CONSUMER & INDUSTRIAL

BUYER BEHAVIOUR

DR. SUHAS PAI

CHAPTER NO. CHAPTER NAME PAGE NUMBER

1 Introduction

2 Perception

3 Learning

4 Motivation

5 Personality

6 Attitudes & Persuasive

communications

7 Decision Making

8 Group influences

9 Cultures & Sub-cultures

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CHAPTER 1 - INTRODUCTION

CONSUMER BEHAVIOUR- It is the study of processes involved when individuals

or groups select , purchase, use, or dispose of products, services, ideas, or experiences
to satisfy needs & desires.

RECENT TRENDS IN CONSUMER BEHAVIOUR - They are,

1. Sharing economy
2. Personalization
3. Social shopping
4. Healthy living
5. Experience economy
6. AI ( Artificial Intelligence )
7. Anonymity

1.Sharing economy- In future consumers may not own products like automobiles but
share them with others.e.g.- Uber.

2.Personalization- Customers may prefer to have personalized products rather than

mass- market products.e.g.- In future Uber may suggest us places based on our past
visits.

3.Social shopping- People are comparing prices of offline stores with online prices &
buy whichever is cheaper.

4.Healthy living- There is continued focus on physical fitness, well being &
environmental sustaininbility.e.g.- Frito-Lay came out with Baked Lay’s.

5.Experience economy- There will be more priority on experiences rather than

acquiring things.e.g.- Airbnb provides guided tours , cheese tastings apart from
renting their properties.

6.AI ( Artificial intelligence ) – It describes machines displaying intelligence shown

by humans or animals.e.g.- Self driving cars.

7.Anonymity- Data hacking , cyberbullying will fuel desire for the ‘ right to be
forgotten.’ e.g.- Consumers will flock to platforms like Snapchat that don’t retain
posts.
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CHAPTER 2 – PERCEPTION

PERCEPTION- It is interpretation of information using 5 senses i.e. touch , smell ,

sound, taste & touch.

STAGES OF PERCEPTION- A person goes through following 3 stages to perceive

about a brand.

1. Exposure
2. Attention
3. Interpretation

1.Exposure- It is the first contact of customers with the brand. Companies use sensory
marketing in this.

Sensory Marketing- Creating unique experiense through following 5 senses is called

as Sensory marketing.

a. Sight
b. Smell
c. Sight
d. Taste
e. Touch

Following chart shows the % importance of all senses.

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a. Sight- This is the most important sense of all. 40% of perfume purchase decisions
are based on design of bottle. e.g. 1 million Paco Rabbane perfume bottle looks like
golden brick.

b. Smell – Marketing through smell is called as olfactory marketing.e.g.- Rapid

expansion of candle business is based on creating scented candles.

c. Sound – Use of sound to market products is called as sonic branding.e.g.- Canned

laughter is an integrated part of TV & radio shows.

d. Taste- Taste has become very important part of retail experience.e.g. Ikea is famous
for its swedish meat balls in its restaurant.

e. Touch- Marketing through touch is called as tactile marketing. People want to feel
the product before buying them. e.g.- Apple’s iPods, iPhones convey a sense of ease
& simplicity.

Subliminal advertising- A subliminal message is designed to pass below the normal

limits of perception.

Case- Subliminal Advertising : Mutual Fund Sahi Hai

Mutual Fund Sahi Hai is an initiative by AMFI (Association of Mutual Funds

India). It is a non-profit organization. This is one of the most popular advertising
campaigns that has been running for years now.

The objective of the campaign is not only to educate people to invest in mutual funds
but also subliminally change the perception about mutual funds. The campaign
subliminally communicates mutual funds as an alternative investment option where
risk is minimized if mutual funds stay invested for a longer period of time.
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2. Attention- Attention refers to the extent to which processing activity is devoted to a

particular stimulus.

Case- RATP : Subway & train

RATP is a Paris based state owned public transport operator.The following outdoor
advertisement reminds people of the dangers of multitasking & failing to pay attention
to our surroundings.

3. Interpretation- This refers to the meanings assigned to sensory stimuli. e.g.- FedEx
uses arrow which is embedded in the company’s logo as shown below.
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CHAPTER 3 – LEARNING

LEARNING- Learning is a relatively permamnent change in behaviour caused by

experience. One can learn without trying also. People recognize many brands by their
brand names.

COGNITIVE LEARNING THEORY- A person goes through following 3 stages to

perceive about a brand. It has following steps.
1. Attention
2. Retention
3. Production process
4. Motivation
5. Observational learning

1.Attention- The consumer focuses on model’s behaviour.

