Chapter 1

Consumer Behaviour
BAMK 2102

Student Name: ___________________________________

Student Id: _____________________________________

 Chapter 1
Introduction
Consumer behaviour refers to the behaviour of consumers with reference to a particular product
or service. Consumer behavior involves the thoughts and feelings people experience and the
actions they perform in consumption processes. It is the mental, emotional and physical activities
engaged in when selecting, purchasing, using and disposing of products and services to satisfy
needs.

Definition of Consumer Behaviour

“Activities people undertake when obtaining, consuming, and disposing of products and
services” (Blackwell, Miniard & Engel)

“The behavior that consumers display in searching for, purchasing, using, evaluating, and
disposing of products and services that they expect will satisfy their needs” (Schiffman and
Kanuk).

“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” (Lars Perner)

“Consumer behavior is the process through which the ultimate buyer makes purchase decisions”
David L. Kurtz.

The American Marketing Association defines consumer behavior as “the dynamic interaction of
affect and cognition, behavior and the environment by which human beings conduct the
exchange aspect of their lives”

(Affect refers to consumer’s feelings about stimulus and event, such as whether they like or
dislike the product)
(Cognition refers to their thinking, such as consumer’s beliefs about a particular product)

“Consumer buyer behavior refers to the buying behavior of final consumers- individuals and
households who buy goods and services for personal consumption”. (Gary Armstrong & Philip
Kotler)

According to Kurt Lewin, consumer behavior (B) is a function (f) of the interaction of personal
influences (P) and pressures exerted by outside environmental forces (E).
B = f (P,E)

1
Characteristics of Consumer Behavior

1. Consumer behaviour is dynamic: It is dynamic because the thinking, feelings and actions of
individual consumers, targeted consumer groups, and society are changing constantly.

2. Consumer behaviour involves interactions: It involves interactions among people’s

thinking feelings and actions, and the environment. Thus marketers need to understand what
products and brands consumers need, what consumers must do to purchase it, and what
influences shopping, purchase and consumptions.

3. Consumer behaviour involves exchanges: It involves exchange between human beings.

People exchange money to obtain goods and services.

Who benefits from Consumer Behaviour?

Consumer behaviour is useful to the marketers, consumers, and government and political
organisations.

a. Marketers
Marketing organizations include not only attempt to sell products but also other organisations
that seek exchanges with consumers. It helps to;
 Understand how consumers take consumption decisions in order to frame suitable
marketing strategies,
 Anticipate the reactions of consumers,
 To get competitive advantage.

b. Consumers
They are interested in consumer behaviour because both consumers and organizations
exchange resources for various goods and services. Their interest is in making exchanges that
help them achieve their goals and in understanding their own behaviour. Thus it gives insights
into our own consumption related decisions, ex. What we buy? Why we buy? How we buy?
How promotional influences persuade us to buy?

c. Government and Political Organizations

They monitor and regulate exchanges between marketing organisations and consumers. This
is accomplished through the development of public policies that affect marketing
organizations and consumers.

2
Importance of studying Consumer Behaviour

1. Helps in formulating right marketing strategy

2. Helps in sales promotion
3. Helps in segmentation of market
4. Helps in development of new products
5. Helps in product orientation
6. Helps in reorientation of packaging
7. Helps consumers to study their behaviour
8. Helps in formulation of advertising policy and strategy
9. Awareness of the market conditions

Factors influencing Consumer Behaviour

The major factors that influence consumer behavior are;
1. Cultural
2. Social
3. Personal
4. Psychological
5. Economic
6. Political
7. Technological
8. Environment factors

1. Cultural factors: Culture is a set of values, perceptions, preferences and behaviours

acquired through family and other institutions. It is the most fundamental determinant of
a person’s wants and behavior.

2. Social factors: A consumer’s behavior is also influenced by social factors as reference

groups, family, social roles and status.

3. Personal: A buyer’s decisions are also influenced by personal characteristics like buyer’s
age and life cycle stage, occupation, economic circumstances, life style, personality and
self concept.

4. Psychological factors: The psychological factors that affect the buying choices are
motivation, perception, learning, and beliefs and attitudes.

5. Economic factors: The economic status of a country and the price and income
distribution of the society influence the consumer behavior.

6. Political factors: The political governance of a country and the legal rules and
regulations affect not only marketers but also the consumer behavior in the society.

3
 7. Technological factors: Due to advanced technology new products are innovated and
introduced into the market to meet the various needs of the customers. Consumers are
attracted towards new products as the old technology gets obsolete along with the
product.

8. Environment factors: Environment factors are natural factors that affect the marketers
and the consumers. Global warming, natural disasters like tsunami effects, earthquakes,
floods, are natural disasters that influence consumer behavior.

