CONSUMER

BEHAVIOUR
Prepared By:
Dr. Gurpreet Kaur Chhabra
Astt. Prof. MERI
 Overview
of
Consumer Behavior

2
 Overview of Consumer Behavior
Definition 1: Consumer behavior:

The study of how individuals make

decisions:

On how to spend their:

• Available resources( time, money effort)
On various consumption- related items.

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 Overview of Consumer Behavior
Definition 2: Consumer behavior
• The behavior that consumers
display in :
• Searching for,
• Purchasing,
• Using,
• Evaluating,
• And disposing of products and
services
• That they expect will satisfy their
needs.

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 Type of Consumers
Personal Consumer :
The individual who buys goods and services for his
or her own use, for household use, for the use of a
family member, or for a friend.

Organizational Consumer :
A business, government agency, or other
institution (profit or nonprofit) that buys the goods,
services, and/or equipment necessary for the
organization to function.

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Why do we need to study

Consumer Behavior?

• Because no longer can we

take the customer/consumer
for granted.

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 Relevance of Consumer Behavior
The study of consumer behavior is very
relevant for marketers because:

• Information and knowledge of buyer

motives and habits will enable them to draft
suitable marketing programmes
accordingly.

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 Consumer Behavior & Decision
Making interdisciplinary
Consumer behavior as a new discipline
borrowed concepts from other scientific
disciplines such as:
•Anthropology
•Psychology
•Economics
•History and geography
•Socio-psychology
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Anthropology
• The influence of the
culture (within and across)
& society on the
individuals.

• Emphasis on cross-
cultural differences

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 Psychology
• Study of human thinking
and behavior
• Some issues
– Personality
– Personal development
– Cognition (thinking),
perception
– Attention and its limitations
– “Learning”—e.g., acquired
tastes
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 Economics
• Basic economic issues
– Supply and demand
– Rational decision making
– Perfect information
• Emphasis on predicting behavior
• Complications in real life
• Behavioral economics—e.g.,
“mental accounting”

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 History and Geography
• Origins of behavior,
perspectives, and
traditions
• Impact of geography on
individuals
– Isolation
– Language development
– Climate
• Geographic determinism

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 Socio- Psychology
• Is the study of how persons
are influenced by groups.
• Cultural and interpersonal
influences on consumption
—e.g.,
– Fads, fashions
– Diffusion of innovation
– Popular culture

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 Dynamic Consumer Behavior
• Thinking, feelings, and actions of individual
consumers, targeted consumer groups, and
society at large are constantly changing.
• Requires ongoing consumer research and
analysis of important trends.
• Makes development of marketing strategies
difficult and exciting
– Shorter product life-cycle increases importance of
constant innovation

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 Marketing concepts

Production concept
Product concept
Selling concept
Marketing concept
Societal concept
 Shift of focus to better serve
consumers for major reasons
– Increased consumer interest in world markets.

– Dramatic increase in the quality of consumer and

marketing research.
• Use of technology to identify and know customers personally
• Ability to track consumer reactions

– Development of the Internet as a marketing tool.

• E-marketing potential
• Increased importance of consumer behavior research
• Ability to conduct marketing research studies

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Successful Relationships

Customer Customer
Value Satisfaction

Customer
Retention

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 Impact of Digital Technologies

• Consumers have more power and access to

information.
• Marketers can gather more information about
consumers .
• The exchange between marketer and customers
is interactive and instantaneous and goes
beyond the PC.
• Marketers must offer more products and
services.
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 Consumer Research

• Consumer research has developed as an

extension to the field of marketing
research with emphasis on consumer
behavioral aspects.
• The initial thrust on studying CB by
marketers was done for two reasons:
– To determine as to why consumers made the
purchase decisions.
– To understand how consumers would react to
promotional messages. 19
Model
Model of
of Consumer
Consumer Behavior
Behavior
Product Marketing
Marketing and
and Economic
Other
Other Stimuli
Stimuli
Price Technological
Place Political
Promotion Cultural

