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Consumer behaviour

Prepared By, Sagar Gadekar

Introduction to consumer behaviour

The main object of buyers behaviour studies to understand the buyer, and create a customer through this understanding. Every buyers study has unfolded some new dimension of discipline. The buyers behavior has been approached and analyzed from different angels and under different premises. Different inferences have been drawn. But the subject, too complex to beat, still remains a theorem without an evidence.

Consumer behaviour is the study of when, why, how, and where people do or do not buy a product. It blends elements from psychology, sociology, social anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general.

Definition consumer behaviour

Buyer’s behaviuor is defined as “all psychological, social and physical behaviour of potential customer as they become aware of purchase, consumes, and tell others about products and services. ”
Buyers behaviour involves both individual (psychological) processes and group (social) processes. Buyers behaviour is reflected from awareness right through post purchase evaluation indicating satisfaction or non satisfaction from purchases. Buyers behaviour includes communication, consumption and purchasing behaviour. Buyers behaviour is basically social in nature. Hence, environment plays an important role in shaping the buyers behaviour. Buyers behaviour includes both consumer and business buyers behaviour.

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The price such thing can easily be raised or fixed higher. On the other hand some other products are purchase because. o o Price polices: The buyers behaviors is equally important in framing price policy. Garment are purchased who think themselves and the followers of Gandhi price of product purchase under emotional motives can also be raised.Need for study of Consumer (Buyer ) Behavior o The need of study of (consumer ) buyer’s can be explained with the help of following point: o o Production Policies: The Buyer’s behavior give an inside into the various factor which promote him to purchase. it enhances the prestige and social status of person. The buyer of some product purchase only because particular product are cheaper then the competitive product can not be raised. If it is know that it is packing or habit or fashion which attract the buyer then the producer will pay social attention to these attribute in this produce and thus consumer behavior deal in formulating production policies. o .

refrigerator etc. packaging. . In the case of those product which require after sale services such as T. discount.V sets . The marketers take decision regarding brand. Media to awaken the desire of society to purchase. It enables the producer to know what motive promote the buyer to make purchase and the same are utilized in advertising. gifts. Thus decision of channel of distribution are taken on the basis of consumer behaviour. Decision Regarding Sale and Promotion: A study of buyers behavior are also vital in making decision regarding sales promotion.    Decision regarding Channels of Distribution: The product which are purchased and sold on the basis of low price must have cheap and economic distribution channels. etc. on the basis of buyers behavior for promoting sales of the product. must have different channel of distribution.

generally. electronic equipments. etc. color TV. for costly and durable consumer products whereas in Western countries all family members are rarely consulted. scooters. whereas men are normally involved to make decisions to purchase utility items and costly goods. This situation is somewhat better in middle class or upper class in India’s urban society. family members use their knowledge and experience to decide to buy a particular brand or type depending upon quality and price. for ordinary household products. cars. There are certain products like music system. camera.PARTICIPANTS IN CONSUMER BUYING DECISION   It is important for any marketing man. .. video. Men take decision in 2/3rd cases. which are decided to purchase not by a single member of the family but by all members of the family. washing machines. to know who makes the decisions to purchase consumer durables or a nondurable product.

everyone is consulted before taking decision. (2) family where husband takes decision or he dictates the decision (3) wife dominated family where wife takes major decision.Herbst in his work. has observed four types of families such as: (1) Automatic where the equal number of separate decisions are made by each parameter. P.     Hence. Conceptually Framework for Studying the Family in Early 50s. i.e. and (4) Syncratic where most decisions are joined taken. ..G. it is necessary to know the characteristics of a family which will be helpful in locating who makes the purchase decision.

Decider : A decider is the person who ultimately decides to buy a particular product depending upon the situation. Decider is generally the dominating member of the family or head of the family who carries out of the role.       There are five different participants in any consumer buying decisions: Initiator: Initiator is the person who first suggests the needs of the idea or the need for a particular product which should be brought for satisfying certain requirements. . the Influencer is the person who gives more information or gathers more information which will influence the decision of the purchase. Influences: After the initiator has suggested the idea for a particular product.