Consumer Motivation
Consumer motivation represents the drive to satisfy both physiological and psychological needs
through product purchase and consumption. Motives can be a strong desire and an urge from
within, a drive or emotion which plays a role in consumer’s decision to purchase a product/
service.

Maslow’s Hierarchy of Needs

Abraham Maslow developed a module in which basic needs such as physiological and safety
needs must be satisfied before higher needs such as self actualization are pursued.

1. Physiological Needs
These are needs which required to sustain life, such as food, water, house, clothing etc..

4
 2. Safety Needs
Once physiological needs are met, a person’s attention turns towards safety and security
in order to be free from threat physical and emotional harm. Such needs might be fulfilled
by; living in a safe area, medical insurance, Job security, financial reserves etc.

3. Social Needs
Social needs are those related to interaction with other people and may include
achievement, need for friends, need for belonging, need to give and receive love.

4. Esteem needs
Once a person feels a sense of belonging, the need to feel important arises. Some esteem
needs are achievement, attention, recognition, reputation and self-respect

5. Self Actualization
It is the desire of reaching one’s full potential as a person. Unlike lower level needs, this
need is never fully satisfied. There are always new opportunities to continue to grow.
This is the search for truth, justice and wisdom.

Model of Motivation process

Learning

Goal or
Needs
need
wants, and Tension Drive Behavior
fulfill-
desires
ment

Cognitive
processes

Tension
reduction

5
g
m
D
P
n
p
p
n
d
i
t
a
h
r
u
B
x
o
k
c
a
l
b
s
'
r
e
y
u
Needs, Wants and Desires
A human need is a state of felt deprivation of some basic satisfaction. Some needs are biogenic.
They arise from physiological states of tension such as hunger, thirst, discomfort. Other needs
are psychogenic. They arise from psychological states of tension such as the need for
recognition, esteem, or belonging.
Wants are desires for specific satisfiers of deeper needs. Demands are wants for specific
products that are backed by an ability and willingness to buy them.
A need becomes a motive when it is aroused to a sufficient level of intensity. A motive or a drive
is a need that induces a consumer to act. Satisfying the need reduces the felt tension.
A drive is a strong internal stimulus impelling action. It becomes a motive when it is directed
towards a particular stimuli or product.
Learning describes changes in individual’s behavior arising from experience. Most human
behavior is learned.
Cognitive process is the process of thinking. Cognition is a group of mental processes that
includes attention, memory, producing and understanding language, solving problems, and
making decisions. It helps in processing of information, applying knowledge, and changing
preferences.
Behaviour is the purchase action or the preference to buy a specific brand of a product.
Goal or need fulfillment
The goals consumer wants to achieve can be;
(a) Generic Goals: the general categories of goals that consumers see as a way to fulfill their
needs
(b) Product-Specific Goals: the specifically branded products or services that consumers select as
their goals

Model of Consumer Behaviour

6
Consumer buying motives
What motivates consumers to buy?
1. Desire for gain
2. Fear of loss
3. Security and protection
4. Satisfaction of emotion

There are five major buying motives;

1. Physical
2. Psychological
3. Rational
4. Emotional and
5. Patronage

1. Physical buying motive: Consumers think about the value addition in the product which
they purchase like convenience, appearance, performance, economy, safety and
pleasure/pride and these motives induces buyers to buy a product.

2. Psychological buying motive: Psychological factors include motivation, perception,

learning and beliefs and attitudes.

3. Rational buying motive: This is a motive that appeals to the customer’s reason or logical
judgment. Here the head rules more than the heart. Buying decisions are based on the
review of available information. E.g profit potential, quality of service, availability of
technical assistance etc

4. Emotional buying motive: This is a motive that induces the consumer to buy because of
an appeal to some sentiment or passion. The heart rules more than thehead. The two
emotional motives are fear and gain. E.g. Fear decision to buy an insurance policy, Gain
decision to buy a stock or a bond or diamond or gold ornament. eg. Children are
emotionally attached to buy chocolates.

5. Patronage buying motive: A patronage buying motive induces the consumer to buy
products and services due to loyalty. The customer’s prior experience with the brand or
the product has been beneficial and the customer wishes to repeat the purchase. This may
be due to good service, relationship with the sales people, superior service and variety of
customer choice.

7
References:
Martin Evans, Ahmad Jamal, & Gordon Foxall, Consumer Behaviour, 2006, John Wiley & Sons,
England.

Paul J. Peter and Jerry C Olson, Consumer Behaviour and Marketing Strategy, Eighth edition,
2008, Mc Graw Hill International edition, Singapore

Philip Kotler, Marketing Management, Analysis, Planning, Implementation and Control, Prentice
Hall of India Pvt Ltd.

http://www.scribd.com/doc/25512273/Consumer-Buying-Motives