2. Retention- The consumer retains this behaviour in the memory.

3. Production process- The consumer has the ability to perform the behaviour.

4. Motivation- A situation arises wherein the behaviour is useful to the consumer.

5. Observational learning- The consumer acquires & performs the behaviour earlier
demonstrated by a model.

Case- CPAA ( Cancer Patient Aid Association ) chanting cigarette lighters

In India when people die ‘ Raam Naam Satya Hai ’ is chanted when a dead body is
carried to the funeral pyre.CPAA fixed death chanting cigarette lighters at various
places. Every time someone tried to light a cigarette chanting lighter played a death
chant.

As a result most smokers were shocked by bluntness of message that they decided not
to light cigarettes there ! Some out of horror threw their cigarettes away.

NOSTALGIC MARKETING- Here companies tyry to revive old memories to

evoke feelings of comfort, security & engagement with the audience.

Case- Paper Boat – A classic case of Nostalgic marketing

Brand name- The name itself reminds people of playing with paper boat in the
childhood.

Flavours- Its typical flavours Jal Jeera, Aam Panna, Kokum, Aamra remind people of
their favorites which are slowly fading away from their memories.

Brand communication- The Paper Boat has used music from R.K. Narayan’s
‘Malgudi Days’ serial in its advertising.
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CHAPTER 4 – MOTIVATION

MOTIVATION- Motivation explains why people initiate, continue or terminate a

certain behaviour.

MASLOW’S HIERARCHY OF NEEDS THEORY- Abraham Maslow developed

this theory to study human motivation. It says that order of needs is fixed.This theory
has following 5 needs.
1. Physiological needs
2. Safety needs
3. Social needs
4. Self esteem needs
5. Self actualization needs

1. Physiological needs- These are needs for survival i.e. food,water & clothes
etc.e.g.- Following print advertisement of Rajdhani restaurant conveys this.
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2. Safety needs – This talks about personal, financial securities etc.e.g.-

Following advertisement of LIC ( Life Insurance Company ) conveys how by
having LIC’s Jeevan Shagun policy family is secured.
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3. Social needs- Social needs convey friendships, love etc.e.g.- Following print
advertisement shows a ‘ Share a Coke ’ depicting friendship.

4. Self esteem needs – It talks about ego , status etc.e.g.- In the following
advertisement a boy is shown looking at Mercedes-Benz car. He is longing to
have it.
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5. Self actualization needs- These needs talk about attaining one’s full potential.
It includes parenting, mentoring etc.e.g.- Following USA Marine
advertisement talks about pushing oneself & others.

MOTIVATIONAL DRIVERS – Following are the factors which drive people.

1. Security
2. Enjoyment
3. Adventure
4. Autonomy
5. Discipline

1. Security- Security conveys care, trust etc.e.g.- In 2013, Volvo V40 PPS (
Pedestrain Protection System ) first with external airbags for pedestrians
protection was introduced by Volvo. The brand got Global NCAP innovation
award.
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2. Enjoyment- Enjoyment talks about pleasure , relaxation etc.e.g. Disney showed

children sleeping after enjoyable trip to Disney World.
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3. Adventure- Adventure means freedom , discovery etc.e.g.- How one can

communicate adventurous personality of the brand ? Jeep showed tribal
hitchhikers with tall , oversized headgears to showcase their detachable roof.

4. Autonomy- Autonomy means success , power etc.e.g.- Rolex says even a

duplicate Rolex gives a feeling of a status to the person wearing it !
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5. Discipline- Discipline conveys precision, logic etc.e.g.- In 2018 , Google

launched Qibla finder app in Egypt which help Muslims to know the Qibla
direction without internet access.
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CHAPTER 5 – PERSONALITY

BRAND PERSONALITY- It is the set of traits people attribute to a product as if it

was a person.Brand messages tailored to the audience’s personality will resonate more
effectively.

MARKE & PEARSON 12 PERSONALITY ARCHETYPES – Marke & Pearson

identified following following 12 brand archetypes.
1. Innocent
2. Explorer
3. Sage
4. Hero
5. Outlaw
6. Magician
7. Everyman
8. Lover
9. Jester
10. Caregiver
11. Ruler
12. Creator

1.Innocent- Traits associated with this are simple, trustworthy etc.e.g.- In Canada ,
Dove of Unilever captured beautifully imperfect sides of photojournalists.

2. Explorer- Explorers are curious & independent. e.g.- Following hoarding of Jeep in
Lonavla demonsrates this.
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3. Sage- They are known as expert scholars & prefer autonomy over belonging.e.g.-
Consultancy Mckinsey falls in this category.
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4. Hero- Hero triumphs against adversity & inspire others.e.g.- Following Nike
advertisement shows hero personality of Nike.