User: The user is generally one who actually consumes or uses the product or services so that it is believed to satisfy variety of needs like physiological. Marketers try to provide maximum ‘consumer satisfaction’ in terms of satisfaction of needs or requirements for the product or service when the consumers buy the goods . the actual purchase made by the buyer will depend on the convenience of the family members or of the group and it may depend on the earning members of the family or it may depend upon the dominating person in the group of family. psychological or spiritual.    Buyer: The decision has been made for certain goods which buyer goes to purchase from the shop. social. Any product or services offered by seller should give maximum utility value to the consumer for which they have paid.

   . Advertising buyers.  Best Deal buyers who concentrate on best deal available at the time. Creative Buyers who tell the sellers precisely what they want in terms of product. services and price.Types of Buyers  Loyal buyers who remain loyal to source for considerable periods. who demand advertising support as part of the deal Chisellers who constantly demand extra discount.

Buyer’s Decision Process Problem/Need Recognition  Information Search  Evaluation of Alternatives  Purchase Decision  Consumption  Post purchase behavior  .

recognize the need to solve the problem. When we find a problem. the consumer buying process begins when the buyer recognizes a problem or need. But how? Problem/Need Recognition . Or. For example. Doug may realize that his best suit doesn’t look contemporary any more. we usually try to solve the problem. We. Kathleen may recognize that her personal computer is not performing as well as she thought it should. in other words. These are the kinds of problem that we as consumers encounter all the time. When we found out a difference between the actual state and a desired state.   In this information processing model. a problem is recognized.

PROBLEM/NEED RECOGNITION     From Internal Stimuli: Hunger Thirst Fear From External Stimuli: Neighbor’s Purchases Advertisements Newspapers & Magazines 14     .

selects. Perception is defined as "the process by which an individual receives. Sources of information include:     Personal sources Commercial sources Public sources Personal experience  The relevant internal psychological process that is associated with information search is perception. and interprets information to create a meaningful picture of the world". they search for information on products and services that can solve that problem. . Belch and Belch (2007) explain that consumers undertake both an internal (memory) and an external search. organizes.Information search    Once the consumer has recognized a problem.

Philip Kotler 16 .INFORMATION SEARCH      From Personal Sources: Family Friends Neighbors Acquaintances  From Commercial Sources:      Advertisements Dealers Salespersons Packaging Displays Marketing Source : Principle of Marketing.

INFORMATION SEARCH (CONTD)     From Public Sources: Mass Media Chambers of Commerce Consumer Rating Magazines     From Experiential Sources: Handling the Product Examining the Product Using the Product 17 .

The marketing organization needs to understand what benefits consumers are seeking and therefore which attributes are most important in terms of making a decision. It also needs to check other brands of the customer’s consideration set to prepare the right plan for its own brand.Information evaluation   At this time the consumer compares the brands and products that are in their evoked set. . Consumers evaluate alternatives in terms of the functional and psychological benefits that they offer.

The relevant internal psychological process that is associated with purchase decision is integration.Purchase decision   Once the alternatives have been evaluated. The marketing organization must facilitate the consumer to act on their purchase intention. or a sales promotion such as the opportunity to receive a premium or enter a competition may provide an incentive to buy now. The organization can use a variety of techniques to achieve this. the organization can influence the purchase decisions much more easily. the consumer is ready to make a purchase decision. The provision of credit or payment terms may encourage purchase. Once the integration is achieved. . Sometimes purchase intention does not result in an actual purchase.

close friends and acquaintances Unanticipated situational factors: Changes in income. job transfer.g. . sudden payment of educational fees etc.PURCHASE DECISION    Interfering Factors: Attitudes of Others: Opposing and intense opinions of family members. change of priority e. loss of employment.

POST PURCHASE BEHAVIOR     Post purchase Satisfaction: Keep the Product Store the Product Convert to a Second Use     Post purchase Dissatisfaction: Try to return the product/take legal recourse Rent it Get rid of it/Throw it 21 .

. by himself . At this dissonance is uncomfortable. He will seek reasoning advertisements of the products or he may deliberately avoid positive stories about the competing brand. He may even feel that the sales man taken him for a ride.Post purchase evaluation   The purchase leads to a specific post purchase behaviour. Usually it creates some restlessness in the mind of individual. He is not sure about the product. will all seek all means to recover his conviction and poise. He may feel that the other brand would have better. the individual.

