 2003). Furthermore, Learning can change the
consumer behavior from experience. Most of behavior is learning from the current environment.
Personality, lifestyles and attitudes are the major characteristics of consumers which provide
understanding about consumer behavior into the services industry (Schiff man, 2007). Consumers have a
wide range of attitudes towards the product, services, advertisements, and internet and towards retail
store. Whenever, any customers ask him/her self about product and services, at that time, we are being
asked to express our attitudes. If any marketer wants to understand about attitudes of consumer, they need
to understand about consumer beliefs towards product or services brand (Kotler, 2003). These beliefs and
preference is attributing to define consumer's attitudes towards a brand. In the study of consumer
attitudes, the lifestyle is the most important concepts to understanding consumer behavior (Simon, 1999).
Most of researchers agree that there are three components like affect, behavior and cognition. These all
components are connected to each other.
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3.4 INFLUENCE OF SITUATION ON PROBLEM RECOGNITION
Problem recognition can be influenced by a variety of situational, consumer, and marketing factors. These
may operate singly or in combination to trigger problem recognition. These “triggers” are of interest to
marketers of goods and services and are often part of the copy points included in promotional
communications.
1. Situational Influences
Obviously, as products are used, consumers recognize the need to replace those that are broken, lost,
or worn out or those for which the contract has expired. When the gas tank reads almost empty, the driver
stops at the next gas station to fill up. When the computer runs out of paper, it’s time to buy more, or if
the car seems to be in the repair shop more frequently lately, maybe it’s time to replace it. There is also
the issue of style or color “wear out.” Last year’s clothing style may no longer be “in,” so the consumer
considers a dress, shirt, or pair of shoes to be “worn out.” Can you think of other examples that could be
classified as “wear outs”?
Product acquisition also leads consumers to realize new needs, as one purchase leads to another. A
newlywed couple buying a house or renting an apartment quickly realizes the need to buy furniture,
decorate, and stock up on household supplies before moving in. The owner of a new Blu-ray player finds
this is just the beginning of a continued investment in buying Blu-ray disks.
Consumers may recognize the need for new goods and services as a result of changed
circumstances. Changes of lifestyle or environment—such as a move away from home to college, a new
job, getting married, or a period of convalescence after an accident—all lead us to perceive new needs,
resulting in a variety of purchases, some of which may be major.
2. Consumer Influences
Not all consumers respond to problems the same way. Whereas some look to existing goods and services
to provide the benefits to solve their problems, others think in terms of new products. Those in the first
group are actual state consumers. They shop mostly because they realize that products presently owned
require replacement or replenishment and currently available solutions are the best or acceptable answers.
Those in the second group are desired state consumers. With a tendency to seek and recognize new
product opportunities, they shop not necessarily to replace worn or lost possessions but because they
enjoy the shopping experience. Some people may find the crowds and environment stressful, but others
will embrace it. While shopping, they are exposed to new products, see the benefits they offer, and buy
them.
In general, consumer motives may be grouped into five types:
1. The consumer makes a purchase to optimize satisfaction. We buy what we see as the “best” product
or service within our economic means. This is particularly true for goods and services related to
entertainment and leisure activities. Going out on a date to a fancy restaurant, taking a luxury cruise,
or flying first class all maximize pleasure and are ways to optimize satisfaction.
2. The consumer makes a purchase to prevent possible future problems. We often buy as a means of
minimizing or eliminating negative consequences. Buyers of cars with top reliability ratings from
Consumer Reports, for example, are most likely motivated by a wish to avoid breakdowns and costly
repairs. Pre-need purchases, such as renter’s, personal liability, or life insurance, also fall into this
category.
3. The consumer makes a purchase to escape from a problem. Here, the motive is to avoid an existing
negative situation. Obvious examples are appeals such as a getaway island vacation or a golf outing
to escape from work or school pressures. Moving from one apartment to another because of
continuing problems with the heating or air conditioning also is such an escape solution.
4. The consumer makes a purchase to resolve conflict. Particularly when we wish to satisfy two or more
motives of different people through a single purchase, the choice is often one that resolves conflict. A
woman is looking for a sporty, stylish car, while her husband thinks a car with room for the whole
family would be a better purchase. Both want to please the other, so they settle for something in
between the two extremes.
5. The consumer makes a purchase to maintain satisfaction. Many purchases are made simply to
maintain the status quo. Imagine, for example, that a nanny who takes care of the children for a dual-
career couple resigns after several years of loyal service. The couple immediately hires another nanny
to continue the same level of child care and the same lifestyle. Another example would be the action
of a person who has been very pleased with the same automobile brand over the past two purchases.
When it’s time to replace the current car, a later model of the same brand is purchased.
3. Marketing Influences
Information provided by marketers may trigger problem recognition, leading the consumer to reevaluate
his or her actual and desired states. Price information, for example, can be extremely influential. A
consumer who has decided Rs 500 is out of her price range for a magazine subscription may decide that
the magazine is just the thing to help her with a term project when she sees a special offer at Rs.250.
The consumer recognizes need and moves toward the desired state. Promotional activities such as
advertising, coupons, free offers, sweepstakes, product demonstrations, and rebates are ways in which
marketers seek to influence problem recognition. Product developments, like the announcement of a
breakthrough in technology or ease of use or greater product capacity and such, can trigger a consumer’s
reassessment of his or her actual state and desired state with respect to the product or service. The result
could be that a problem is now recognized.
________________________________________________________________________________
3.5 SUMMARY
Consumer needs are highly varying in nature. Problem/Need recognition is the first stage in the consumer
decision making process. Marketers apply various tools and techniques to identify and create needs. There
are various factors in the environment which affect problems/needs.
3.6 KEY WORD
Need: Require (something) because it is essential or very important rather than just desirable.
Want: Have a desire to possess or do (something); wish for.
Situation: A set of circumstances in which one finds oneself
__________________________________________________________________________________
____________________________________________________________________________________
1. What is the process of need activation?
2. Define various factors which affect problem recognition?
3. Explain situational influence and its impact on buying behavior.