5.Outlaw- Outlaws don’t like rule & they are rebels.e.g.- Following Harley-Davidson
advertisement shows maverick nature of the brand.
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6. Magician- Magicians are full of mystique. They are also secretive.e.g.

Following Disney advertisement exactly depicts mystique nature of Disney.

7. Everyman- Everyman are normal . They don’t crave for attention.e.g. In

Austria Mcdonald’s showed how people anticipated eating its burger during
quarantine.
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8. Lover- Lovers are driven by intimacy. They are romantic. They are afraid of
being lonely.e.g. Cadbury Dairy Milk TV ad in India shows this trait of the
brand.

9. Jester- They are fun loving guys.They are young at heart & remain child
throughout their lives.e.g. Asian Paints always try to portray its humorous
personality.
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10. Caregiver- These brands always want to help others & are moved by
generosity. E.g. Companies like Tata , Wipro are leading firms of India which
are engaged in CSR ( Corporate Social Responsibility ) activities.

11. Ruler- They have strong desire for power & control.e.g. In 2012 , Louis
Vuitton showed one of the greatest boxers Muhammad Ali & his 4 year old
grandson.
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12. Creator- Creators are of the belief that if it can be imagined , it can be created
by sheer efforts. They are highly self critical.e.g. In 2015 advertisement, Apple
shows that how iPhone 6 can be used for beautiful photography.
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CHAPTER 6 – ATTITUDES & PERSUASIVE COMMUNICATIONS

ATTITUDE- Attitude is a general, lasting evaluation of people, objects,

advertisements or issues.

PERSUASIVE COMMUNICATIONS – Brands use following appeals in their

communications to persuade people to buy.
1. Durability
2. Statistics
3. Potential
4. Romance
5. Social
6. Endorsement
7. Status
8. Humour
9. Sex
10. Shock

1.Durability- This appeal talks about its functional benefits.e.g.- Cordura fabric
communicates its functional benefits.

2. Statistics- People remember numbers wasily.e.g.- Popchips communicates that

its chips are far better than fried chips.
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3. Potential- Here brands remind customers about their capabilities & stress that
they can always improve.e.g.- Adidas emhasizes importance of improving
oneself.
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4. Romance- Romance appeal works best when relationships between two people
is shown.e.g. Tiffany diamond ring portrays romance in a couple.

5. Social- Social appeal is good for products & services that have the potential of
making people feel accepted.e.g. American pizza chain Sbarro makes use of
this appeal.
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6. Endorsement- Endorsement appeals work when credible people are used by

brands in their communications.e.g. Snickers have used former Indian captain
M.S. Dhoni for their brand.

7. Status- Here a person feels that his standing in the society enhances by using a
particular brand.e.g. Bvlgari ( LVMH ) jewellery is a brilliant examle of this.
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8. Humour- Use of humour has been used for a long time as apowerful tactic in
persuasion. Humour can backfire if there is controversy.e.g.- Kayaking has
demonstrated that its peanuts are too big even for elephants & the animal can
get chocked by eating them !

9. Sex- Sex also sells.e.g. Unilever targeted males with their deodorant Axe
which shows that if men apply Axe then females are attracted towards them.

10. Shock- Shock advertising is used to startle the audience to bring awareness to a
certain social issue.e.g.In 2010, Bangalore Traffic Police did a outdoor
campaign which showed blood coming out from their cell phones.Tagline was
‘ Don’t talk while he/she drives’.
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CHAPTER 7 – DECISION MAKING

COGNITIVE DECISION MAKING PROCESS- This is the outcome of a series

of stages that results in the selection of one product over other competing options.
Following are the steps cognitive decision making.

1. Problem recognition
2. Information search
3. Evaluation of alternatives
4. Selecting the product
5. Postpurchase evaluation

1.Problem recognition- A person is confused about buying a TV.

2. Information- He searches for information on the internet.

3. Evaluation of alternatives- He goes to the store & compares different brands.

4. Selecting the product- Salesman in the store helps him to select LCD TV.

5.Postpurchase behaviour- After buying LCD TV the store guy may visit you for any
queries.

TOP COGNITIVE BIASES-

1. Cognitive dissonance
2. Primacy effect
3. Recency effect
4. Confirmation bias
5. Herd mentality
6. Social loafing
7. Loss aversion

1.Cognitive dissonance- Here aperson may have 2 contradictory beliefs at the same
time & experiences a stress because of that ! A student may not like to study but he
knows that he has to study to go to higher class.e.g.- Alexa of Amazon sends weekly
emails to its customers keeping them informed about the product’s new skills so that
buyer’s cognitive dissonance is reduced.
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2. Primacy effect- People remember the first thing they saw.e.g.- Coca-Cola was the
first to ener the market & marketed itself that way.
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3. Recency effect- Peole remember the last thing more that the first thing.e.g. A
person may remember the last advertisement more than the first advertisement.