Buyer’s Characteristics
Decision Buyer’s
Buyer’s Black
Black Box
Box Affecting
Process Consumer
Behavior

Product Choice Purchase

Buyer’s
Buyer’s Response
Response Timing
Brand Choice
Purchase
Dealer Choice Amount
The
The Buyer
Buyer Decision
Decision Process
Process

Need
Need Recognition
Recognition

Information
Information Search
Search

Evaluation
Evaluation of
of Alternatives
Alternatives

Purchase
Purchase Decision
Decision

Postpurchase
Postpurchase Behavior
Behavior
The
The Buyer
Buyer Decision
Decision Process
Process
Step
Step 1.
1. Need
Need Recognition
Recognition

Need
Need Recognition
Recognition
Difference
Differencebetween
betweenan
an actual
actualstate
stateand
andaadesired
desiredstate
state

Internal
Internal Stimuli
Stimuli External
External Stimuli
Stimuli
•• Hunger
Hunger ••TV
TVadvertising
advertising
••Thirst ••Magazine
Thirst Magazinead
ad
••AAperson’s
person’snormal
normal ••Radio
needs Radioslogan
slogan
needs
••Stimuli
Stimuliin
inthe
the
environment
environment
 The
The Buyer
Buyer Decision
Decision
Process
Process
Step
Step 2.
2. Information
Personal
Personal Sources Search
Information
Sources Search
•Family, friends, neighbors
•Most influential source of
information

Commercial •Advertising, salespeople

Commercial Sources
Sources •Receives most information
from these sources

Public •Mass Media

Public Sources
Sources •Consumer-rating groups

•Handling the product

Experiential
Experiential Sources
Sources •Examining the product
•Using the product
The
The Buyer
Buyer Decision
Decision Process
Process
Step
Step 3.
3. Evaluation
Evaluation of
of Alternatives
Alternatives
Product
ProductAttributes
Attributes
Evaluation
Evaluationof
ofQuality,
Quality,Price,
Price,&&Features
Features

Degree
Degreeof
ofImportance
Importance
Which
Whichattributes
attributesmatter
mattermost
mostto
tome?
me?

Brand
BrandBeliefs
Beliefs
What
Whatdo
doIIbelieve
believeabout
abouteach
eachavailable
availablebrand?
brand?

Total
TotalProduct
ProductSatisfaction
Satisfaction
Based
Basedon
onwhat
whatI’m
I’mlooking
lookingfor,
for,how
howsatisfied
satisfied
would
wouldIIbe
bewith
witheach
eachproduct?
product?
Evaluation
EvaluationProcedures
Procedures
Choosing
Choosingaaproduct
product(and
(andbrand)
brand)based
basedon
onone
one
or
ormore
moreattributes.
attributes.
The
The Buyer
Buyer Decision
Decision Process
Process
Step
Step 4.
4. Purchase
Purchase Decision
Decision
Purchase
Purchase Intention
Intention
Desire
Desire to
to buy
buy the
the most
most preferred
preferred brand
brand

Attitudes Unexpected
of others situational
factors

Purchase
Purchase Decision
Decision
The
The Buyer
Buyer Decision
Decision Process
Process
Step
Step 5.
5. Postpurchase
Postpurchase Behavior
Behavior
Consumer’s
Consumer’s Expectations
Expectations of
of
Product’s
Product’s Performance
Performance
Product’s Perceived
Performance

