KEY TERMS IN CONSUMER

BEHAVIOUR
 PERCEPTION MOTIVATION NEED
 CULTURE DECISION WANT
 SUB CULTURE DEMOGRAPHY DEMAND
 SEGMENTATION GEOGRAPHY
 TARGET MARKET BEHAVIOUR
 PRODUCT POSITIONING TRAIT
 PERSONALITY GROUP
 LEARNING SOCIETY
 ATTITUDE VALUE
 FAMILY HOUSEHOLD
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Perception : the ability to see, hear, or become aware of
something through the senses
the way in which something is regarded, understood,
or interpreted
Culture : the ideas, customs, and social behaviour of a
particular people or society
Subculture : a cultural group within a larger culture, often
having beliefs or interests at variance with those of the
larger culture
Segmentation : means to divide the marketplace into parts,
or segments, which are definable, accessible,
actionable, and profitable and have a growth potential
Target market : a particular group of consumers at which a
product or service is aimed
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Product positioning: to determine how to best communicate
their products' attributes to their target customers based
on customer needs, competitive pressures
Personality: the combination of characteristics or qualities
that form an individual's distinctive character
Learning: the acquisition of knowledge or skills through
study, experience, or being taught
Attitude: the way you feel about something or someone, or
a particular feeling or opinion
a predisposition or a tendency to respond positively or
negatively towards a certain idea, object, person, or
situation
Family: a group consisting of two parents and their children
living together as a unit
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Motivation: a reason or reasons for acting or behaving in a
particular way
Decision: a conclusion or resolution reached after
consideration
the action or process of deciding something or of resolving a
question
Demography: the study of statistics such as births, deaths,
income, or the incidence of disease, which illustrate the
changing structure of human populations
Geography: the study of the physical features of the earth
and its atmosphere, and of human activity as it affects and
is affected by these, including the distribution of
populations and resources and political and economic
activities
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Behaviour : the way in which one acts or conducts
oneself, especially towards others
Trait: a distinguishing quality or characteristic, typically
one belonging to a person
a genetically determined characteristic
Group: a number of people or things that are located,
gathered, or classed together
Society: the aggregate of people living together in a more
or less ordered community
Value: the regard that something is held to deserve; the
importance, worth, or usefulness of something
Household: a house and its occupants regarded as a unit
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 Difference between Consumer & Customer

A consumer is anyone who engages himself in physical

activities, of evaluating, acquiring, using or disposing of
goods and services.
A customer is one who actually purchases a product or
service from a particular organisation or a shop . A
customer is always defined in terms of a specific
product or company

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Defining consumer
behaviour
Consumer behaviour may be defined as the
interplay of forces that takes place during a
consumption process, within a consumer’s self and
his environment, and has the following
characteristics:

– This interaction takes place between three elements,

namely knowledge (cognition), feeling (affect), and
action (behaviour).

– It continues through pre-purchase activity to the post-

purchase experience.

– It includes the stages of evaluating, acquiring, using, 7

 Environment

Cognition Affect

Pre-Purchase:- Consumer Post-Purchase:-

Evaluating Behaviour Using, Disposing
alternatives

Behaviour:-
Acquiring

Environment

Elements in Consumer Behaviour 5A

• C.B. is defined as the study of individuals, groups, or

organizations and the processes they use to select,

secure and dispose of products, services,

experiences or ideas to satisfy needs and the impact

these process have on the consumer and society.

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CB can be said to be the study of
individuals make decisions on how to
spend their available
resources(time,money,effort) on
various consumption related items.
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It stress on the following:
 Who buys products or services?
How do they buy products or services?
Where do they buy them?
How often do they buy them?
When do they buy them?
How often do they use them?

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 The term C.B. describes two different kinds of
consuming entities: The personal consumer buys
goods and services for his/her own use,for the use of
household or as a gift for a friend. The organisational
consumer- includes profit and non profit businesses,
govt agencies and institutions all of which must buy
products and services in order to run their
organisations.

