CONSUMER BEHAVIOUR

UNIT-I : INTROUCTION TO CONSUMER BEHAVIOUR

Dr.ARAVIND SOUDIKAR Ph.D.

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 1.1 MEANING AND DEFINITION
INTRODUCTION:
Understanding of consumer behaviour is a challenge for
the marketers. It requires them to probe and
investigate a wide range of responses including
affective responses (feelings and emotions are
experiences), cognitive responses (beliefs, opinions,
attitudes, and intentions related to products and
services), and the behavioural responses (actions
involved while obtaining, using and disposing goods
or services.) Moreover, in the long run it is only
those organizations that have been close to their
customers and understood their needs and wants….
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that have been able to compete effectively at the market
place.
It is more necessary that marketers understand
uniqueness and diversity of consumer behaviour and
make product or service offerings accordingly. The
success of organizations will be reflected when
consumers accept such offerings and continue to
patronize it for a long period of time.

So, consumer behaviour is an integral factor in the ebb

and flow of all business in a consumer-oriented
society.

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 Definition of Consumer Behaviour
Consumer Behaviour can be said to be the study of how
individuals make decisions on how to spend their
available resources (time, money, effort) on various
consumption-related items.
It includes the study of Who buys products or services?
What they buy?, Why they buy it?, When they buy it?,
Where they buy it?, How often they buy it?, and How
often they use it?.
These questions will help in understanding better what
factors influence the decision making process of the
consumers. The decision making process identifies
the number of people who are involved in the process
and ascribes a role to them- like the user, decider,
influencer and buyer. 4
It is believed that consumers or customers make
purchase decisions on the basis of receipt of small
number of selectively chosen pieces of information.
Thus it will be very important to understand what and
how much information is required by the customer to
help him evaluate the goods and services offerings.
Thus, the term consumer behaviour is defined as the
behaviour displayed by consumers in searching
for, purchasing, using, evaluating, and disposing
of products and services that they expect will
satisfy their needs.

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 1.2 ROLE OR RELEVANCE OF CONSUMER
BEHAVIOUR IN MARKETING
Consumer behaviour study will enable marketers to
develop powerful insights based on a deep
understanding of what consumers seek and then
ensuring that these are easily available and at
affordable prices too. Through the consumer
behaviour study, the marketer seeks to understand the
functional, psychological and emotional gratification
which consumers seek to desire from the product.
The study of consumer behaviour is very relevant,
especially for marketers because knowledge of the
buyer(s), his or her buying motives and buying habits
will help them in drafting the marketing programmes.
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Specifically put, organizations try to study and analyze
consumer behaviour in order to:
• Adopt a customer culture, which incorporates
customer satisfaction as an integral part of the
company mission.
• Follow the marketing concept, where the
organization plays a consultative role, helping
consumers to select (or identify) products and
services, which would best meet their needs.
• Solicit support from the society, by focusing on
serving its members through giving consumers the
freedom of choice and catering to their needs and
wants.
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1.3 Development of Consumer Behaviour field.
Consumer behaviour as a separate field of study has
gained attention from the 1960’s. In the absence of a
history or a separate research of its own then, this
new discipline drew or borrowed concepts from other
scientific disciplines such as:
• Psychology ( the study of individuls)
• Sociology (the study of groups)
• Socio-psychology (the study of how persons are
influenced by groups)
• Cultural anthropology (the influence of the culture
and society on the individual)
• Economics (relationship between demand and supply
in the flow of marketing activity). 8
Initially, the study of consumer research was
emphasizing a managerial perspective. In that, if the
marketing manager could obtain consumption related
behaviour i.e. if they are able to predict consumer
behaviour, then they can influence it. This type of
consumer behaviour approach came to be known
positivism.
Where as, the approach of studying consumer
behaviour with a view of understanding consumption
behaviour and interpreting such behaviour is called
interpretivism or post-modernism. These
interpretivists have included many subjective aspects
of consumer behaviour such as the effect of moods,
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Emotions, type of situations etc. These interpretivists
have also treated each purchase experience as unique
because of the many variables which influence the
behaviour at that particular moment of time. On
account of its focus on the consumption experience,
the interpretive approach is also referred to as
experientialism.
While conducting consumer researches, it was realized
that in spite of easy acceptance of fashion and fads,
consumers also had a preference for differentiated
products matching their special needs, personalities
and lifestyles. Thus, came into the existence of
market segmentation. Thus, the field of consumer …
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behaviour helpful for adopting the process of market
segmentation.
Similarly, the study of consumer behaviour will also
help in the process of product positioning. This
refers to a marketing strategy adopted so as to
position the product with a specific image in the
minds of the people. This is usually done with the aid
of various promotional techniques, that can be
adjusted to vary the perceived product image to
match the specific needs of the target market.
Other fields which can make use of consumer behaviour
studies is the development of new products, growth of
non profit marketing and international marketing.
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 Low Influence of consumers High
Wholesaler Manufacturer Retailer Consumer