____________________________________________________________________________________
1. Matin Khan, “Consumer Behaviour”: 2nd ed. New Age International Publishers 2004.
2. Blackwell, Miniard and Engel (2006). Consumer Behaviour (10th Ed.). Thomson Learning.
3. Loudon, D.L. (1988), Consumer Behavior: Concepts and Applications, McGraw Hill, London.
4. Schiffman, L.G. (1993), Consumer Behavior, Prentice Hall International, London.
_____________________________________________________________________________
3.10 REFERENCES
______________________________________________________________________________
 Philip Kotler and Gary Armstrong (1996) “Principles of Marketing” seventhedition, prentice Hall
of India Pvt. Ltd., New Delhi.
BOOKS
New Delhi.
UNIT 4: ANALYZING AND EVALUATING INFORMATION
Structure
4.1 Introduction
Objectives
4.2 Sources of Information
4.3 Types of Information that consumers seeks
4.4 Marketing strategies related to information search
4.5 Summary
4.6 Key words
4.10 References
_____________________________________________________________________________
4.1 INTRODUCTION
Information Search is the second stage of the buyer decision process. In this stage consumers are driven
(by their drive) to search for more information related to their need. If the drive is strong and a satisfying
product is near at hand, the consumer is likely to buy it then, barely collecting any information, or
skipping this stage altogether. If the drive is not strong, the consumer will usually store their need in
memory and begin an information search. As a consumer does more research they will inevitably become
aware of competing brands and products that are available for purchase.
Objectives:
 Different sources of information.
 Types of information which consumers require during purchase process.
 Various types of strategies which marketers apply to understand consumers during information search
stage.
_____________________________________________________________________________________
4.2 SOURCES OF INFORMATION
_____________________________________________________________________________
In order to satisfy the recognized needs, a consumer resorts to both external and internal search. Internal
search for information will be sufficient in case of loyalty decisions - where the consumer has a strong
favorable experience and brand preferences. It is equally sufficient for impulsive purchases - where such
external stimuli as attractive packaging, unusually low price or vantage display of products stimulate
consumers to recognize the need of the product. The remaining information search is internal and limited
in nature.
Internal search involves the consumer identifying alternatives from his or her memory. For certain low
involvement products, it is very important that marketing programs achieve “top of mind” awareness,
thus, the consumer must be able to retrieve one’s restaurant from memory before it will be considered.
External search, on the other hand, is a mediated, planned, and rational pursuit of information. In high
involvement purchase decisions, external search is inevitable. Before buying a car, for example, the
consumer may ask friends’ opinions, read reviews in consumer reports, consult several web sites, and
visit several dealerships. Thus, firms that make products that are selected predominantly through external
search must invest in having information available to the consumer in need—e.g., through brochures, web
sites, or news coverage.
The amount of effort a consumer puts into searching depends on a number of factors such as
the market (how many competitors are there, and how great are differences between brands expected to
be?), product characteristics (how important is this product? How complex is the product? How obvious
are indications of quality?), consumer characteristics (how interested is a consumer, generally, in
analyzing product characteristics and making the best possible deal?), and situational characteristics.
External sources of information include:

• Personal sources, such as friends, relatives, or co-workers
• Marketer-controlled (commercial) sources, such as information from advertising, salespeople, or
point-of-purchase displays and the Internet.
• Public sources, including articles in magazines or newspapers and reports on TV.
• Personal experience, such as actually handling, examining, or testing the product.
______________________________________________________________________________
4.3 TYPES OF INFORMATION THAT THE CONSUMER SEEKS
______________________________________________________________________________
Determining how much and which sources of external information to use involves several factors,
including the importance of the purchase decision, the effort needed to acquire information, the amount of
past experience relevant ,the degree of perceived risk associated with the purchase, and the time available.
For example, the selection of a movie to see on a Friday night might entail simply talking to a friend or
checking the movie guide in the daily newspaper. A more complex purchase such as a new car might use
a number of information sources—perhaps a review of Road & Track, Motor Trend, or Consumer
Reports; discussion with family members and friends; and test-driving of cars. At this point in the
purchase decision, the information-providing aspects of advertising are extremely important.
The Internet influences consumers’ external search patterns significantly for many products. For the travel
industry, 60 percent indicated in 2006 that the Internet is very or extremely important for making travel
plans, compared to one-third in 2002.The type of information sought involved significant moves from
simple things like researching the weather or the destination to more complex comparisons of travel costs
and accommodations.
________________________________________________________________________________
4.4 MARKETING STRATEGIES RELATED TO INFORMATION SEARCH
(1) Maintenance Strategy (2) Disrupt Strategy (3) Capture Strategy (4) Intercept Strategy (5) Preference
Strategy (6) Acceptance Strategy
1. Maintenance Strategy
Used when in Evoked Set, nominal decision making. If the target market purchases the brand habitually,
the marketer's strategy is to maintain that behavior. This requires consistent attention to product quality,
distribution, and a reinforcement advertising strategy. There is a need for constant product development
and improvements and to counter short-term competitive strategies, such as coupons or discounts.(Coca
Cola)
2. Disrupt Strategy
Not in evoked set, nominal decision making. The first task here is to disrupt the existing decision pattern.
This is a difficult task since the consumer does not seek external information or even consider alternative
brands. In the long run, a major product improvement and attention-attracting advertising could shift the
target market into a more extensive form of decision making. In the short run, attention-attraction
advertising aimed to break the habitual decision could be effective. This is done by handing out free
samples, coupons, rebates, Comparative advertising is also often used here.
3. Capture Strategy
Limited decision making generally involves a few brands that are evaluated on only a few criteria, such as
price and availability. Much of the information search occurs at the point-of-purchase. The marketer's
objective here is to capture as large a share of the purchases as practical. Marketers need to know what
information the consumer is looking for. They will supply information, such as price, through websites,
mobile apps and they will supply the information at point-of-purchase through displays and good shelf
place. (Cereal)
4. Intercept Strategy
Brand not in evoked set, limited decision making. Here, the objective will be to intercept the consumer
during the search for information on the brands in the evoked set or during general search for information.
Marketers will have to focus on attracting consumers' attention, because they will not be seeking
information on their brand. (Washing machine)
5. Preference strategy
Because extended decision making generally involves several brands, many attributes and a number of
information sources, a simple capture strategy won't be enough. First the brand needs to have a strong
position on those attributes important to the target market. Next, information must be provided in all
appropriate sources. In addition it might be good to provide sales personnel with extra motivation to
recommend the product. A well designed website and point-of-purchase displays are essential.
6. Acceptance Strategy
Brand not in evoked set, extended decision making. Similar to preference strategy, but complicated by the
fact that the target market is not seeking information about the brand. Therefore, the marketer must also
try to attract consumers attention or otherwise motivate them to learn about the brand. This can happen by
a good strategy to expose the brand in a search engine or for example, when it's a car company, to pay
consumers to test drive the car. The primary objective is not really to sell the brand, but to move the brand
into the evoked set. (Google ads)
________________________________________________________________________________
4.5 SUMMARY
Information plays vital role into purchase process. This is the stage where customers seek various types of
information to proceed for next level of purchase process. Marketers also apply various marketing
strategies to inform customers. Marketers should make sure that information about their product reach
well in time to attract customers.
4.6 KEY WORD

Information: Facts provided or learned about something.
Situation: A set of circumstances in which one finds oneself.

____________________________________________________________________________________
1. What are the various sources of information?
2. Define various types of information.
3. Explain marketing strategies related to information search.