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 History of Consumer Behaviour

# No significant amount of consumer research till 1960

# 1965 – full flow of consumer research projects in academia as well as in

industry

# Paul Nystrom broke away tradition in 1929

# First systematic approach by E. Jerome

# First text book of CB was authored by Engel, Kollat, and Blackwell (1968)

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7 “O” FREMEWORK:
1. Occupants (who)
2. Objects (what)
3. Organisations (who)
4. Operations (how)
5. Occasions (when)
6. Outlet (where)
7. Objectives (why)
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 The Interdisciplinary Nature of Consumer
Behaviour
S. No. Discipline Focus
S. No. Discipline  Focusbuy a product or brand?
Why does a consumer
1 Psychology Why does a consumer buy a product or brand?

1 Psychology  What motivates some consumers to buy flats and others to buy
 bungalows?
What motivates some consumers to buy flats and others
to buy bungalows?
HowHow does the colour of packaging affect the brand choice?
does the colour of packaging affect the brand

choice?
 Why do some consumers prefer shopping in malls and others in
 Whysmall departmental
do some consumersstores?
prefer shopping in malls and
others in small departmental stores?
 Why does a daughter prefer buying brands that her mother buys?
 Why does a daughter prefer buying brands that her
mother
Whybuys?
do consumers think favourably of brands that are high on
equity?
Why do consumers think favourably of brands that are

high on equity?
 Why do some consumers make quick purchase decisions with
 Whyrespect to consumers
do some a product make
or brand,
quickand othersdecisions
purchase take long to do so?
with respect to a product or brand, and others take long
to do so?

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S. No. Discipline Focus

 Why do people buy such products or brands that people in

2 Sociology their peer groups possess?

 Why do people look up to ‘others’, while making purchase

3 Social psychology decisions?

 Why does a person eat in an expensive place when he is

with friends? (especially when he eats just anywhere when
he is alone)
S. No. Discipline Focus

4
 How do customs and traditions influence what we buy
Anthropology and when we buy?

 How do changing lifestyles influence customer choices

and preferences?

 How does a person prioritize his product preferences?

5 Economics
 How does income affect consumer choice with respect
to products or brands?

 Why are some consumers more price-sensitive than

others?

 Why are some consumers deal-prone, and always look

for rebates and discounts?
Characteristics of consumer behaviour include the following:

I. Consumer behaviour involves a process of exchange

between the buyer and the seller, mutually beneficial for
both.

II. Consumer behaviour is dynamic and interactive in nature.

III. The subject can be studied at micro or macro levels

depending upon whether consumer behaviour is analysed
at the individual level or at the group level.

IV. The subject is interdisciplinary.

V. As a field of study, it is descriptive as well as analytical.

VI. The subject is a science as well as an art.

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 Applications of Consumer Behaviour

Marketing of
Products and
Brands

Consumer Applications of Social Marketing

Protection CB

Policy
Formulation

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Application of consumer
behaviour
• Consumer behaviour is viewed as the edifice of the
marketing concept, which is essentially, as we have
seen earlier, a customer-centred philosophy.

• The knowledge of consumer behaviour would help

formulate appropriate marketing strategies for a firm.

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• Consumer behaviour has a number of applications, and
the main application bases are as follows:

 Analysing the environment

 Segmentation, targeting, and positioning

 Designing the marketing strategy

 Designing the marketing mix (4 Ps)

 Application in governmental and non-profit

organizations and social marketing
 Features of Indian Consumer
• Geography Religion
• Population Dress, food
• Urban- Rural Habits & Fashion
• Gender
• Age factor
• Literacy level
• Linguistic diversity

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 Why study consumer
behaviour?
• The subject of consumer behaviour is viewed as an edifice
of the marketing concept, an important orientation in
marketing management.

• The study helps them understand the internal (individual

determinants) and external (environmental factors) forces
that impel people to act out different consumption patterns
and behaviours.

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Importance of Consumer Behaviour:
It helps marketers to understand why people choose
one product or brand over another.
Helps to know how customer makes their choices about
product/service.
It assists in framing consumer oriented marketing
Helps to check change in taste and preferences of
consumers.
It helps marketer in market segmentation.
C.B. helps in product positioning.
C.B. helps the marketer in development of new product.
Helps marketer devise the necessary promotional
strategies.
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Meaning, nature, and types of
consumer involvement
• Involvement is defined as a psychological state that motivates people

to be more aware and careful about people, objects or situations.