U.S. 1970-1850 1850-WWII 1970-2000 2000+

EUROPE 1560-1760 1760-WWII 1970-2000 2000+

Manufacturing Selling Market Consumer

Orientation Orientation Orientation Ori.

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 FCTORS INFLUENCING CONSUMER BEHAVIOUR

Cultural
Social
Social Personal
Personal
Age Psycho-
Psycho-
Culture Reference
Reference Ageand
and logical
logical
Culture groups life-cycle
life-cycle
groups Motivation
Occupation
Occupation Motivation
Perception
Perception Buyer
Buyer
Sub-
Sub- Family Economic
Economic
culture Family situation
situation Learning
Learning
culture
Lifestyle Beliefs
Beliefsand
and
Lifestyle attitudes
Roles
Roles Personality attitudes
Social
Social and Personality
and and
and
class
class status
status self-concept
self-concept

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 1.4 CONSUMER BEHAVIOUR MODELS
A model is very often referred to as an abstract
representation of a process or relationship. We tend to
hold various models in our minds, which allow us to
make sense of the world, and also help to predict the
likely course of events. To put it simply, models help us
in the development of theories, understanding complex
relationships, and providing the framework for
discussions and research work. In this section we have
made efforts to examine the various models having
relevance to the consumer decision process. The primary
concern is to use the models to understand consumer
behaviour. Consumer behaviorists as well as marketers
are interested in understanding how and why certain
decisions are made.
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 The objectives of modeling have mainly confined to
the following:
i) Description of buying behaviour
ii) Describing the consumer processes
iii) Predictability and Control of Consumer behaviour.

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 SOME MODELS OF CONSUMER BEHAVIOUR
1. The psycho-analytical model : The psychoanalytical
model draws from Freudian psychology. According
to this model, the individual consumer has a complex
set of deep seated motives which drive him towards
certain buying decisions. The buyer has a private
world with all his hidden fears, suppressed desires
and totally subjective longing. His buying action can
be influenced by appealing to those desires and
longings.
According to Mr. Freud, human personality has three
parts namely, 1. The “ID”, the source of all mental
energy which drives one to an action. 2. The “Super
Ego”, the internal representation of what is socially
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approved—one’s conscience. 3. The “Ego”, the
conscious director of ‘ID’ impulses for finding
satisfaction in socially acceptable manner. (Self Esteem)
In other words, ‘ID’ represents one’s basic impulses,
unconscious ‘instincts’ and cravings for immediate
and total satisfaction. These instincts might be even
anti-social. The Super Ego or conscience reflects
one’s idealized or mended behaviour or moral
standards pattern a via media between the extremes,
that is the, conflict between “ID” and “Super Ego” is
resolved by Ego. The Ego is the intermediary which
mediates and processes the dispute action as a rational
control centre between the conflicting extreme sides
of ID and Super Ego.
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It is Ego that directs ones behaviour to satisfy both the “
ID” and “Super Ego”. Thus a person is interested in
buying say SONY TV with characteristics of Hi-
black Trinitron Screen—super drum sound system,
100system memory, 1 tuner digital picture in picture,
A/V Stereo, LD compatibility costing say Birr.30,000
with remote control. Here his ‘ID’ demands the use of
consumer credit liberally to buy that costly T.V. set.
The Super Ego dissuades him from heavy borrowing
as credit beyond certain limits is not acceptable. Here
the Ego acts like a mediator and comes with a fine
compromise of installment system without away
strains and drain on his financial position.
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Here self image of a consumer is a great motivating
force inducing him to buy certain products.
This model can be presented as follows