____________________________________________________________________________________
4.10 REFERENCES
 Philip Kotler and Gary Armstrong (1996) “Principles of Marketing” seventh edition, prentice
Hall of India Pvt. Ltd., New Delhi.
BOOKS
New Delhi.
UNIT 5: BASIS FOR DECISION MAKING
Structure
5.1 Introduction
Objectives
5.2 Alternative evaluation
5.3 Consumer decision making, the various decision rules
5.4 The purchase process
5.5 Summary
5.6 Key words
5.10 References
_____________________________________________________________________________
5.1 INTRODUCTION
Evaluation of alternatives is the third stage in the Consumer Buying Decision process. During this stage,
consumers evaluate their entire product and brand options on a scale of attributes which have the ability
to deliver the benefit that the customer is seeking. The brands and products that consumers compare -
their evoked set - represent the alternatives being considered by consumers during the problem-solving
process.
Objectives:
 Understand about types of alternatives.
 Able to understand consumer decision making rules.
 Understand purchase process.
_____________________________________________________________________________________
5.2 ALTERNATIVE EVALUATION
_____________________________________________________________________________
Evaluation of alternatives is the third stage in the Consumer Buying Decision process. During this stage,
consumers evaluate their entire product and brand options on a scale of attributes which have the ability
to deliver the benefit that the customer is seeking. The brands and products that consumers compare -
their evoked set - represent the alternatives being considered by consumers during the problem-solving
process.
In order for a marketing organization to increase the likelihood that their brand is part of the evoked set
for many consumers, they need to understand what benefits consumers are seeking and specifically,
which attributes will be most influential to their decision-making process. It is important to note that
consumers evaluate alternatives in terms of the functional and psychological benefits that they offer. The
company also needs to check other brands of the customer's consideration set to prepare the right plan for
its own brand.
During this stage, consumers can be significantly influenced by their attitude as well as the degree of
involvement that they may have with the product, brand, or overall category. For example, if the customer
involvement is high, then he or she will evaluate several brands, whereas if it's low, he or she may look at
only one brand. In low involvement buying, the activity is usually frequent, habitual to a certain extent
and there is generally little difference between the brands. No strong attachment exists between the buyer
and the brand. Promotions are simple and repetitive. Conversely, high involvement buying involves
products with many differences. The behavior is more complex and the research is more detail oriented.
Ultimately, consumers must be able to effectively assess the value of all the products or brands in their
evoked set before they can move on to the next step of the decision process.
Evoked set:
In this stage, the consumer compares the various brands he or she has identified as being capable of
solving the consumption problem and satisfying the needs or motives that initiated the decision process.
The brands identified as purchase options to be considered during this stage are referred to as the
consumer’s evoked set.
The evoked set is generally only a subset of all the brands of which the consumer is aware. The consumer
reduces the number of brands to be reviewed during the alternative evaluation stage to a manageable
level. The exact size of the evoked set varies from one consumer to another and depends on such factors
as the importance consumer may pay more attention to a commercial that is heard alone at home than to
one heard in the presence of friends, at work, or anywhere distractions may be present.
If advertisers can isolate a particular time when the listener is likely to be attentive, they will probably
earn his or her undivided attention. Evoked set/Consideration set is the set of alternatives that the
consumer actively considers while making a purchase decision; these exist either in his memory or feature
prominently in the environment. The consumer perceives them to be acceptable.
Inept set: These are those alternatives apart from the evoked set that the consumer excludes from further
consideration, as he perceives them to be inferior and unacceptable.
Inert set: These are those alternatives apart from the evoked set that the consumer excludes from further
consideration, as he is indifferent towards them and perceives them as ones without much advantages or
benefits.
Identification of Evaluative Criteria:
Once consumers have identified an evoked set and have a list of alternatives, they must evaluate the
various brands. This involves comparing the choice alternatives on specific criteria important to the
consumer.
Evaluative criteria are the attributes of a product that are used to compare different alternatives.
Evaluative criteria can be objective or subjective. For example, in buying an automobile, consumers use
objective attributes such as price, warranty, and fuel economy as well as subjective attributes such as
image or styling.
Evaluative criteria are objective and subjective parameters of the brand that the consumer regards as
important, and uses as standards to discriminate among the various alternatives. The consumer evaluates
the different alternatives on one or few or many of these features and then makes a final choice. They are
features that a consumer considers in choosing among alternatives; these could be functional/utilitarian in
nature (benefits, attributes, features),or subjective/emotional/hedonic (emotions, prestige etc.). The major
evaluative criteria are:
 Economic: Price, Value (Product Attributes, Brand image, Evaluation of Quality, Price, &
Features)
 Behavioral: Need/motivation, Personality, self-concept and self-image, Lifestyle etc
 Social influences: Group influences, environmental issues etc
The goal of most advertising and promotional strategies is to increase the likelihood that a brand will be
included in the consumer’s evoked set and consider during alternative evaluation. Marketers use
advertising to create top-of-mind awareness among consumers so that their brands are part of the evoked
set of their target audiences.
Popular brands with large advertising budgets use reminder advertising to maintain high awareness levels
and increase the likelihood they will be considered by consumers in the market for the product. Marketers
of new brands or those with a low market share need to gain awareness among consumers and break into
their evoked sets.
______________________________________________________________________________
5.3 CONSUER DECISION MAKING, THE VARIOUS DECISION RULES
______________________________________________________________________________
The consumer uses certain decision rules. The decision rules help a consumer simplify the decision
process; the various evaluative criteria are structured and integrated so as to simplify the evaluation
process. There can be two kinds of Decision Rules:
 Compensatory rules
 Non-compensatory rules
Compensatory rules:
Under compensatory rules, the various evaluative criteria are listed as attributes. These attributes are
scored and rated for the various alternative brands. A lower rating on an attribute may be offset by a
higher rating on another; i.e. a higher rating on one attribute would compensate for a lower rating on
another. Based on the final scores, the brands are ranked; the one with the highest score, being regarded
as the best. The consumer would then select the brand that scores the highest among the various
alternatives that have been evaluated. Compensatory rules could assume two forms: simple and weighted.
 Simple summated: The attributes are rated for each brand and the scores are totaled.
 Weighted: The attributes are first given weights relatively based on the level of importance;
thereafter, the attributes are rated and finally scored after multiplication with the weights. The
weighted scores are then totaled.
Non-Compensatory rules:
Here, a negative evaluation of any one attribute eliminates the brand from consideration. A lower rating
on an attribute cannot be offset by a higher rating on another; i.e. a higher rating on one attribute would
not compensate for a lower rating on another. The consumer would then select the brand that scores the
highest among the various alternatives that have been evaluated. Non-compensatory rules could assume
three forms: conjunctive, disjunctive and lexicographic.
 Conjunctive rule: A minimally acceptable cut off point is established for each attribute. The
brands are evaluated, and, the brand that falls below the minimally acceptable limit on any of the
attributes is eliminated/rejected.
 Disjunctive rule: A minimally acceptable cut off point is established for each attribute. The
brands are evaluated, and, the brand that falls above the cutoff point on any of the attributes is
selected.
 Lexicographic rule: The various attributes are ranked in terms of perceive importance. First, the
brands are evaluated on the attribute that is considered the most important. If a brand ranks
considerably high than the others on this attribute, it is selected. In case the scores are
competitive, the process may be repeated with the attribute considered next in importance.
Sometimes the application of one rule may not be enough; And another may also be applied to reach a
final decision.
_______________________________________________________________________________
5.4 THE PURCHASE PROCESS
I. Need recognition / Problem Recognition:

 The need recognition is the first and most important step in the buying process. If there is no
need, there is no purchase. This recognition happens when there is a lag between the consumer’s
actual situation and the ideal and desired one.
 However, not all the needs end up as a buying behavior. It requires that the lag between the two
situations is quite important. But the “way” (product price, ease of acquisition, etc.) to obtain this
ideal situation has to be perceived as “acceptable” by the consumer based on the level of
importance he attributes to the need.
 For example, you have a pool and you would like someone to take care of regularly cleaning it
instead of you (ideal situation) because it annoys you to do it yourself (actual situation). But you
don’t judge the “way” to reach this ideal situation (pay $250 / month for a specialized company)
as “acceptable” because its price to obtain it seems too high. Especially compared to the relatively
low level of importance you attach to it. So you won’t have a purchase behavior in this situation.
 On the other hand, the ability to be able to go to your work by car in 20 minutes every morning
(ideal situation) rather than lose three hours in transit because you do not have a car and you live
in the countryside (actual situation) is something that means a lot to you. So you will have a
buying behavior to purchase a car. Even if the price is important.
In addition to a need resulting from a new element, the gap between the actual situation and the ideal
situation may be due to three cases. The current situation has not changed, but the ideal situation has (a
neighbor told you about the possibility – that you did not know – to clean the pool by a specialized
company). Or, the ideal situation is still the same but it’s the actual situation has changed (you’re tired of
cleaning your pool by yourself). Or finally, the two situations have changed.
The recognition of a need by a consumer can be caused in different ways. Different classifications are
used:
Internal stimuli (physiological need felt by the individual as hunger or thirst) which opposes the external
stimuli such as exposure to an advertisement, the sight of a pretty dress in a shop window or the mouth-
watering smell of a french “pain au chocolat” when passing by a bakery.
Classification by type of needs:
Functional need: the need is related to a feature or specific functions of the product or happens to be the
answer to a functional problem. Like a computer with a more powerful video card to be able to play the
latest video games or a washing machine that responds to the need to have clean clothes while avoiding
having to do it by hand or go to the laundromat.
Social need: the need comes from a desire for integration and belongingness in the social environment or
for social recognition. Like buying a new fashionable bag to look good at school or choose a luxury car to
“show” that you are successful in life.
Need for change: the need has its origin in a desire from the consumer to change. This may result in the
purchase of a new coat or new furniture to change the decoration of your apartment.
The Maslow’s hierarchy of needs: Developed by the eponymous psychologist, this is one the best known
and widely used classifications and representations for hierarchy of needs. It specifies that an individual is
“guided” by certain needs that he wants to achieve before seeking to focus on the following ones:
1. Physiological needs
2. Safety needs
3. Need of love and belonging
4. Need of esteem (for oneself and from the others)
5. Need of self-actualization
II. Information search

Once the need is identified, it’s time for the consumer to seek information about possible solutions to the
problem. He will search more or less information depending on the complexity of the choices to be made
but also his level of involvement. (Buying pasta requires little information and involves fewer consumers
than buying a car.)
Then the consumer will seek to make his opinion to guide his choice and his decision-making process
with:
Internal information: this information is already present in the consumer’s memory. It comes from
previous experiences he had with a product or brand and the opinion he may have of the brand.
Internal information is sufficient for the purchasing of everyday products that the consumer knows –
including Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG). But when it
comes to a major purchase with a level of uncertainty or stronger involvement and the consumer does not
have enough information, he must turns to another source:
External information: This is information on a product or brand received from and obtained by friends or
family, by reviews from other consumers or from the press. Not to mention, of course, official business
sources such as an advertising or a seller’s speech.
During his decision-making process and his Consumer Buying Decision Process, the consumer will pay
more attention to his internal information and the information from friends, family or other consumers. It
will be judged more “objective” than these from an advertising, a seller’s speech or a commercial
brochure of the product.
III. Alternative evaluation
Once the information collected, the consumer will be able to evaluate the different alternatives that offer
to him, evaluate the most suitable to his needs and choose the one he think it’s best for him.
In order to do so, he will evaluate their attributes on two aspects. The objective characteristics (such as the
features and functionality of the product) but also subjective (perception and perceived value of the brand
by the consumer or its reputation).
Each consumer does not attribute the same importance to each attribute for his decision and his Consumer
Buying Decision Process. And it varies from one shopper to another. Mr. Smith may prefer a product for
the reputation of the brand X rather than a little more powerful but less known product. While Mrs.
Johnson has a very bad perception of that same brand.
The consumer will then use the information previously collected and his perception or image of a brand to
establish a set of evaluation criteria, desirable or wanted features, classify the different products available
and evaluate which alternative has the most chance to satisfy him.
The process will then lead to what is called “evoked set”. “The evoked set” (aka “consideration set”) is
the set of brands or products with a probability of being purchased by the consumer (because he has a
good image of it or the information collected is positive).
On the other hand, “inept set” is the set of brands or products that have no chance of being purchased by
the shopper (because he has a negative perception or has had a negative buying experience with the
product in the past). While “inert set” is the set of brands or products for which the consumer has no
specific opinion. The higher the level of involvement of the consumer and the importance of the purchase
are stronger, the higher the number of solutions the consumer will consider will be important. On the
opposite, the number of considered solutions will be much smaller for an everyday product or a regular
purchase.
IV. Purchase decision

