CONSUMER BEHAVIOUR

CONCEPT OF CONSUMER BEHAVIOR

The study of consumer behavior is the study of how
individuals make decisions to spend of what they buy,
why they buy it, when they buy it, where they buy it,
where they buy it, how often they buy it, and how often
they use it.
the decision process and physical activity individuals
engage in when evaluating, acquiring, using, or
disposing of goods & services.
 SEVERAL ASPECTS
Customers and Consumers
The Ultimate Consumer
Individual buyer
The decision process
A Subset of Human Behavior
 Buying Motives
DEFINITION:

According to W.J Stanton,

A motive can be defined as a drive or an
urge for which an individual seeks
satisfaction. It becomes a buying motive
when the individual seeks satisfaction
through the purchase of something.
Behavior is a goal directed activity

Motive/Need Goal (preparing)

(Hungry)

Goods
(Food) Behavior Goal Achievement
(Eating)
CONSUMER GOODS INDUSTRIAL GOODS
1. Used by end user for their 1. Used for further
own consumption production of other goods
2. Generally inexpensive (raw material)
3. Are less complex 2. Are expensive
4. Are purchase frequently 3. Are more complex
4. Are one time purchase
goods
IMPORTANCE OF CONSUMER BEHAVIOR

The study of consumer behaviour is vital in framing

production policies, price policies, decisions regarding
channels of distribution and above all decisions
regarding sales promotion.
1. Production Policies

2. Price Policies

3. Decision regarding Channels of Distribution

4. Decision regarding Sales Promotion

 MODEL OF BUYER BEHAVIOUR

MAJOR FACTORS INFLUENCING BUYING BEHAVIOUR

MARKETING OTHER BUYERS BUYERS DECISION
STIMULI STIMULI CHARACTERISTICS PROCESS
PRODUCT ECONOMIC CULTURAL PROBLEM RECOGNITION
PRICE TECHNOLOGICAL
SOCIAL INFORMATION SEARCH
PLACE POLITICAL
PERSONAL EVALUATION OF
PROMOTION CULTURAL
PSYCHOLOGICAL ALTERNATIVES
PURCHASE DECISION
POST PURCHASE
BEHAVIOUR

BUYERS DECISIONS
PRODUCT CHOICE
BRAND CHOICE
DEALER CHOICE
PURCHASE TIMING
PURCHASE AMOUNT
WHY WE STUDY COUNSUMER BEHAVIOR/
IMPORTANCE OF CONSUMER BEHAVIOR
IMPORTANCE FOR CONSUMER
IMPROTANCE FOR MARKETING

IMPORTANCE OF CONSUMER BEHAVIOR

APPLICATION TO DECISION MAKING IMPORTANCE FOR STUDENTS

APPLICATION OF CONSUMER BEHAVIOR
 APLICATION OF CB

CB CB & NONPROFIT CB & CONSUMER

AND &SOCIAL MKTING EDUCATIONS
MKTING MGMT

CB & GOVTAL CB &

DECISION MAKING DE-MKTING
 CB AND MARKETING
MANAGEMENT
The process of planning and executing
1. The conception
2. Pricing
3. Promotion
4. Distribution of ideas
5. Goods & services to exchanges
6. Satisfy individual and organizational objectives.
 Three interrelated orientations are:

Consumer wants & needs

Company objectives

Integrated strategy
 Several major activities can be undertaken by an organization

Market opportunity Target market Marketing mix

selection determinants
Analysis

Unique market PRODUCT

needs
PRICE
wants Ex: soft drinks
PLACE
income
Food store
lifestyle segments PROMOTION

Vending machine
segments

The fountain
market
 CONSUMER BEHAVIOR & NONPROFIT & SOCIAL MARKETING

A number of writers have suggested that various social

and non profit organisations can be viewed as having
services or ideas that they are attempting to market to
target group of consumer or constituents.
MARKET SEGMENTATION
 CONCEPT & DEFINITION
The concept of market segmentation is based on the fact that the market of
commodities are not homogenous but they are heterogeneous. Market
represent a group of customers having common charecteristicesbut two
customers are never common in their nature, habits,hobbies, income and
purchase techniques.
 Definition of segmentation
According to Philip Kotler, whenever a market for a
product or service consists of two or more buyers, the
market is capable of being segmented, that is divided
into meaningful buyer groups. The purpose of
segmentation is to determine differences among buyers
which may be consequential in choosing away then or
marketing to them.
LEVELS OF MARKET SEGMENTS
SEGMENT MARKETING
NICHE MARKETING
LOCAL MARKETING
INDIVIDUAL MARKETING
 IMPORTANCE OF MARKET SEGMENTATION

