CONSUMER

BEHAVIOUR
An Introduction
 Scope of CB

• Understand:
– What they buy
– Why they buy
– When they buy
– Where they buy it
– How often they buy it
– How do they buy it
 What is Consumer Behavior?

• The study of the processes involved when

consumers search for / select, purchase,
use or dispose of products, services, ideas
or experiences to satisfy needs and desires.
• Consumers
– Personal consumers or Organizational
consumers
– Buyer, user or both
 Why: Its Importance

• Consumers may be irrational and have no

idea what they want, but it is a fact that
some products sell better than others and
that some advertising works better than
others.

• Therefore, in order to be able to sell, we

need to understand what makes some
marketing plans work better than others
when trying to persuade consumers to buy.
• Why do people brush their teeth?
• Why do people buy the cars they do?
 Pause For Thought

Can you say why people brush their teeth?

Answer seems simple. But now check
against the following: Those who are
hypochondriacs are concerned about germs
and are swayed by a ‘decay prevention’
appeal. Another group, mostly extroverts,
brushes teeth to give them brightness and
shine. But a majority just want a tingling,
fresh sensation as a part of their ritual of
starting a day fresh. Such research makes
the marketers better prepared to meet the
needs of various categories of customers.
 Caselet 1: Ford IKON

During 1996-1999 Ford Escort sold only 13,000 units since

customers perceived in it real and imaginary problems. It earned
the ill reputation of being a stodgy car. Though it was a failed
model, and has been withdrawn now, the company used it as a
learning experience for developing a car exclusively for the
Indian market, the IKON. First of all it decided to understand the
customer, abandoning the conventional demographic route and
decided to focus on psychographics. It asked the all-important
question about Indian attitude towards life and role of car in it. It
identified six distinctive customer clusters out of which it decided
to address two: the affluent ‘puppy’ (young upwardly mobile
professional Punjabi), and the ‘full of life’. The former and the
latter perhaps own a popular car already, are party animals, and
enjoy fast and flashy lifestyle. Further, this company decided to
focus more on second i.e., ‘full of life’ segment since this
category partly subsumes the first one. The car was named the
‘josh’ machine. It turned out to be a great success. So we learn
the lesson.
 Roots of CB

• History of market orientations

– Production concept
– Product concept
– Selling concept
– Marketing concept
• The role of Consumer Research
 •CONSUMER BEHAVIOUR

•What exactly is this?

It is a study which focuses on decisions how an
individual spends his/her disposable income &
time.

This includes decisions relating to:

•What they buy?
•Where they buy?
•When they buy?
•Why they buy?
•How often they buy? , How often they use it?
•This lead to a consumer related marketing
philosophy which came to be known as the
marketing concept.

•The market moved from a selling concept

to a marketing concept, where they
analysed the needs and offered solutions to
the group they were catering to.
 Origin of CB

CB did not originate as a science in isolation.

It has its roots in :

Psychology – study of the individual

Sociology – study of groups
Social psychology - behaviour of individual in
social settings.
Anthropolgy – Influence of society on
individuals.
Economics
The purpose of studying consumer behaviour as
a part of marketing curriculum is to

understand why & how consumers make their

purchase decisions.

These insights enable marketers to design more

effective marketing strategies, especially today
when advanced technologies enable marketers
to collect more data about consumers and
target them more precisely.
 Customer Relationship & Drivers
• Focus on customer relationship, not a single
transaction

• Value - The ratio between perceived benefits

(economic, functional, psychological) and
resources (monetary, time, effort,
psychological) used to obtain those benefits
 Different car models
 Different kinds of restaurants

• Customer Satisfaction – consumer’s

perception of the performance of the product /
service in relation to expectations
 Customer Relationship & Drivers

• Customer Retention – to get customers to

like / believe in your product / services so they
come back repeatedly
• 5 times more expensive to get new customers
than keep existing ones
 Loyal customers buy more
 Are less price sensitive
 Pay less attention to competitors’ advertisements
 Word of mouth
• Post purchase marketing activities very
important for retention
Thank You!