Now that the consumer has evaluated the different solutions and products available for respond to his
need, he will be able to choose the product or brand that seems most appropriate to his needs. Then
proceed to the actual purchase itself.
His decision will depend on the information and the selection made in the previous step based on the
perceived value, product’s features and capabilities that are important to him. But his Consumer Buying
Decision Process and his decision process may also depend or be affected by such things as the quality of
his shopping experience or of the store (or online shopping website), the availability of a promotion, a
return policy or good terms and conditions for the sale.
For example, a consumer committed to the idea of buying a stereo of a well-known brand could change
his decision if he has an unpleasant experience with sellers in the store. While a promotion in a
supermarket for a yogurt brand could tip the scale for this brand in the consumer’s mind who was
hesitating between three brands of his “evoked set”.
V. Post-purchase behavior
Once the product is purchased and used, the consumer will evaluate the adequacy with his original needs
(those who caused the buying behavior). And whether he has made the right choice in buying this product
or not. He will feel either a sense of satisfaction for the product (and the choice). Or, on the contrary, a
disappointment if the product has fallen far short of expectations. An opinion that will influence his future
decisions and buying behavior. If the product has brought satisfaction to the consumer, he will then
minimize stages of information search and alternative evaluation for his next purchases in order to buy the
same brand. Which will produce customer loyalty.
On the other hand, if the experience with the product was average or disappointing, the consumer is going
to repeat the 5 stages of the Consumer Buying Decision Process during his next purchase but by
excluding the brand from his “evoked set”.
The post-purchase evaluation may have important consequences for a brand. A satisfied customer is very
likely to become a loyal and regular customer. Especially for everyday purchases with low level of
involvement – such as Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG). A
loyalty which is a major source of revenue for the brand when you combine all purchases made by
customer throughout his entire life (called “lifetime customer value”). The “Holy Grail” that all brands in
the industry are trying to achieve.
Positive or negative, consumers will also be able to share their opinion on the brand. Whether in their
family or by word-of-mouth. Or on a much broader scale now with social networks or on consumer
product review websites. A tendency not to be overlooked because now with the Internet, an unhappy
customer can have a strong power to harm for a brand.
That’s why that’s important for companies to have awareness of that matter. In addition to optimizing the
customer experience, a guarantee (for example, for a washing machine), an efficient customer service and
a specific call center are some of the assets that can be developed to improve post-purchase behavior if
there is any trouble with the product.
_______________________________________________________________________________
5.5 SUMMARY
During this stage, consumers evaluate all of their products or brand options on a scale of attributes which
have the ability to deliver the benefit that they are seeking. In order for a marketing organization to
increase the likelihood that their brand is part of the evoked set for many consumers, they need to
understand what benefits consumers are seeking and specifically, which attributes will be most influential
to their decision-making process. It is important to note that consumers evaluate alternatives in terms of
the functional and psychological benefits that they offer.
During this stage, consumers can be significantly influenced by their attitude as well as the degree of
involvement that they may have with the product, brand, or overall category. Ultimately, consumers must
be able to effectively assess the value of all the products or brands in their evoked set before they can
move on to the next step of the decision process.
5.6 KEY WORD

Alternative: One of a number of possible choices or courses of action.
Evaluation: The making of a judgment about the amount, number, or value of something.
Purchase: Purchasing is the formal process of buying goods and services.
Evoked Set: The number of alternatives that are considered by consumers during the problem-
solving process.

____________________________________________________________________________________
1. Explain the process of alternative evaluation.
2. Define various consumer decision rules in detail.
3. Explain purchase process with suitable examples.

____________________________________________________________________________________
______________________________________________________________________________
5.10 REFERENCES
______________________________________________________________________________
 Philip Kotler and Gary Armstrong (1996) “Principles of Marketing” seventh edition, prentice Hall of India
Pvt. Ltd., New Delhi.
 http://theconsumerfactor.com/en/5-stages-consumer-buying-decision-process/
 https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/consumer-marketing-
4/the-consumer-decision-process-40/evaluating-alternatives-202-4503/
BOOKS
New Delhi.
UNIT 6: POST PURCHASE PROCESS
Structure
6.1 Introduction
Objectives
6.2 Post purchase process
6.3 Marketers and consumer’s endeavors to reduce post purchase dissonance.
6.4 Disposal, post purchase dissonance, usage, no use
6.5 Summary
6.6 Key words
6.10 References
_____________________________________________________________________________
6.1 INTRODUCTION
Post-purchase behavior is the final stage in the consumer decision process when the customer assesses
whether he is satisfied or dissatisfied with a purchase. How the customer feels about a purchase will
significantly influence whether he will purchase the product again or consider other products within the
brand repertoire. A customer will also be able to influence the purchase decision of others because he will
likely feel compelled to share his feelings about the purchase.
Cognitive dissonance, another form of buyer's remorse, is common at this stage. This is when the
customer may experience feelings of post-purchase psychological tension or anxiety. For example, the
customer might feel compelled to question whether he has made the right decision. They may also be
exposed to advertising for a competitive product or brand which could put into question the product that
they have chosen. A customer may also have a change of heart and decide that he no longer has a need for
this particular product.
Objectives:
 Understand about post purchase process.
 Able to understand post purchase dissonance.
 Marketers strategy to reduce post purchase dissonance.
____________________________________________________________________________________
6.2 POST PURCHASE PROCESS
After consumption, the consumer assesses the level of performance of the product or service. The post
purchase evaluation process is important because the feedback acquired from actual use of a product will
influence the likelihood of future purchases. Positive performance means the brand is retained in the
evoked set and increases the likelihood that it will be purchased again. Unfavorable outcomes may lead
the consumer to form negative attitudes toward the brand, lessening the likelihood it will be purchased
again or even eliminating it from the consumer’s evoked set.
What is Post-Purchase Behavior?
Simply defined, Post-Purchase Behavior is the stage of the Buyer Decision Process when a consumer will
take additional action, based purely on their satisfaction or dissatisfaction. The consumer's level of
satisfaction or dissatisfaction is directly related to the varying relationship between their initial
expectations of the product (pre-purchase), and their perception of the actual performance of the product
(post-purchase) in their hands.
If after the purchase the consumer perceives the product's performance as matching their expectations, or
even exceeding them, they will be "satisfied". If their perception of the product's performance is less than
their expectations, then the consumer will feel "dissatisfied".
Formation of Satisfaction/Dissatisfaction
Every purchase inevitably results into either satisfaction or dissatisfaction. Satisfaction is the expected
outcome. It signifies "a confirmation that performance of the chosen alternative is consistent with its prior
beliefs and expectations." Dissatisfaction, on the other hand, signifies an absence of such confirmation
with reference to the outcome.
Post-purchase behavior has witnessed, in the recent past substantial research efforts. Some generalizations
out of these researches are as follows:
 There is no all-accepted definition of consumer satisfaction or dissatisfaction.
 In many cases, while presence of a particular factor may cause dissatisfaction, the avoidance of it
may not necessarily lead to satisfaction.
 Satisfaction/Dissatisfaction arises' out of a cumulative effect of many factors. The individual
impact of each is quite difficult to isolate.
 Although consumer dissatisfaction is all pervasive, it is unlikely to result always in complaint
making.
Authors have suggested that complaint behavior is related to such factors as the level of dissatisfaction;
the perceived gain from complaining, the personality of consumer; the general attitude towards
complaining; the convenience in identifying the person to be complained against; the resources available
to the consumer for complaining; and the previous experience with product and complaining clearly,
handling satisfaction/dissatisfaction is a logical process. The larger the gap between their expectations and
the product's performance, the more dissatisfaction.
Cognitive Dissonance
Most of us have experienced a form of this 'second-guessing' feeling when we're out at a restaurant. We
order something thinking it's exactly what we're hungry for, only to look over at our dining companion's
plate when the food arrives and suddenly wish we'd ordered what they're having. This type of feeling is
also known as cognitive dissonance. Cognitive Dissonance is buyer discomfort caused by post-purchase
conflict resulting from dissatisfaction. The reality is that all purchases, big and small, will result in some
degree of Cognitive Dissonance.
This is always the case, because every purchase a consumer makes involves some sort of compromise,
however small or minute. Since consumers form beliefs and attitudes early in the Buyer Decision
Process, at some point they will be concerned about having a negative experience with the product they
may chose, or potentially missing the perceived benefits of other competing brands.
Cognitive dissonance occurrence is a result of a discrepancy between a consumer’s decision and the
consumer’s prior evaluation. Dissonance theory was derived from two basic principles-
1 Dissonance is uncomfortable and will motivate the person to reduce it