ADJUSTMENT OF PRODUCT AND MARKET APPEALS

BETTER POSITION TP SPOT MARKETING OPPORTUNITIES
ALLOCATION OF MARKETING BUDGET
MAKING THE COMPETITION EFFECTIVELY
EVALUATION OF MARKETING PROGRAMME
EVALUATION OF MARKETING ACTIVITIES
INCREASE IN SALES VOLUME
 CONSUMER BEHAVIOUR MODELS

INPUT

PROCESS

OUTPUT
INITIATION:

INFLUENCER

DECIDER
Decision framework for studying consumer
behaviour

External environmental variables

influencing behavior,
Individual determinants of behaviour,
The consumer decision process
 BUYING ROLES/ PARTICIPANTS IN THE
BUYING PROCESS
INITATORS:
The person who first suggest & think of the idea of buying the particular product.
INFLUENCER:
The person who explicitly or implicitly has some influence on the final buying decision
of others.
DECIDER:
the decider is a person who ultimately determines any part or whole of the buying
decision, i.e., whether to buy, what to buy, how to buy, when to buy, or where to
buy.
BUYER:
the buyer is the person who actually purchase. Buyer may be decider or
may be other person.
USER:
the person who actually uses or consumes the services or products.
 EXTERNAL ENVIRONMENTAL VARIABLE INFLUENCING
BEHAVIOUR

INDIVIDUAL DETERMINANTS
Information processing
Learning and memory
Personality and self concepts
Attitudes
Motivation and involvement
 INDIVIDUAL DETERMINANTS OF BEHAVIOUR

CULTURAL INFUENCES
SUBCULTURAL INFLUENCES
SOCIAL CLASS INFLUENCES
SOCIAL GROUP INFLUENCES
FAMILY INFLUENCES
PERSONAL INFLUENCES
OTHER INFLUENCES
DECISION PROCESS

PROBLEM RECOGNITION

INFORMATION SEARCH
AND EVALUATION

PURCHASING

POST PURCHASING
BEHAVIOUR
Consumer beliefs and attitudes
Innovators
Consumer confidence
Buying styles
techno graphics
CONSUMER INNOVATORS
 INNOVATORS
SEGMENTATION OF EARLY ADOPTERS OF
NEW PRODUCTS AND SERVICES
 KEY CONSUMER BELIEFS
If a product is made by a company I trust
I will buy it even if it is slightly more
expensive.
I buy based on quality not on price.
I am willing to pay more for the product
that is environmentally safe.
I always check the ingredients and
nutritional contents of food products
before I buy them.
 I buy the brand I grew up with the one
my mother used.
I would pay extra for a product that is
consistent with the image I want to
convey
I am influenced by whats hot and whats
not.
I prefer to buy the things by friends and
my neighbors would approve of.
 Consumer Innovator Segments
Electronics
Leisure Innovators
Financial
Food
Home Appliance
INNOVATION ADOPTION MODEL
DEVICED BY Rogers
Awareness and interest of the audience are
created by advertisers, so that the former may
evaluate the message of advertisement.
The potential purchaser, if satisfied with the
attributes advertised, purchases a product on a
trial basis.
Product Comparision is made to evaluate each
and adopt a particular product.
INNOVATION ADOPTION MODEL

AWARENESS INTEREST

ADOPTION EVALUATION

TRIAL
DEFFUSION OF INNOVATION
 DIFFUSION OF INNOVATION
DEFINITION

The framework for exploring consumer

acceptance of new products is drawn from
the area of research known as the
diffusion of innovation
 PROCESSES OF INNOVATIONS
DIFFUSION PROCESSES MACRO PROCESS

ADOPTION PROCESS MICRO PROCESS

 DIFFUSION PROCESS
This is concerned with how innovation
spread
Assimilation of product with the market
It is process of acceptance of an
innovation such as a new product, new
services, new ideas, or new practices.
Mode of communication may be mass
media, sales people, informal
conversation.
Basic elements of diffusion process