• Meaning of consumer involvement

 Consumer involvement is defined as a state of mind that motivates

consumers to identify with goods or service offerings, their consumption

patterns, and consumption behaviour. It indicates a level of interest that a

person has in a product category and the personal importance and social

significance that he/she attaches to a good and service category.

 Involvement explains the differences in the degree of both

mental and physical effort of a consumer and his decision-

making.

 Involvement of consumers while making purchase decisions

varies (i) across people, (ii) across the nature of good and

service offerings in question (cost, risk, and social visibility),

as well as (iii) with purchase situations and time in hand.

• Nature of consumer involvement
Involvement possesses certain properties:

It has a level of strength and intensity that

determines the degree of involvement that a
consumer possesses. This could be high or low.

The length of time that the consumer remains in this

heightened state determines the level of persistence.

Involvement is a motivational state and has both

cognitive and affective components.
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Mechanism underlying the
consumer involvement process
• A mechanism underlies the process of
involvement. As a process, involvement is
impacted by certain ‘antecedents’, which get
restrained by ‘moderators’, which further affect
‘properties of consumer involvement’, finally
leading to ‘consumer responses’, reflected in
the purchase decision-making process.
 Moderators

-The opportunity available to the

person to collect and collate facts
and information

-His cognitive ability to process

information and draw conclusions

- The time available in hand

Moderat
es
Antecedents to Consumer Response
Involvement On
PROPERTIES OF
Affect
CONSUMER Mediates
-Person himself, -Information search
individual INVOLVEMENT
determinants and -Information
sociological influences processing
-Level of Strength and
-Stimuli/object or the Intensity: High vs. Low -Information
good/service offering transmission
-Level of Persistence:
-Situational Situational vs. Enduring -Purchase decision
circumstances -Post purchase
behavior

Mechanism underlying the consumer involvement process

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• Product versus Brand Involvement Model

 A consumer may be involved with a product category, but may

not necessarily be involved with the brand.

 Consumers can be classified into four types according to their

involvement with the product category and the brand. These

various categories comprise brand loyalists, information

seekers, routine brand buyers, and brand switchers.

 DECISION MAKING
The process by which a person is required to
make a choice from various alternative options is
referred to as decision making. The changing
market environment provides the impetus for a
careful study of consumer decision making or
buyer behavior. Decision making can be of two
types, namely 1. Programmed decision-making
takes place for problems that occur regularly and
are routine in nature.(grocery) 2. Non
programmed decision making occurs for
problems that arise suddenly and are unique.(LIC)
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• High Involvement Low Involvement
COMPLEX DECISION MAKING(products
LIMITED DECISION MAKING(breakfast
such as automobiles,digital camera,I
items,cold drinks,snacks,seeing movies)
pod,T.V. Computer etc.)

BRAND LOYALTY(groceries,sports
INERTIA(tissue napkins,vegetables)
shoes etc.)

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LEVELS OF CONSUMER DECISION MAKING
EXTENSIVE PROBLEM SOLVING: At this level ,the
consumer needs a great deal of information to establish a
set of criteria on which to judge specific brands and a
correspondingly a large amount of information
concerning each of the brands to be
considered.Extensive problem solving often occurs when
a consumer is purchasing an expensive, important or
technically complicated product or service for the first
time.
LIMITED PROBLEM SOLVING:At this level of problem
solving, consumers already have established the basic
criteria for evaluating the product category and the
various brands in the category. This type of problem
solving frequently occurs when the consumer is
purchasing a new updated version of something that he
or she has purchased before.
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o ROUTINIZED RESPONSE BEHAVIOUR: At this level,
consumers have experience with the product category and a
well established set of criteria with which to evaluate the
brands they are considering.In some situations they may
search for a small amount of additional information; in others
they simply review what they already know.