2 Individuals experiencing dissonance will avoid situations that produce more dissonance
Cognitive dissonance can be defined as the uncomfortable tension or feelings that occur when we hold
conflicting thoughts, attitudes or beliefs. So, in our restaurant example, our belief that we made the best
choice conflicts with the realization that there may have been a tastier dish we would have liked more.
High-Involvement Purchases
You might remember that with the many different types of consumer purchases, there are different
levels of involvement, or how much time we spend considering alternatives before making a purchase.
The level of involvement used to make a decision can be thought of like a continuum, ranging from
virtually no thought to very high involvement, with points all along the line. The cognitive dissonance
that occurs after high-involvement decision-making can also be called post-purchase dissonance.
______________________________________________________________________________
6.3 MARKETERS AND CONSUMERS ENDEAVOUR TO REDUCE POST PURCHASE
DISSONANCE
______________________________________________________________________________
MARKETERS' RESPONSE STRATEGIES:
It may be noted here that although post-purchase evaluation is strictly concerning the buyer and seller,
several other parties to get involved in case the consumer decides to approach the outside intervention
mechanism against product failure or dissatisfaction. The intervention by the government and consumer
protection organization is a case in point. Thus, a marketer has to design appropriate responses to post-
purchase activities that will not only keep the consumer satisfied but also avoid the intervention of other
parties in the matter. Following are the prominent responses that a marketer should consider in order to:
1. Build consumer satisfaction
2. Maintain consumer satisfaction
3. Avoid consumer dissatisfaction
1. Monitor Regularly the Consumer Reactions
A marketer should initiate and encourage a regular monitoring of consumer reactions towards itself, its
product range and a particular brand. A continuous inflow of such monitoring data will develop into an
information system and serve as early warning signals. Such monitoring is of particular significance
where products are sold through non-store purchasing route.
2. Bring product Quality under Marketing Responsibility
Though we hear a lot these days about improving product quality, nothing can substantially change until
maintenance of product quality is brought under marketing responsibilities. Thus, quality control will
upgrade itself from being an isolated function of production department to a joint mission of marketing
and manufacturing departments.
3. Handle Complaints Quickly and Responsibly
Marketers must go beyond the usual lip-service to handling of customer complaints. They should be taken
up at the earliest opportunity and action notified to the complaint without delay. Even acknowledgement
of the receipt of complaint contributes to reducing dissatisfaction.
4. Be a Courteous and Helpful Host
Most of consumer dissatisfaction is attributable to poor service at the point of purchase. It may arise out
of unhelpful or discourteous sales personnel, poor availability of product and inadequate service to
customers. Marketers may note that even in standard products, considerable differentiation and
competitive edge can be generated by being a courteous and 'helpful host to visiting customers.
5. State only Realistic Product Claims
The previous explanations between product performance and expectation require a marketer to state only
realistic product claims. Factual promotion-executed with creativity, brings about lasting customer loyalty
and goodwill.
6. Help Consumer on Product Use
The manner in which the product is used can be crucial to customer satisfaction/ dissatisfaction. It is in
the interest of marketers themselves to help consumer in proper use of the product - especially those
which may fail if wrongly opened or used blindly. Adequate instructions or information could be given to
reduce potential consumer dissatisfaction.
7. Sell `Solution' instead of Product

