Introduction to Consumer

Behavior
 Consumer?

• 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.
 Customer vs Consumer
1. The purchaser of goods or services is known as the
Customer. The end user of goods or services is known
as a Consumer.
2. A Customer can be a consumer if he purchases the
product/service and consumes it.
3. A customer is someone who pays for your service or
product. A consumer is someone who uses the service
or product.
Customer vs Consumer
 What is Consumer Behavior?

• Consumer behavior is the study of how individuals, groups and

organization select buy, use and dispose of goods and services, ideas
or experiences to satisfy their needs and wants.
• Consumer behaviour may be defined as the decision process and
physical activity individuals engage in when evaluating, acquiring,
using or disposing of goods and services.
• “The behaviour that consumers display in searching for, purchasing,
using, evaluating and disposing of, if products and services that they
expect will satisfy their needs.” -Leon G Schiffman and Leslie Lazar
Kanuk, ‘Consumer Behaviour’, Prentice-Hall of India, 4th ed. 1991
 Nature of Consumer Behavior
• Systematic process
• Influenced by various factors
• Different for different customers
• Different for different products
• Vary across regions
• Vital for marketers
• Information search
 Need of Consumer Behavior
• To satisfy need of customers
• Helps to understand consumer psychology
-- Consumer psychology is based on his knowledge, attitude, intention and motive.
-- The psychology of customer develops on the basis of knowledge he has. Sales
promotion plays an important role to provide the knowledge of the product to
consumers.
-- Attitude is a state of mind or feeling. Attitude explains behavior. Intention means
a desire to do something.
-- A marketing program is formulated only after understanding the intention of
consumers. Motive is the integral state which directs the behavior of a person.
• Helps to understand consumer motives
-- A motive is an urge for which an individual seeks satisfaction.
• Helps to understand consumer choices
• Helps to understand consumer preferences
 Importance of Consumer Behavior
• Production policies
• Price policies
• Decision regarding channels of distribution
• Decision regarding sales promotion
• Exploiting marketing opportunities
• Consumer do not always act or react predictably
• Highly diversified consumer preferences
• Rapid introduction of new products
• Implementing the "Marketing concept"
 Key Terms
• Personal consumers and organizational consumers
• Buyers and Users
CONSUMER DECISION MAKING PROCESS
 CONSUMER DECISION MAKING PROCESS

1 – Problem Recognition (I need new trainers)

2 – Information search (What trainers are out there?)
3 - Evaluation of Alternatives (Do I need trainers and if so which ones?)
4 – Purchase (Buying the trainers)
5 – Post Purchase satisfaction or dissatisfaction (Were they the right
trainers for us?)
 What is Consumer Research?

• Consumer research is a part of market research in which inclination,

motivation and purchase behavior of the targeted customers are
identified.
• Consumer research helps businesses or organizations understand
customer psychology and create detailed purchasing behavior
profiles.
• An organization that has an in-depth understanding about the
customer decision-making process, is most likely to design a product,
put a certain price tag to it, establish distribution centers and
promote a product based on consumer research insights such that it
produces increased consumer interest and purchases.
Consumer Research Process
 Qualitative Consumer Research
Qualitative research is descriptive in nature, It’s a method that uses open-
ended questions, to gain meaningful insights from respondents and heavily
relies on the following market research methods:
• Focus Groups: Focus groups as the name suggests is a small group of highly
validated subject experts who come together to analyze a product or
service. Focus group comprises of 6-10 respondents. A moderator is
assigned to the focus group, who helps to facilitate discussions among the
members to draw meaningful insights
• One-to-one Interview: This is a more conversational method, where the
researcher asks open-ended questions to collect data from the
respondents. This method heavily depends on the expertise of the
researcher.
• Content/ Text Analysis: Text analysis is a qualitative research
method where researchers analyze social life by decoding words and
images from the documents available. Researchers analyze the context in
which the images are used and draw conclusions from them. Social media
is an example of text analysis. In the last decade or so, inferences are
drawn based on consumer behavior on social media.
 Qualitative Consumer Research
• Depth Interviews: A depth interview is lengthy, unstructured and informal,
and is between a respondent and a trained researcher. It generally lasts
anywhere between 30 minutes to an hour. After establishing the general
subject to be discussed, the researcher keeps her/his own participation to
the minimum possible level. The questions are general and respondents
are encouraged to talk freely about their activities, interests, needs,
desires, motives, emotions and attitudes, in addition to the product or
brand under study.
• Auto-driving: It involves exposing respondents to photographs, videos and
audio-recordings of their own behaviour.
• Projective Techniques: Projective tests require the respondent to decide
what the other person would do in a certain situation. These techniques
explore the underlying motives of individuals who consciously or
unconsciously get involved in rationalisations and concealment because
they may be reluctant to admit certain weaknesses or desires.
 Projective Techniques
• Thematic Apperception Techniques (TAT): Respondents are shown
pictures or cartoons concerning the product or the topic under study
and asked to describe what is happening in the picture.
• Word Association Test: This is a relatively old and simple technique.
Respondents are asked to read a series of words or phrases, one at a
time and asked to answer quickly with the first word that comes into
mind after hearing each one.
• Sentence Completion Test: The interviewer reads the beginning of a
sentence and the respondent is required to finish it. This technique is
believed to be useful in uncovering the images consumers have about
products and stores.
• The Third-Person Technique: The interviewer asks the respondent to
describe a third person. For this, respondents are presented with
some information about the person.
 Quantitative Consumer Research
• Quantitative research is all about numbers and statistics. An evolved
consumer who purchases regularly can vouch for how customer-
centric businesses have become today.
• It’s all about customer satisfaction, to gain loyal customers.
• Online surveys, questionnaires, and polls are the preferred data
collection tools.
• Data that is obtained from consumers is then statistically,
mathematically and numerically evaluated to understand consumer
preference.
 Quantitative Consumer Research
• There are three basic approaches to collect data in quantitative study:
• Observation: One important approach to gain an in-depth
understanding of consumers is to observe their behavior in the
process of buying and using products. By watching consumers,
researchers gain a better understanding of what a product symbolizes
to a consumer because in most cases consumers do not realize that
they are being observed and their behavior remains natural.
• Experimentation: In experimental studies, the researcher can test the
relative sales appeals for package designs, prices, promotional offers
and copy themes etc by designing suitable experiments to identify
cause and effect.
• Survey: In a survey for data collection, consumers are aware of the
fact that they are being studied and participate actively. A survey can
be conducted by personal interview, by mail, or by telephone.