4.Confirmation bias-It is a human tendency to accept that confirms one’s beliefs &
reject contradictory beliefs.e.g. A voter may give vote to a particular political party
which has principles as his beliefs.

5. Herd mentality- If someone sees other behaviour he is influenced by them.e.g.- In

Japan females are die hard fans of Louis Vuitton bags. If one bought the bag others
followed it !

6.Social loafing- This is a phenomenon where a person exerts less effort when he is
part of group than being alone.e.g.Many business schools give more emhasis to GD (
Group Discussions ) than PI ( Personal Interviews).

7. Loss aversion-People prefer avoiding losses as compared to acquiring equivalent

gains.e.g. Many retailers like Flipkart take advantage of this bias.
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CHAPTER 8 – GROUP INFLUENCES

REFERENCE GROUPS- They are the ones who influence customers’ attitudes ,
beliefs & opinions. Reference groups influence what types of products & brands
customers will choose.

TYPES OF REFERENCE GROUPS- 2 types of reference groups are ,

1. Normative refrence group

2. Comparative reference group

1. Normative reference group- These are the people with whom customers interact
directly.e.g. Parents, teachers, peers, friends etc.Different types of Normative
reference groups are,

a) Consumer tribes
b) Brand communities
c) Brand publics

a) Consumer tribes-They don’t have affinity fpr a particular brand but are focussed on
aparticular product category.e.g.FPN ( Fountain Pen Network ) is a online group of
fountain pen collectors.
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b) Brand communities-These are focussed on a particular brand.e.g.- HOG ( Harley

Owners Group ) is a group of customers owning Harley-Davidson bikes.They have
around 10 lakh members.

c) Brand publics- It is aorganized media space kept together by continous practice of

mediation through social media.like Facebook, Instagram, Twitter etc.e.g.Twitter
Hashtags.

2.Comparative reference group- They are the people who inspire customers.e.g.-
celebrities. They are also called as opinion leaders. Following are types of opinion
leaders.

a) Market maven
b) Surrogate consumer
c) Product curators

a) Market maven- He is a person who transmits marketplace information of all

types.He may not be actual consumer of the products but may simply enjoy staying on
top of what is happening in the marketplace.e.g. Oprah Winfrey.
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b) Surrogate consumer-They are marketing intermediaries which we encounter

everyday.e.g. Retailers,interior decorators, admission consultants.

c) Product curators- Marketers keep seeking influencers who help them to identify
what they should offer to customers.e.g.- Lego ties up with lot of outside world who
tell them what to offer to their customers.

BUZZ MARKETING- Creating a positive WOM ( Word Of Mouth ) through a

particular campaign. Following are the faces of buzz.

a) Verbal buzz
b) Visual buzz

a) Verbal buzz-This is through hearing from others.e.g. In USA , actress Demi Moore
overheard local bar staff bragging about energy drink Red Bull when it aws not
available in USA. She made quite an effort to get hold of Red Bull for her.

b) Visual buzz- This is thjrough seeing.e.g. White earphone of iPod was very
prominent because of its white colour.
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CHAPTER 9 – CULTURES & SUB-CULTURES

CULTURE- It is a shared beliefs, religion, rituals , values etc.e.g. Indian culture.

Case – A chess culture in Russia & The Queen’s Gambit

Russia- Russia has become synonymous with chess.Evan Vasilyevich, 1st king of
Russia ( 1547-1584 ) died at the chess board. Over the years, Russia also produced
world champions like Michail Tal , Anatoly Karpov, Garry Kasparov, Vladimir
Kramnik etc. People play chess everywhere.

The Queen’s Gambit- It is a 2020 American TV series based on fictional chess

prodigy Beth Harmon.After four weeks it was Netflix’s top show in 63 countries.By
November 23, 2020 the serial was watched by 6.2 crore households across the
globe.The serial kindled interests of people in playing chess.

SUB-CULTURE-Sub-culture is a group of people within a culture that differentiates

itself from its parent culture often maintaining some of its founding principles.e.g.
Hippies.
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Case – Islamic Marketing

Muslims will be more than one-quarter of the world’s population by 2030.That is a

consumer market to be taken seriously.

1.Colgate-Palmolive claimed to be the first international company to have obtained

halal certification in Malaysia for toothpaste & mouthwash products.

2. Nokia introduced a phone Middle East & North Africa that had alarm for the five
daily prayers & application to send SMS greeting cards for Ramadan.