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CONSUMER BEHAVIOUR

Dr. Monika Suri Associate Professor Doon Business School

S. NO.

COURSE

Total Classes (IN HOURS)

Module 1: Introduction to Consumer Behaviour Module 2 : Consumer as an Individual

8 8

3
4
5

Module 3 : Consumer in Social and Cultural Settings Module 4 : Consumer


Decision Process Module 4 : Consumer Satisfaction

8
8
8

MODULE 1 : Introduction to CB Introduction Defining Consumer Behaviour Reasons for Studying Behaviour, Applying Consumer Behaviour Knowledge; Scope of Consumer Behaviour; Market Segmentation; Bases of Segmentation, Criteria for Effective Targeting of Market Segments.

Is the subject of Consumer Behavior interdisciplinary ?


1. Psychology (the study of the individual: individual determinants in buying behavior) 2. Sociology (the study of groups: group dynamics in buying behavior ) 3. Social psychology (the study of how an individual operates in group/groups and its effects on buying behavior) 4. Anthropology (the influence of society on the individual: cultural and cross-cultural issues in buying behavior) 5. Economics (income and purchasing power)

Course Objective
To familiarize the students with the perceptions, experiences and formulation processes pertinent to the making of a judgment on the behaviour of consumers, which changes frequently over a period of time.

Complexity of Consumer Behaviour

Introduction to CB
Consumer Behavior may be defined as the interplay of forces that takes place during a consumption process, within a

consumers self and his environment. - this interaction takes place between three elements viz. Knowledge, Affect and Behavior; - it continues
through pre-purchase activity to the post purchase experience; - it includes the stages of evaluating, acquiring, using and disposing of goods and services.

The behavior that consumers display in searching for, purchasing, using, evalauting and disposing of products and services that they expect will satisfy their needs. -Schiffman and Kanuk ..the decision process and physical activity engaged in when evaluating, acquiring, using or disposing of goods and services." - Loudon and Bitta

Consumer Psychology Includes variety of topics including:


How consumers choose businesses, products and services The thought processes and emotions behind consumer decisions

How environmental variables such as friends, family, media and culture influence buying decisions
What motivates people to choose one product over another How personal factors and individual difference affect people's buying choices

What marketers can do to effectively reach out to their

CB Definition
the dynamic interaction of effect and cognition, behavior and the environment by which human beings conduct the exchange aspects of their lives

-American Marketing Association

Reasons for Studying Behavior


The study of consumer behavior deals with understanding consumption patterns and behavior. It includes within its ambit the answers to the following: - What the consumers buy: goods and services - Why they buy it: need and want - When do they buy it: time: day, week, month, year, occasions etc. - Where they buy it: place - How often they buy it: time interval - How often they use it: frequency of use

EXAMPLE
The lady of a house who is a housewife and spends her day at home doing household chores watches TV in her free time. That is her only source of entertainment. The TV at home is giving problem. She desires a new TV set, and says that she wants an LCD plasma TV. Now the roles played are:
1. Initiator: the housewife (mother) 2. Influencer: a friend / neighbour 3. Decider: the husband or the son 4. Buyer: the husband or the son 5. User: the family

Types of Market Segmentation


Psychographic segmentation The basis of such segmentation is the lifestyle of the individuals. The individuals attitude, interest, value help the marketers to classify them into small groups. Behaviouralistic Segmentation The loyalties of the customers towards a particular brand help the marketers to classify them into smaller groups, each group comprising of individuals loyal towards a particular brand. Geographic Segmentation Geographic segmentation refers to the classification of market into various geographical areas. A marketer cant have similar strategies for individuals living at different places. Nestle promotes Nescafe all through the year in cold states of the country as compared to places which have well defined summer and winter season. McDonalds in India does not sell beef products as it is strictly against the religious beliefs of the countrymen, whereas McDonalds in US freely sells and promotes beef products.

UNIT -4
Consumer Decision Process

Consumer Decision-Making Process


Cultural, Social, Individual and Psychological Factors affect all steps

Need Recognition

Information Search Evaluation of Alternatives Purchase Postpurchase Behavior

Cognitive Dissonance
Inner tension that a consumer experiences
after recognizing an inconsistency between behavior and values or opinions.

Postpurchase Behavior
Cognitive Dissonance

Can minimize through: Effective Communication Did I make a good decision? Follow-up Guarantees Did I buy the right product? Warranties

Did I get a good value?

Five Factors influencing Decisions


1.
2.

Level of consumer involvement


Length of time to make decision

3.
4.

Cost of good or service


Degree of information search

5.

Number of alternatives
considered

Factors Influencing Buying Decisions


Cultural Factors Social Factors CONSUMER DECISIONMAKING PROCESS BUY / DONT BUY

Individual Factors

Psychological Factors

Cultural Influences on Buying Decisions


Values Language Myths Customs

Components of Culture

Rituals Laws
Material Artifacts

Social Influences
Social Influences on Buying Decisions

Reference Groups

Opinion Leaders

Family Members

Individual Influences
Individual Influences
Age Family Life Cycle Personality Self-Concept Lifestyle

Gender

Psychological Influences
Perception

Motivation

Learning

Psychological Influences on Buying Decisions

Beliefs & Attitudes

Perception
Selective Exposure
Consumer notices certain stimuli and ignores others

Selective Distortion

Consumer changes or distorts information that conflicts with feelings or beliefs

Selective Retention

Consumer remembers only that information that supports personal beliefs

PRODUCT

The basic components in consumption behavior


a) Decision making (Cognitive and Affect) b) Actual purchase (Behavior): c) Individual determinants and environmental influences d) Buying roles. e) Buyers and Sellers

Consumerism
Consumerism is a social and economic order that encourages the purchase of goods and services in ever-greater amounts

MODULE -2
1. 2. 3. 4. 5. Consumer Decision Process Problem recognition; Search evaluating purchasing processes; post purchase behaviour; Consumer behaviour models; consumerism; organizational buying behaviour.

New Delhi: Consumer complaints India has launched their official website : www.consumercomplaintsindia.org , which gives a platform for the consumers to voice out their issues and brands to address them effectively and efficiently. To protect the rights of a consumer within the expanding markets, it is a step towards promoting consumerism in India. While The Consumer Protection Act 1986 came into force only with effect in 1987, a large section of consumers in India remain unaware of their rights as a consumers.

FACTS
ET explains the concept of purchasing power parity What is purchasing power parity? Purchasing power parity is based on the assumption that in absence of duties, transaction costs and other curbs, identical goods should have the same price in different countries when expressed in same currency.

References
http://www.nptel.iitm.ac.in/courses/11010 5029/ http://www.slideshare.net/kumaravinash2 3/chapter-3-market-segmentation