Lastly. there are various other factors influencing the purchases of consumer such as social. The explanation of these factors is given below.Factors Affecting Consumer Behavior    Consumer behavior refers to the selection. the consumer analyzes the prevailing prices of commodities and takes the decision about the commodities he should consume. . then he selects only those commodities that promise greater utility. purchase and consumption of goods and services for the satisfaction of their wants. cultural. the consumer makes an estimate of the available money which he can spend. After selecting the commodities. Meanwhile. There are different processes involved in the consumer behavior. personal and psychological. Initially the consumer tries to find what commodities he would like to consume.

subculture. Culture Basically. Subculture Each culture contains different subcultures such as religions. For example marketers can design products according to the needs of a particular geographic group. Marketers can use these groups by segmenting the market into various small portions. nationalities. and social class. regions or even countries. racial groups etc. geographic regions. Cultural Factors Consumer behavior is deeply influenced by cultural factors such as: buyer culture. culture is the part of every society and is the important cause of person wants and behavior. The influence of culture on buying behavior varies from country to country therefore marketers have to be very careful in analyzing the culture of different groups.       1. .

.   Social Class Every society possesses some form of social class which is important to the marketers because the buying behavior of people in a given social class is similar. education. In this way marketing activities could be tailored according to different social classes. occupation etc. Here we should note that social class is not only determined by income but there are various other factors as well such as: wealth.

Social Factors Social factors also impact the buying behavior of consumers. The important social factors are: reference groups.     2. . For example if the product is visible such as dress. Reference Groups Reference groups have potential in forming a person attitude or behavior. Reference groups also include opinion leader (a person who influences other because of his special skill. knowledge or other characteristics). family. The impact of reference groups varies across products and brands. role and status. car etc then the influence of reference groups will be high. shoes.

Therefore marketers are trying to find the roles and influence of the husband. Family  Buyer behavior is strongly influenced by the member of a family. For example a woman is working in an organization as finance manager. to which he belongs. clubs.    . one of finance manager and other of mother. Therefore her buying decisions will be influenced by her role and status. If the buying decision of a particular product is influenced by wife then the marketers will try to target the women in their advertisement. organization etc. wife and children. family. Now she is playing two roles. Roles and Status Each person possesses different roles and status in the society depending upon the groups.

Family life-cycle consists of different stages such young singles. Some of the important personal factors that influence the buying behavior are: lifestyle. 3. economic situation. personality and self concept. It is obvious that the consumers change the purchase of goods and services with the passage of time. Personal Factors        Personal factors can also affect the consumer behavior. unmarried couples etc which help marketers to develop appropriate products for each stage Occupation The occupation of a person has significant impact on his buying behavior. occupation. . age. whereas a low level worker in the same organization will purchase rugged work clothes. For example a marketing manager of an organization will try to purchase business suits. married couples. Age Age and life-cycle have potential impact on the consumer buying behavior.

On the other hand. opinions. activities etc and shapes his whole pattern of acting and interacting in the world. . Lifestyle Lifestyle of customers is another important factor affecting the consumer buying behavior. Lifestyle refers to the way a person lives in a society and is expressed by the things in his/her surroundings. a person with low income and savings will purchase inexpensive products. It is determined by customer interests. If the income and savings of a customer is high then he will purchase more expensive products.     Economic Situation Consumer economic situation has great influence on his buying behavior.

aggressiveness. Personality is not what one wears. self-confidence etc which can be useful to determine the consumer behavior for particular product or service . rather it is the totality of behavior of a man in different circumstances. Actually. It has different characteristics such as: dominance. time to time and place to place.    Personality Personality changes from person to person. Therefore it can greatly influence the buying behavior of customers.

social needs etc. beliefs and attitudes. Every person has different needs such as physiological needs. motivation. Therefore a need becomes a motive when it is more pressing to direct the person to seek satisfaction. . learning. The nature of the needs is that. Psychological Factors There are four important psychological factors affecting the consumer buying behavior. Motivation The level of motivation also affects the buying behavior of customers.     4. some of them are most pressing while others are least pressing. biological needs. These are: perception.

customers try to interpret the information in a way that will support what the customers already believe. There are three different perceptual processes which are selective attention. Similarly. organizing and interpreting information in a way to produce a meaningful experience of the world is called perception. . Whereas. marketers try to attract the customer attention. in case of selective retention. marketers try to retain information that supports their beliefs. in case of selective distortion. selective distortion and selective retention.     Perception Selecting. In case of selective attention.