Satisfied
Satisfied Dissatisfied
Dissatisfied
Customer!
Customer! Customer
Customer
Cognitive Dissonance
 CONSUMER DECISION
RULES
• Compensatory decision rule- On the basis of
this decision rule, a shopper evaluates store or
brand alternatives in respect of each salient
attribute and assigns weight for each store or
brand in a consideration set .The computed
value reflects the store’s relative edge as a
potential purchase choice . The proposition is
that the shopper will select the store or brand
that scores the highest among the options
evaluated. This rule is characterized by allowing
a positive evaluation of a store or brand on one
attribute to compensate or make for a negative
evaluation on some other attribute.
• Non- compensatory decision rule - on the basis of this rules
consumers do not balance positive assessment of store on one
dimension against a negative evaluation on other dimensions:
~ Conjunctive rule - Here the shopper establishes a specific, minimal
acceptable level as a cut off point for each dimension. If a particular
prospective store falls below the cut off point on any dimension
(evaluative criteria), it is dropped from the consideration set.
~ Disjunctive rule – Here a shopper sets up a specific ,minimal
acceptable level as a cut off point for each dimension . Acceptability
of a store depends if the store meets or exceeds the limit
established for any one dimension considered most important by the
customer.
~ Lexicographic decision rule – Here the shopper first ranks the
dimensions in terms of their perceived salience or importance .The
shopper then compares the various brand alternatives in terms of a
single attribute that is considered most important. If one brand
scores sufficiently high on this top-ranked dimension (regardless of
the scores on any other attributes) ,it is selected & process ends ,
else process continues with next highest alternative.
FISK’S CONCEPTUAL MODEL OF
DEPARTMENT STORE IMAGE
DIMENSION DETERMINANTS
Locational convenience 1) Access route
2) Traffic barrier
3) Travelling time
4) Parking availability

Merchandise suitability 1) Number of brands stocked

2) Quality of line
3) Breadth of assortment
4) Depth of assortment
5) Number of outstanding
departments in the store
Value for price 1) Price of a particular item in a particular
store
2) Price of same item in another store
3) Price of another item in the same store
4) Price of same item in the substitute
store
5) Trading stamps & discounts

Sales effort and store 1) Courtesy of sales clerks

2) Helpfulness of sales clerks
services
3) Reliability and usefulness of
advertising
4) Billing procedures
5) Adequacy of credit arrangements
6) Delivery promptness and care
7) Eating facilities
 1) Store layout
2) Store décor
Congeniality 3) Merchandise displays
4) Class of customers
5) Store traffic and congestion

Satisfaction with good in use

Post-transaction 1)
2) Satisfaction with returns and
satisfaction adjustments
3) Satisfaction with price paid
4) Satisfaction with accessibility to
store
 CUSTOMER VALUE
Customers are value maximisers,and they tend to take
rational purchase decisions
Concept of customer Delivered value/customer perceived
value-it is the difference between prospective custmer’s
evaluation of all the costs of an offering and the
alternatives.
Customer delivered value=total customer value-total
customer cost.
Total customer value-is the percieved monetary value of
the bundle of the bundle of economic,functional &
psychological benefits that customer expect from a given
market offering.
Total customer cost-is the bundle of costs,customers
expect to incur in evaluating,obtaining,using&disposing
off,the given market offering.
Customer satisfaction-S=P-E
S=SATISFACTION LEVEL
P=PERFORMANCE AS PERCIEVED BY CUSTOMER
E=PERFORMANCE AS ALREADY EXPECTED BY THE CUSTOMER.
Therefore,P<E, P=E, P>E.
 Consumer Buying Decision Process

Marketers Must Identify and Understand:

Who Makes the Buying Decision

Types of Buying Decisions

Stages in the Buying Process

 CONSUMER BUYING
BEHAVIOR
• BUYING ROLES:
– initiator--a person who first suggests the idea of
buying the product or service
– influencer--a person whose views or advice
influences the decision
– decider--a person who decides on any component of
a buying decision
– buyer--the person who makes the actual purchase
– user--a person who consumes the product/service.
 Types
Types of
of Buying
Buying
Decisions
Decisions
High Low
Involvement Involvement
Significant Complex Variety-
differences Buying Seeking
between
brands Behavior Behavior
Few Dissonance- Habitual
differences Reducing Buying
between
Buying
brands Behavior Behavior
 VARIOUS TYPES OF BUYING
SITUATIONS
• Complex buying situation-purchasing a car, computer, house
etc.stress is on pre-purchase councelling.Involvement on marketer’s
part is very high because brands differ widely.
• Habitual buying situation-purchasing grocery items, low involvement
because brands differ marginally marketers job is to make it
available easily.
• Dissonance-reducing buying situation-purchasing carpets, I-tech
electric devices, personal computers etc.High involment is required
at post purchase level so as to reduce post purchase dissonance of
customers.
• Variety-seeking buying situation-purchasing
cookies,perfumes,cosmetics products,clothes,shoes etc.Low
involvement.stress is on attracting retailers& customers through
attractive offers, prompting them to ‘switch’ brands.
Levels of Consumer Decision
Making