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 2. Learning model:
All theories of buyer behaviour have been basically
based on a learning model namely, Stimulation-
Response or more popularly known as SR model. SR
learning theory is very useful to modern marketing
and marketers. Learning is the centrifugal point in the
entire study to human behaviour. Learning, as noted
earlier, refers to a change in the behaviour which
occurs as a result of practice. It is a change in the
behaviour that results from previous experience and
behaviour in similar situations. What is important,
learning is a product of reasoning, thinking,
information processing and, of course, perception.

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Therefore, behaviour is deeply affected by the learning
experiences of the buyers.
Of all the psychologists, Pavlovian stimulus or
learning of buyer behaviour is widely accepted. He
says that buyer behaviour is capable of being
manipulated by human drives, stimuli, and responses
of the buyer. This model banks on man’s ability to
leave, forget and discriminate. Learning process
involves three steps namely, Drive—a strong internal
stimulus which impels action. When it is directed
towards a drive-reducing object, it becomes a motive.
A drive- need- thus motivates a person for action to
satisfy the need.
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Here, the objectives are the stimuli which the drives Cues
are weak stimuli. Cues determine when the buyer will
respond. Say, we have cues such as a product
advertisement relevant to the situation and existing in
our environment.
Response is the final stage which is needed to fulfill
the drive or as a need which was acting as a strong
stimulus. Thus, the thirst, can be quenched by an ad.
These sequential components of learning link stimulus
cue and response finally resulting in a habit. In
marketing, it is better known as a learning brand
loyalty, brand images and store patronage. Repeated
reinforcement leads to a habit formation and the
decision process for an individual becomes a matter of
routine. 22
It is worth emphasizing here that we learn through trial
and error and changes in our behaviour are brought
about by practice as experience. The SR model of
Pavlovian learning is made clear by given figure:

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 3. Economic model:
Economic model of consumer behaviour is one-
dimensional. This means that buying decisions of a
person are governed by the concept of utility. Being a
rational man he will make his purchase decisions with
the intention of maximizing the utility/ benefits.
Economic model is based on certain predictions of
buying behaviour (a) price effect-lesser the price of
the product, more will be the quantity purchased (b)
Lesser the price of the substitute product, lesser will
be the quantity of the original product bought
(substitution effect) (c) More the purchasing power,
more will be the quantity purchased (income effect).
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 4. Sociological model:
According to sociological model, the individual buyer
behaviour is influenced by society—by intimate
groups as well as social classes. That is, his buying
decisions are not totally determined by the concept of
utility. That is his buying decisions are governed by
social compulsions. As a part of sociological model—
two important variations can be considered namely,
one that of Nicosia and another Howard & Sheth.
These models are systems models where human
being analyzed as a system with stimuli as INPUT
and behaviour as an OUTPUT. The marketing
scholars have tried to build buyers-behaviour models
purely from stand point view of marketing man.
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 5. Nicosia's Model of Consumer Decision
Process
This model elaborates the decision making steps that the
consumers adopt before buying goods or services. For
ease of understanding the model can be simplified by
grouping together its various elements into fields and
subfields. Various components of the model are
connected through direct as well as feed back loops.
Thus, the marketing organisation affects the target
customers. The customers, in turn, through the effects
of marketers action affect the next decisions of the
marketer himself. This process goes on. The main
fields and subfields of the model are as following:

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Abridged version of Nicosia Model of Consumer Decision Process