   Beliefs and Attitudes Customer possesses specific belief and attitude towards various products. . Since such beliefs and attitudes make up brand image and affect consumer buying behavior therefore marketers are interested in them. Marketers can change the beliefs and attitudes of customers by launching special campaigns in this regard.

. Wholesalers and Retailers). This members of the buying centers. tend to assume certain roles. Many purchase decision in the industrial markets are made by groups. governments (central. like the members of the family.Industrial Market/organizational market   Organizational /Industrial Market consist of business firms (manufacturer. State and Local)and organization (Universities and Hospitals).

often called purchasing agents with the formal responsibility of placing orders. Gate Keepers – organizational members who controls the flow of information into the buying centers. Buyers – Individuals. Influencers – Those who can affect the decision process by assisting in evaluating alternative products.      . Decider – Managers with the authority to make the final choice. There are five different participants in any industrial/organizational buying decisions Users – Those in the organization who works with the product purchased.

Selection of suppliers. 3. 8.Determination of quantity. 5.Order Processing. In organization buying behaviour.Order Placing. The process of organizational buying behaviour is complex.Analyzing quotation. Here.Information feedback etc. 2. 7. . 6. 4.Determination of needs. It is carried out consciously and in a more formalized manner.Quality description.Determination of quality. 9. the formal organization structure influences the buying process. The organizational/industrial buying involves the following steps 1. the personal needs and goals play a secondary role.

 Direct buying (Personal Buying).  Large volume of purchase.  Negotiation Systems.  Smaller number of buyers.  .  Contract Buying by specification.Characteristics of organizational markets Greater sales volume. standardization etc.

In the consumer market. In the consumer market.Characteristics of consumer markets       Every purchase in the consumer market is promoted by a motive or combination of motives. Hence it is very necessary for the salesman to know. The profit margin in the consumer market is low mainly due to high competition exists in the market. There are different type of customers and each and every customers have different needs. environment. education. training and experience. intensity of human being always change. In the consumer market. what motive of purchaser prompt the buyers in the consumer market to buy. all customers are not one and the same. buying motives is not one and the same for all the persons (buyers). the behaviour of every human being is different because difference in heredity. In the consumer market. .

Under a given set of conditions.INFLUENCE OF SOCIAL SCIENCES ON BUYER BEHAVIOR  All major social sciences like economics. It is essential to have an idea of the nature of this influence. psychology. all buyers behave in a similar fashion and every buying decision is a logical process with the ultimate intention of obtaining optimum value for the money spent. Influence of Economics    Economists describe man as a rational buyer and view the market as a collection of homogeneous buyers. sociology and anthropology have influenced buyer behavior studies. .

it certainly cannot answer all the puzzles of buyer behavior. The marketing process is intended to match these heterogeneous segments of demand with heterogeneous segments of supply. The main problem with the concept of economic man is the assumption that buyers are absolutely rational in their purchases and that markets are homogeneous. . differing from each other in several characteristics.  Though the model of economic man may help us understand certain aspects of buyer behavior. Markets are actually a collection of heterogeneous buyers.

For people who are well off. These needs have been categorized in different ways by different psychologists. whereas for the poor. Physiological needs are the basic needs: they include the need to satisfy hunger. a major part of their time is spent in striving to meet these needs. any human activity is directed towards meeting certain needs. thirst. etc. physiological needs are met as a matter of routine. According to psychologists. sleep. Safety needs include needs relating to physical safety and economic and social security. Influence of Psychology   The next major influence on buyer behavior came from psychology. .

group pressure is the motive force behind buying. role-orientation.    Influence of Sociology and Anthropology Sociology and anthropology lent further dimensions to the subject of buyer behavior. opinion leadership. have come to be used for giving causal explanations of buyers behavior. Sociologists and anthropologists have tried to establish a logical connection between buyer behavior and the social environment of the buyer. According to scholars in these fields. reference groups. . several new concepts like social stratification. As a result. etc..

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the need for recognition by society and the need to be held in esteem by others.  Social needs come next and they include the need for love and the need to belong. Esteem needs include the need for self-esteem. The actions of individuals are guided by their need structure and need level. Self-actualization needs include the need for self-development and the need to attain complete fruition of ones capabilities and endowments. .