The channels of
The innovation communication

The socal system time

 INNOVATION
NO UNIFORM DEFINITON EXIST
THERE ARE OTHER FACTORS DEFINE THIS
CONCEPT
1. FIRM ORIENTED DEFINITION
2. PRODUCT ORIENTED DEFINITION
3. MARKET ORIENTED DEFINITION
4. CONSUMER ORIENTED DEFINITION
5. FACTORS INFLUENSING THE RATE OF DIFFUSION
FIRM ORIENTED DEFINITIONS

A firm oriented approach treats the

newness of a product from the perspective
of the company producing or marketing it.
When the product is new to the company,
it is considered new. This definition
ignores whether or not the product is
actually new to the market place.
 PRODUCT ORIENTED DEFINITION

In contrast to firm oriented definitions, a

product- oriented approach focuses on the
features inherent in the product itself and
on the effects these features are likely to
have on consumers established usage
patterns.
 TYPES OF PRODUCT INNOVATION

CONTINUOUS INNOVATION
DYNAMICALLY CONTINOUS INNOVATION
DISCONTINUOUS INNOVATIONS
 MARKET ORIENTED DEFINITIONS

It judges the newness of a product in terms of

exposures

Two definitions
A product is considered new if it has been
purchased by a relatively small (fixed)
percentage of potential market.
A product is considered new if it has been on
the market for a relatively short (specified)
period of time.
CONSUMER ORIENTED DEFINITION

In this context, a new product is any

product that a potential consumer judges
to be new. Newness is based on the
consumers perception of the product,
rather than on physical features or market
realities.
FACTORS INFLUENCING THE RATE
OF DIFFUSION
Diffusion researchers have identified six
products characteristics that seem to
influence consumer acceptance of new
products:
Relative advantages
Compatibility
Trial ability (or divisibility)
Observability (or Communicability)
Cost
CHANNEL OF COMMUNICATION
WAYS OF COMMUNICATION
1. BETWEEN THE MARKET & CONSUMERS
2. AMONG CONSUMERS
3. IMPERSONAL SOURCES SUCH AS
ADVERTISING AND EDITORIAL MATTERS
4. INTERPERSONAL SOURCES SUCH AS SALES
PEOPLE AND INFORMAL OPINION LEADERS
5. INTERACTIVE MARKETING MESSAGES (NEW
CONCEPT)
 SOCIAL SYSTEM
A social system is a physical, social, or cultural
environment to which people belong and with
in which they function.
Characteristics of modern social system:
1. A positive attitude towards change
2. An advanced technology and skilled labour force
3. A general respect for education and science.
4. An emphasis on rational and ordered social relationships,
rather than an emotional ones.
5. An out reach prospects
6. A system in which members can readily see themselves in
quite different roles.
 TIME
Time is the backbone of the diffusion
process.
three ways
1. Purchase time
2. Adopter categories
3. Rate of Adoption
 PURCHASE TIME

Purchase time refers to the amount of

time that elapse between consumers initial
awareness of a new product or service
and the point at which they purchase or
reject it.
 ADOPTER CATEGORIES

It involves a classification scheme that

indicates where a consumer stands in
relation to other consumers in terms of
time
 RATE OF ADOPTION

The rate of adoption is concerned with

how long it takes a new product or
services to be adopted by members of a
social system. The general veiw is that the
rate of adoption for new products is
getting faster or shorter, Ex. fashion
 ADOPTON PROCESS Adoption

Trial

Legitimating

Attitude

Comprehension

Awareness
OPINION LEADERSHIP
 OPINION LEADERSHIP
DEFINITION:

Opinion leaders are those people who are able, in a

given situation, to expert personal influence.
 CHARECTERISTICES OF OPINION
LEADERS
Social class position
Greater exposure to mass media
Greater interest and knowledge of the areas of
influence
More gregarious
More innovative
More familiar and loyal to group standards and
values
Appear to exhibit the personality trait of public
individuation.
 MEASUREMENT OF OPINION
LEADERSHIP
Consumer researches are interested in
identifying and measuring the impacts of
the opinion leadership process on
consumption behavior.
 BASIC MEASUREMENT TECHNIQUES