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i) Marketer's Communication affecting consumers
attitude : Here the marketing communications include
not only mass media and personal communications but
products, price and even distribution aspects, too. The
exposure of these attributes affect consumer's attitudes
as well as perceptions. These effects on consumers
depend upon his personal characteristics (like values,
personality and cumulative experiences). After
processing the inputs from marketer, the consumer
forms his attitudes as the inputs for the next field.
ii) Consumer's search and evaluation: This step occurs
before consumer becomes motivated to purchase the
product. He seeks more information and

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evaluates the relative merits of competing products'
attributes. The criteria for evaluation do also evolve
with consumers past experiences and the marketer's
inputs in the form of marketing mix.
iii) Purchase action: This is the field 3 of the Nicosia
model. Here, after getting motivated to buy the brand,
the customer actually shops for the product. The
choice of actual retailer does also take place here.
iv) Consumption experience and feedback: After
purchasing the product, the experience with its
consumption can affect the consumers in many ways.
The negative experience may block his future
purchase and lower his attitude and evaluations of the
product. The positive experience may motivate him 30
further to be loyal to the product. In any case, the field
provides significant feedback to the marketer. With
this feedback, the marketer can suitably modify the
next cycle's marketing inputs.
Nicosia's model may appear to be simple and obvious at
the first glance. But its value lies in the integration of
the body of knowledge in the area of consumer
behaviour existing till its time of formulation. It does
also provide insights about how the non-action kind
of variables present in the environment and related to
the consumers trigger actions at the consumers end.
But, it also forces boundaries on the set of possibilities before the
consumers. These boundaries may even be unrealistic. This
kind of situation limits the scope and flexibility of the model.
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 6. Engel-Kollat-Blackwell Model
• First developed in 1968.
• A key feature of the EKB model is the differences
between high and low involvement as part of the
buying process.
• High involvement is present in the high risk purchase
• Low involvement is present in the low risk purchase.
This model talks of consumer behaviour as a decision
making process in the form of 5 steps or activities.
The five steps are as under:
1. Problem recognition: the consumer will recognize a
difference between his or her actual state and what the
ideal state should be. This may occur on
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account of external stimuli.
2. Information search: Initially the information
available with the consumer may be consistent to
other beliefs and attitudes held by him or her. While
being involved in an information seeking or search
stage, the consumer will try to gather more
information from various sources. The individual gets
exposure of the stimuli which may catch his or her
attention, be received and stored or retained in
memory. This method of information is selective in
nature and the consumer will accept the information,
which is conclusive to what is perceived by them.

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3. Alternative evaluation: Now the individual will
evaluate the alternate brands. The methods used for
evaluating the various products will depend on the
consumer’s underlying goals, motives and
personality. The consumer also has certain
predetermined beliefs about the various brands in
terms of the characteristics associated with the
different brands.
4. Choice: the consumer’s choice will depend on his or
her intention and attitude. The choice will depend on
normative compliance and anticipated circumstances.
Normative compliance relates to the extent to which
the consumer is influenced by other people like
friends, family members etc.
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Outcome: The outcome may either be positive or
negative.
Apart from these 5 steps the model also includes a
number of other related variables grouped into five
categories.
• Information input
• Information processing
• Product-brand evaluation
• General motivating influences
• Internalized environmental influences
The Engel-Kollat-Blackwell model consist of four
components:
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i. Information processing: this component comprises
the consumer’s selective exposure, attention,
comprehension and retention of stimuli relating to a
product or brand received from marketing and non-
marketing sources. As a marketer, the first step is to
ensure that a consumer is exposed to your message
or stimuli, pays attention to it, understands what it is
all about and also remembers it.
ii. Central Control Unit: The stimuli thus received and
retained are processed in the central control unit.
The stimuli is processed and interpreted with the
help of four psychological filter:

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a. Stored information and past experience about the
product/brand which serves as a memory for
comparing different alternatives;
b. Evaluative criteria which the consumer uses in
judging the alternatives;
c. General and specific attitudes which influence the
purchase decision;
d. Basic personality traits, which influence how the
consumer is likely to respond to various alternatives.

iii. Decision process: The decision process component

of the model consist of:
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a. Problem recognition
b. Internal search and evaluation
c. External search and evaluation
d. Purchase processes
e. Decision outcomes
If the purchase decision is such that it requires extensive
problem solving, the consumer would go through all
the above five stages. In case of limited problem
solving or reutilized response behaviour, some of the
intervening stages may be skipped and the consumer
may directly reach the purchase decision.