Extensive Problem
Solving

Limited Problem
Solving

Routine Response
Behavior

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 Levels of Consumer Decision
Making
• Extensive Problem Solving
– A lot of information needed
– Must establish a set of criteria for
evaluation
• Limited Problem Solving
– Criteria for evaluation established
– Fine tuning with additional information
• Routinized Response Behavior
– Usually review what they already know
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Chapter Fifteen Slide
 •A search by the consumer to establish
the necessary product criteria to evaluate
knowledgeably the most suitable product
to fulfill a need.

•Problem solving occurs when

Extensive
Problem •buyers purchase more expensive
important or technically complicated
Solving
product/service for the first time.

•less frequently purchased products

in an unfamiliar product category
requiring information search &
evaluation
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 •A limited search by a consumer for a
product that will satisfy his or her
basic criteria from among a selected
group of brands.

•Problem solving occurs when buyers

Limited are confronted with an unfamiliar
Problem brand in a familiar product category.
Solving •Often occurs when consumer
purchasing new, updated version of
something already purchased before.

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 •At this level, consumers have
experience with the product
category and a well-established
Routinized set of criteria to evaluate the
brands is considered.
Response
Behavior •Response behavior occurs
when buyers purchase low cost,
low risk, brand loyal, frequently
purchased, low personal
identification or relevance, items
with which they are familiar.
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 Types of consumer involvement
and decision making

Routine Limited Extensive

Involvement Short Low to High

moderate
Time Low Short to Long
moderate
Cost Short Low to High
moderate
Information Internal only Mostly Internal &
Search internal external
Number of one few many
alternatives
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UNIT-2
• Motivation is the
driving force within
individuals that impels
them to action.
• Needs are the
essence of the
marketing concept.
Marketers do not
create needs but can
make consumers
aware of needs.
• Innate Needs
– Physiological (or biogenic) needs that are
considered primary needs or motives

• Acquired Needs
– Learned in response to our culture or
environment. Are generally psychological and
considered secondary needs
• The sought-after results of motivated
behavior
• Generic goals are general categories of
goals that consumers see as a way to
fulfill their needs
• Product-specific goals are specifically
branded products or services that
consumers select as their goals
Is a body spray
an innate or
acquired
need?
• Rationality implies that consumers select
goals based on totally objective criteria,
such as size, weight, price, or miles per
gallon
• Emotional motives imply the selection of
goals according to personal or subjective
criteria
• What products
might be purchased
using rational and
emotional motives?
• What marketing
strategies are
effective when
there are combined
motives?
• Needs are never fully satisfied
• New needs emerge as old needs are
satisfied
• People who achieve their goals set new
and higher goals for themselves
• Are used when a consumer cannot attain
a specific goal he/she anticipates will
satisfy a need
• The substitute goal will dispel tension
• Substitute goals may actually replace the
primary goal over time
• Failure to achieve a goal may result in
frustration.
• Some adapt; others adopt defense
mechanisms to protect their ego.
• Methods by which people mentally
redefine frustrating situations to protect
their self-images and their self-esteem
Construct Items
Aggression In response to frustration, individuals may resort to aggressive
behavior
in attempting to protect their self-esteem. The tennis pro
who slams his tennis racket to the ground when disappointed with
his game or the baseball player who physically intimidates an
umpire
for his call are examples of such conduct. So are consumer
boycotts of companies or stores.
Rationalization People sometimes resolve frustration by inventing plausible
reasons
for being unable to attain their goals (e.g., not having enough
time to practice) or deciding that the goal is not really worth
pursuing
(e.g., how important is it to achieve a high bowling score?).
Regression An individual may react to a frustrating situation with childish or
immature behavior. A shopper attending a bargain sale, for
example,
may fight over merchandise and even rip a garment that another
shopper will not relinquish rather than allow the other
Construct Items
Projection An individual may redefine a frustrating situation by projecting
blame for his or her own failures and inabilities on other
objects/persons. Thus the golfer who misses a stroke may blame
his golf clubs .