Self-Designating Methods
Sociometric Methods
1. The specific individuals to whom they provided
advice or information about the product or brand
under study
2. The specific individuals who provided them with
advice or information about the product or brand
under study.
Key informant Methods
Objective Methods
 USES OF OPINION LEADERS
Consumers, generally, do not speak about
products or services unless they expect to
derive some kind of satisfaction from the
activity.
1. Product- Involvement
2. Self- Involvement
Gaining attention
Showing connoisseurship
Feeding like a pioneer
Having Inside Information
Suggesting Status
Spreading the Gospel
Seeking Confirmation
Asserting Superiority
3. Other- involvement
4. Message - Involvement
CONSUMER DECISION MAKING MODEL
 MEANING
A process by which a person is required to make
a choice from various alternative options is
referred to as decision- making.
Providing consumers with other alternative is a
good business strategy and can also result in
substantial increase in sales. While for the
consumer, he or she will be pleased when able
to choose and decide on the best from the
alternatives available.
 LEVELS OF CONSUMER DECISION
MAKING
SPECIFIC LEVELS OF CONSUMER
DECISION MAKING

1. EXTENSIVE PROBLEM SOLVING

2. LIMITED PROBLEM SOLVING
3. ROUTINIZED RESPONSE BEHAVIOR
4. VARIETY SEEKING
 Extensive problem solving
The consumer needs a great deal of
information to establish a set of criteria on
which to judge specific brands and a
correspondingly large amount of
information concerning each of the brands
to be considered.
The marketer has to ensure two tasks
1. The marketer must continue to provide
satisfaction to the existing customers by
maintaining quality, service and value.
2. He must try to attract new customers by
making use of sales promotion techniques
like point of purchase displays, off-price
offers, etc., and also introduce new features
to the products.
LIMITED PROBLEM SOLVING
Consumers already have established the
basic criteria for evaluating the product
category and the various brands in the
category. Their search for additional
information is more like fine tuning,
they must gather additional brand
information to discriminate among the
various brands.
 ROUTINIZED RESPONSE BEHAVIOUR

Consumers have some experience with the

product category and a well- established
set of criteria with which to evaluate the
brands they are considering. They may
search for the small amount of additional
information; they simply review what they
already know.
 VARIETY SEEKING
Some buying situation are characterized
by low involvement but significant brand
differences, here consumers often do a
brand switching.
 CHARACTERISTICS OF CONSUMER PROBLEM-
SOLVING APPROACHES
Routine Limited Extensive
problem problem problem solving
solving solving
Purchase Low Medium High
involvement
level
Problem Automatic Semiautomatic Complex
recognition
Information search minimal Limited extensive
and evaluation
Purchasing Convenience mixed Shopping
orientation
Post purchase Very limited Limited Inertia Complex loyality
processes habit Brand to repurchase if satisfied
Loyality brand Complaints if
Switching if Dissatisfied
dissatisfaction
 TYPES OF BUYING BEHAVIOR
HIGH INVOLVEMENT LOW INVOLVEMENT

Significant Complex Buying Behavior Variety seeking Buying

differences Behavior
between Brands

Few Differences Dissonance reducing Buying Habitual Buying Behavior

between Brands Behavior
 TYPES OF CONSUMER DECISIONS

WHAT TO BUY
HOW MUCH TO BUY
WHERE TO BUY
WHEN TO BUY
HOW TO BUY
MODULE OF CONSUMER DECISION MAKING
 MODEL OF CONSUMER BEHAVIOUR

C.B. MODEL BY NICOSIA

SCHIFFMAN & KANUK MODEL

 Field -1

Sub Sub field

Field one
One firm Consumer Attributes
Attributes
Attributes

Search Evaluate Field -2

Experience
Field -4 Motivation
Consumption or Storage

Decision (Action) Field -3

Feedback
Purchase Behaviour

C.B MODEL BY NICOSIA

 L.G SCHIFFMAN & L.L.KANUKS
MODEL OF CONSUMER DECISION MAKING
 Firms Marketing effort Socio cultural environment
Product Family

Price Informal sources

Place Non commercial sources

INPUT Promotion Social class

Subculture and culture

CONSUMER DECISION MAKING

Psychological Field
Motivation
Need Recognition Perception
PROCESS Prepurchase search
Learning
Evaluation of Personality
alternatives Attitudes

Experience

Purchases
output Trial
Repeat purchase

Post Purchase evaluation

MARKET MOVERS