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iv. Environmental Influences: The environmental
factors that may influence the consumer’s purchase
decision are income, culture, family, social class and
physical situations. Depending on the specific
product under consideration, these factors may have a
favorable or unfavorable influence on the purchase
decision.
7. MASLOW’S HIERARCHY MODEL:
• Theory of motivation developed by Abraham
Maslow(1943)
• Illustrated into low needs to high needs.
• Comprises of physiological, safety, belongingness,
esteem and self actualization.
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Can be applied by retailers to understand a targeted
segment’s needs and wants and offer the right product at
the right price, promotion and place.
Maslow’s Hierarchy of
Needs: Self
Actualization
(Self-development)
Esteem Needs
(self-esteem)

Social Needs
(sense of belonging, love)

Safety Needs
(security, protection)

Physiological Needs
(hunger, thirst)
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1.5 HOWARD SHETH MODEL OF BUYING
BEHAVIOUR

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• Inputs: In the Howard Sheth theory, the most
significant stimulus affecting the buying behaviour
are the information cues about the characteristics of
the product. These cues may be significative if it
comes to the buyer from the product itself when he is
involved in a shopping activity. A similar set of cues,
which are symbolic in nature, may also act as
information sources. Both these significative and
symbolic information cues represent the firms
marketing efforts. The broad or product
characteristics acting as information cues are quality,
price, distinctiveness, service and availability. There
are impersonal sources like mass media
communications and advertising, over which the firm
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has no control. However, the information sources also
include sales and service personnel who can add and
help the marketing efforts of the firm. The third
source is social information cues which could affect
buying behaviour towards the product or brand and
these include family, friends or other members of the
group with whom buyer comes into contact or to
which he aspires to be in. The social source is
personal and the company marketer has no control
over this source.
Perceptual Constructs: This refers to all the complex
states or psychological processes (perception) and
how the individual deals with the information cues
received from various sources. It can be seen that
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all information available is not attended to (attention)
and may not always be crystal clear in its meanings
(ambiguity). Although the individual may be engaged
in an overt search for information, sometimes he/she
may be bombarded with unwanted information.
Moreover, any information cues to which the
individual may attend may be distorted (perceptual
bias) as result of his own frame of reference.
Learning Constructs: The second set of hypothetical
constructs in this theory are more complex and
numerous. ‘Motives’ refers to the goals the individual
attempts to achieve through his/her buying behaviour.
These goals are derived from the various drives
(needs), which may be acting as a cue for his/her
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motive. More closely related to the buyers intention in
his attitude towards the product/brand. Whether
he/she formed a positive attitude towards the
product/brand.
Other learning constructs include ‘brand
comprehension’ i.e., knowledge/awareness about the
brand characteristic features that forms the basis for
the buyers evoked set of alternatives; choice criteria,
and the confidence the individual has about his/ her
brand comprehension, attitudes, or intentions. Finally,
the model includes a construct, ‘satisfaction’. This
refers to ‘feedback’ mechanism, i.e., the post
purchase and post use evaluation of the output of the
process.
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Output: The purchase decision is the output. If after
using the product, the consumer is satisfied with it,
this will reinforce his positive attitude and purchase
intent about the product and brand. Also, the positive
attitude makes the consumer more attentive to the
product/brand’s stimuli and further increases his
brand comprehension.
If the consumer is dissatisfied with experience of using
the product/brand, it will trigger off a reaction of
negative attitude, low attention to the product stimuli.
Poor brand comprehension and negative intention to
purchase.

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Exogenous or external Variables:
• Social and Organizational Setting,
• Social class,
• Culture,
• Purchasing power,
• Financial Status,
• Time Pressure.

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