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 Comparison between EPS, LPS, and RPS
Parameter EPS LPS RPS
1 Complexity of decision-making High Medium Low
2 Time taken to make decisions High Low to high Low
3 Information sources Many Few Few or none
4 Information gathering Yes Yes No
5 Awareness and knowledge of:
a) Decision criteria No Yes Yes
b) Alternative brands available No Somewhat Yes

6 Evaluative criteria Complex Moderate Simple (if at all)

7 Brands considered Many Few One (repeat
purchase)

8 Cognitive dissonance High Rare None

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Stages in consumer decision-making process

The following five stages are involved in the consumer decision-

making process:

need recognition/problem recognition

pre-purchase information search

evaluation of alternatives

purchase decision

post-purchase outcome and reactions

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 Need recognition/problem recognition

• A need or problem recognition could be

simple or complex.

• A problem could be impacted by internal and

external stimuli. These stimuli could assume
various forms and can be categorized into
situational drivers, consumer characteristics,
and marketer-initiated activities.

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 Pre-purchase information search
The amount of information that a consumer
gathers varies and generally depends on the
following:

Product category

Person (or the consumer)

Purchase situation
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• The type of information search activity that a
consumer embarks on may be of three types,
namely, specific, ongoing, and incidental.

• Information sources are of two types, internal

and external.

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 Evaluation of alternatives
• It is a stage where the consumer evaluates and compares the various
available alternatives, makes a judgement about the preferred brand, and
forms a purchase intention.
• The process of evaluation of alternatives varies (a) based on the nature of
the goods and service category, (b) from person to person, and (c) based
on purchase situation.
• The processing and evaluation of information about the various brands in
the consideration set involves two approaches, namely brand processing
and attribute processing.
Brand processing involves the assessment and evaluation of one brand at a time.
Attribute processing involves the assessment and comparison of brands attribute
wise.
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 • Total Set
• Inert Set

• Awareness Set
• Inept Set

• Evoked or Consideration Set

• Choice Set

Hierarchy from the Total Set towards the Choice Set

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• Identification of evaluative criteria (attributes and
benefits) While evaluating alternative products and/or
brands, the consumer needs to identify certain criteria or
parameters on the basis of which he would make a
comparison between the various alternatives. Evaluative
criteria may be both objective (functional) and subjective
(emotional and symbolic) parameters of the brand that are
used by consumers as standards to discriminate amongst
the various alternatives.

The evaluative criteria that consumers use to discriminate and

make a comparison between brands take the form of economic
and behavioural considerations and social influences.
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•Application of decision rules to make the final
choice:

Evaluative criteria are used to make comparison between

different brand alternatives to arrive at a decision.

There can be two kinds of decision rules, namely,

compensatory and non-compensatory rules.

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Compensatory rules
•A compensatory rule uses a ‘trade-off’ between the good and bad
attributes of a product and/or brand. 
Non-compensatory rules
•A lower rating on an attribute cannot be offset by a higher rating
on the other.

•A lower rating or a negative evaluation of any one attribute

eliminates the brand from further consideration.

•Non-compensatory rules could assume three forms: conjunctive,

disjunctive, and lexicographic.
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 Purchase
• This stage of consumer decision-making involves the final decision
on purchase and also the physical act of purchase.

• The purchase decision related to products and/or brands may be

rational and logical based on evaluation of attributes (attribute-
based comparisons). It may also be based on attitudes and
opinions, values and beliefs, and intuition and heuristics. For some
product categories, decisions may be based on affect and feelings,
and fun and fantasy. For others, they may be purely habitual and
out of brand loyalty.

• Consumer purchases may assume forms of trials/first purchases,

repeat purchases, and long-term commitment.
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 Post-purchase outcome and reactions

• This particular stage comprises two stages; stage

I comprises the post-purchase cognitive
dissonance, and stage II comprises product usage
and reaction.

• Stage I: Post-purchase cognitive dissonance:

Post-purchase cognitive dissonance is defined as a
feeling of doubt, anxiety, uncertainty, and tension
that a consumer experiences immediately after the
purchase of a product.
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• Stage II: Product usage and reaction

This post-purchase reaction of the consumers, that is,

their evaluation of the consumption and usage
experience, is significant in three ways. First, it acts as
an experience and gets stored in the memory.
Second, it affects future purchase decisions. Third, it
acts as a feedback.

Consumer satisfaction/dissatisfaction with the

consumption process is based on two dimensions,
namely, objective performance and affective
performance.
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