Daydreaming Daydreaming or fantasizing enables the individual to attain

imaginary gratification of unfulfilled needs.

Identification People resolve feelings of frustration by subconsciously identifying

with other persons or situations that they consider relevant. For e.g.
if the individual experiences frustration, he overcomes the frustration
by using the advertised product.

Repression Another way that individuals avoid the tension arising from
frustration is by repressing the unsatisfied need. Thus individuals
may “force” the need out of their conscious awareness.
What type of
defense
mechanism is
this
spokesperson
using in this
ad?
• Physiological arousal
• Emotional arousal
• Cognitive arousal
• Environmental arousal

Chapter Four Slide 66

• Behaviorist School
– Behavior is response to stimulus
– Elements of conscious thoughts are to be ignored
– Consumer does not act, but reacts
• Cognitive School
– Behavior is directed at goal achievement
– Needs and past experiences are reasoned,
categorized, and transformed into attitudes and beliefs

Chapter Four Slide 67

• Researchers rely on a
combination of
techniques
• Qualitative research is
widely used
• Projective techniques
are often very successful
in identifying motives.

Chapter Four Slide 68

• Term coined in the 1950s by Dr. Ernest
Dichter
• Based on premise that consumers are not
always aware of their motivations
• Identifies underlying feelings, attitudes,
and emotions
 Perception
• The process by which an
individual selects,
organizes, and interprets
stimuli into a meaningful
and coherent picture of the
world
• Elements of Perception
– Sensation
– Absolute threshold
– Differential threshold
– Subliminal perception

Chapter Six Slide

 Sensation
• Sensation is the immediate and direct
response of the sensory organs to stimuli
– A stimulus is any unit of input to any of the
senses.
• The absolute threshold is the lowest level
at which an individual can experience a
sensation.
 Differential Threshold
(Just Noticeable Difference –
j.n.d.)
• Minimal difference that can be detected
between two similar stimuli
• Weber’s law
– The j.n.d. between two stimuli is not an
absolute amount but an amount relative to the
intensity of the first stimulus
– The stronger the initial stimulus, the greater
the additional intensity needed for the second
stimulus to be perceived as different.

Chapter Six Slide

 Marketing Applications
of the J.N.D.
• Marketers need to
determine the
relevant j.n.d. for
their products
– so that negative
changes are not
readily discernible
to the public
– so that product
improvements are
very apparent to
consumers
 Discussion Question
• How might a cereal
manufacturer such as
Kellogg’s use the j.n.d. for
Frosted Flakes in terms of:
– Product decisions
– Packaging decisions
– Advertising decisions
– Sales promotion decisions
 Subliminal Perception
• Stimuli that are too weak or too brief to be
consciously seen or heard
– They may be strong enough to be perceived by
one or more receptor cells.
• Is it effective?
– Extensive research has shown no evidence
that subliminal advertising can cause behavior
changes
– Some evidence that subliminal stimuli may
influence affective reactions
Aspects of Perception
 Perceptual Selection
Selection Depends Upon:
 Why Are Consumers
Likely to Notice This Ad?
The Attention-Getting Nature of
a Dramatic Image
Perceptual Selection
Important Concepts
 Organization

Principles • People tend to organize

perceptions into figure-
• Figure and
and-ground
ground relationships.
• Grouping • The ground is usually
• Closure hazy.
• Marketers usually design
so the figure is the
noticed stimuli.
Lacoste’s campaign uses a very
plain ground so the symbol weblink

really shows.
Which Concepts of Perception Are
Applied in These Ads?