Nobody buys a product what consumer buy is `solution' through products. Thus, promotional attempts
should focus on the solution or performance of product rather than the product. This will signify the
desire of marketers to provide satisfaction to customers.
8. Assure Even after the Purchase is Over
Marketers must assure the buyers, even after the purchase is concluded of their commitment to customers'
satisfaction. A thank-you letter or a visit to customers enquiring about their post-purchase feelings can go
a long way in building a healthy and satisfying relationship for both customers and marketers.
_______________________________________________________________________________
6.4 DISPOSAL, POST PURCHASE DISSONANCE, USAGE, NO USE
Post-Purchase Dissonance
By definition, post-purchase dissonance is the uncomfortable feeling we just described when it occurs
following a high-involvement decision. This dissonance occurs because choosing one alternative requires
you to commit to its features and benefits, requiring you to give up the attractive features of other possible
choices. Because post-purchase dissonance is most often associated with high-involvement purchases,
you can think of purchase dissonance almost like a scale - the likelihood you'll experience those feelings
and the stronger they'll be are based on:
1. The decision's performance

2. The cost of the decision
3. The importance of the decision in your life
4. The difficulty of choosing between options
Avoiding Post-Purchase Dissonance
Because post-purchase dissonance is an uncomfortable feeling, most consumers take measures during
the purchase decision-making process to try and avoid it. In fact, rather than face the decision head-on,
some consumers will simply postpone the decision.
Another thing consumers do to minimize post-purchase dissonance during the decision-making process
is to create a decision rule that focuses solely on minimizing their likelihood to second-guess their
choice rather than trying to maximize their value. In other words, when you're trying to decide between
two microwaves that seem equal on all other parameters, you'll go with the more expensive one simply
because you have a sneaking suspicion that the cheaper one will probably need replacing first.
_______________________________________________________________________________
6.5 SUMMARY
How the customer feels about a purchase will significantly influence whether he will purchase
the product again or consider other products within the brand repertoire. Cognitive dissonance is when
the customer experiences feelings of post-purchase psychological tension or anxiety. Some companies
like to engage their consumers with post-purchase communications in an effort to influence their
feelings about their purchase and future purchases.
6.6 KEY WORD
Cognitive dissonance: This term is used in modern psychology to describe the state of simultaneously
holding two or more conflicting ideas, beliefs, values, or emotional reactions.
Evaluation: The making of a judgment about the amount, number, or value of
something.

____________________________________________________________________________________
1. Explain post purchase process.
2. Explain marketer’s strategies to reduce post purchase dissonance.
3. Define cognitive dissonance with suitable example.

____________________________________________________________________________________
_____________________________________________________________________________
6.10 REFERENCES
______________________________________________________________________________
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CONSUMER BEHAVIOUR

ESSENTIALS OF CONSUMER BEHAVIOR

CONSUMER NEED IDENTIFICATION

ANALYZING AND EVALUATING INFORMATION

BASIS FOR DECISION MAKING

POST PURCHASE PROCESSES

Customer is profit, all else is overload....

After reading this unit, the student would be able to:

From the customers' point of view

From the marketers' point of view

What do I mean by Consumer Behavior?

A marketer must know the answers of the following questions.

a) What all they buy?

Consumer Behavior Defined:

According to James F. Engel, Roger D. Blackwell and Paul W. Miniard, (1990)

The above definition can be analyzed in following way:

 Consumer behavior is a decision process adopted by the consumer.

Models of Consumer Decision Making:

Consumer Behavior Theory: Approaches and Models

Theoretical approaches to the study of consumer behavior

The Black Box model:

Buyers Black Box

Howard Sheath Model/ Theory of Buyer Behavior:

Input Information Decision Process Variables Influencing

Source: Engel , Blackwell, and Miniard,(1995) page No 95

Second stage: Information input

Third stage: information processing

Fourth stage: variables influencing the decision process

1.6 KEY WORDS

Consumer Behavior: Consumer behavior is the study of individuals, groups, or organizations

1.8 ANSWERS TO SAQ’S

Refer the relevant text in this unit for answer to SAQ’s.

1.9 FURTHER READING:

The level of involvement

Nature of Consumer Involvement:

2. Involvement possesses certain properties:

Types of Consumer buying decisions

Types of Buying Behaviors:

Consumer Decision Making Process:

2. Search and Evaluating:

An example of Consumer Buying Decision Process

1.6 KEY WORD

1.8 ANSWERS TO SAQ’S

Refer the relevant text in this unit for answer to SAQ’s.

1.9 FURTHER READING:

After reading this unit, the student would be able to:

A need can be triggered by internal or external stimuli. Internal stimuli refer to a

In general, consumer motives may be grouped into five types:

3.6 KEY WORD

3.8 ANSWERS TO SAQ’S

Refer the relevant text in this unit for answer to SAQ’s.

3.9 FURTHER READING:

External sources of information include:

4.6 KEY WORD

4.7 SELF ASSESSMENT QUESTIONS

4.8 ANSWERS TO SAQ’S

Refer the relevant text in this unit for answer to SAQ’s.

4.9 FURTHER READING:

Identification of Evaluative Criteria:

I. Need recognition / Problem Recognition:

Classification by type of needs:

II. Information search

IV. Purchase decision

5.6 KEY WORD