Lecture 4

Consumer Behaviour
• Consumer behavior is the study of how individuals, groups, and
organizations select, buy, use, and dispose of goods, services, ideas,
or experiences to satisfy their needs and wants
 Purple: Rymbolic of royalty in most of the Western cultures. On the
contrary, the purple colour is symbolic of mourning in Brazil and
What Influences Thailand
Consumer Behaviour? Green: In Asian cultures, green stands for new and eternal life, new
beginnings, fertility, youth, health, and prosperity. In Muslim countries,
green colour is symbolic of their religious identity. If a man wears a
Cultural Factors green colored hat in China, it suggests that the man’s wife is cheating
on him.
 Culture White: While in West it is symbolic of purity, elegance, peace, and
cleanliness; in Asian countries such as India, it stands for death and
 Sub-Culture mourning. 
Black: While Black may be symbolic of formal attire and sophistication
 Social Class in West, it is also signifier of death, evil, mourning, black magic, and
mystery within the same culture. In the Middle East, black is symbolic
Red: Romantic, angry, alarming of both rebirth as well as mourning. In Africa, it symbolizes age,
Yellow: Energetic, happiness, danger maturity, and masculinity.
Blue: Calm, corporate, safe Red: The most symbolic and powerful of all, the Red colour in India
White: Clean, simple, pure stands for fear and fire, wealth and power, purity, fertility, seduction,
Black: Prestigious, intimidating, powerfullove, and beauty. In South Africa, red is associated with mourning and
Orange: Delightful, fun, happiness the section of red in the country’s flag symbolizes violence and
sacrifices that were made during the struggle for independence.
 Social Factors
• Reference groups
• Membership (Primary &
Secondary)
• Aspirational
• Family
• Roles and Status
• Personal Factors • Do Brands have personality?
• Age and Stages in life cycle
• Occupation and Economic
Circumstances
• Personality
• Self Concept (Actual, Ideal,
Others’)
Give
Examples
• Life Style and Values
• Psychological Factors
• Motivation
• Freud, Maslaw, Herzberg
• Perception
• Selective attention
• Selective distortion
• Selective retention
• Learning
• Emotions
The Consumer Decision Process

Need Information Alternative

Purchase Post purchase
recognition search evaluation
Need Recognition
Royalty-Free/CORBIS
Functional needs

©Digital Vision/PunchStock
Psychological needs
Need recognition
• Internal Stimuli
• External Stimuli

• Marketers job: Identify the circumstances that trigger a particular

need and develop marketing strategies that spark consumer interest.
Information search
• Information Sources:
• Primary: Family, friends, neighbours, acquaintances
• Commercial. Advertising, Web sites, salespersons, dealers, packaging,
displays
• Public. Mass media, consumer-rating organizations
• Experiential. Handling, examining, using the product
Search dynamics

Marketers job: Marketers need to identify the hierarchy of attributes that guide consumer decision making.
Must strategize to get its brand into the prospect’s awareness, consideration, and choice sets. The company must
also identify the other brands in the consumer’s choice set so that it can plan the appropriate competitive appeals.
In addition, marketers should identify the consumer’s information sources and evaluate their relative importance.
Asking consumers how they first heard about the brand, what information came later, and the relative importance
of the different sources will help the company prepare effective communications for the target market.
Evaluation of alternatives
• Beliefs and attitudes
• Expectancy Value model
Attribute Weight Ideal Iphone Samsung Vivo Asus Oppo
Design 20 5 5 3 3 2 3
Price 30 5 2 4 4 3 3
Processor 10 5 5 3 2 3 2
Memory 20 5 5 2 3 3 3
Camera 20 5 5 2 3 2 4
  100 500 410 290 320 260 310

What should marketer of Samsung, Asus and Oppo do?

• Redesign the mobile-Real repositioning
• Alter the beliefs about brand-Psychological repositioning
• Alter belief’s about competitors brand- Competitive depositioning
• Alter the importance of weight
• Call attention to neglected attributes
• Shift the buyer’s ideal
Purchase decision
• Product choice
• Brand choice
• Dealer choice
• Quantity choice
• Timing
• Payment method
Consumer’s decision to modify, postpone, or avoid a purchase decision
is heavily influenced by one or more types of perceived risk
• Functional risk
• Physical risk
• Financial risk
• Social risk
• Psychological risk
• Time risk
Post-purchase Behaviour
Customer Satisfaction

Undesirable Consumer
Dissonance
Behavior

Customer Loyalty
Moderating effects: level of involvement
• Low involvement products: Low cost, frequently purchased
What marketers cans do?
• Marketers try to convert a low involvement product into a high
involvement by
• Linking the product to an engaging issue: Sensodyne
• Link the product to a personal situation: All Clear
• Design advertisement to trigger strong emotion: Surf Excel
• Add an important feature: Tata Salt lite
Variety seeking buying behaviour

• Low involvement but significant brand

differences. switching occurs for the sake of
variety, rather than dissatisfaction.
• Market leader’s strategy: Dominate the shelf
space with variety of related but different
products versions. Frequent reminder
advertising. Britannia, the market leader has
7 variants of Tiger against Parle G’s single
variety.
• Market challenger’s strategy: Lower prices,
deals, free samples, advertising providing a
reason for trying new.
Types of Buying Decisions
• Extended Problem Solving
• Limited Problem Solving
• Impulse Buying
• Habitual Decision Making
Consumer Behaviour Model
B2B Markets
Resellers

Manufacturers/
Service
B2B Institutions
providers
Markets

Government
• Nature and size of customers
• Complexity if buying
• Economic and technical choice criteria
• Risks
• Buying to specific requirements
• Derived demand
• Negotiations
Buying Situations
New buy

Buying
situations
Modified Straight
rebuy rebuy
• Suppose you represented a private label manufacturer of women’s
apparel that was selling to Target.
• Think about the differences in the three buying situation? Which
would be the easiest option for the apparel salesperson to
accomplish? Which would be the hardest? Why?
The Buying Center
Influencer

Initiator Decider

Buying
center
Gatekeeper Buyer

User
• Suppose that NITIE wants to set up a computer lab. Who all will be
the member of buying centre and what role will they pay?
B2B Buying Process
Need recognition

Product specification

RFP
process

Proposal analysis and

supplier selection

Order specification

Vendor/ performance
assessment using metrics
Stage 1: Need Recognition
• Can be generated internally or
externally

Times Photo by Toni L

• Sources for recognizing new

Sandys/Newscom
needs:
• Suppliers
• Salespeople

Sylvain Grandadam/The Image

• Competitors

Bank/Getty Images
Stage 2: Product Specifications

• Used by Suppliers to
develop proposals
• Can be done
Royalty-Free/CORBIS

collaboratively with
suppliers
Stage 3: RFP Process
(Request for Proposal)

©Toyota Motor Engineering & Manufacturing North America, Inc.

Step 4: Proposal Analysis, Vendor
Negotiation and Selection
• Often several vendors are
negotiating against each other
• Considerations other than price
play a role in final selection

Courtesy The Goodyear Tire & Rubber Company

Step 5: Order Specification
• Firm places the order
• The exact details of the purchase
are specified
• All terms are detailed including
payment

Digital Vision/Getty Images

Step 6: Vendor Performance Assessment
Using Metrics
(4) Importance x
(3) Vendor’s Performance
(1) Key Issues (2) Importance Score Performance (2) x (3)

Customer Service .40 5 2.0

Issue Resolution .20 4 0.8

Delivery .10 5 0.5

Quality .30 3 0.9

Total 1.00 4.2

What factors will influence NITIE’s decision
to set up computer lab?