UNIT-V

CONSUMER BEHAVIOUR(CB): MEANING AND SIGNIFICANCE

The term consumer behaviour is defined as the behavior that

consumers display in searching for, purchasing, using , evaluating
and disposing of products and services that they expect will
satisfy their needs .CB focuses on how individuals make decisions
to spend their available resources(time, money, effort) on
consumption-related items. That includes what they buy, why
they buy it, where they buy it, how often they buy it, how often
they use it, how they evaluate it after the purchase, the impact of
such evaluations on future purchases, and how often they dispose
of it.

Clearly, as individuals, we are all unique. We consume on a

regular basis food, clothing, shelter, transportation, education,
equipment, vacations, necessities, luxuries, services and even
ideas. As consumers , we play a vital role in the health of the
economy-local, national and international.The purchase decisions
of consumers affect the basic demand for basic raw materials,
transportation,production and banking, they affect the
employment of workers and the deployment of resources, the
success. of some industries and failures of others.

In order to succeed in any business in a dynamic and rapidly

evolving market place, marketers need to know everything they
can about the consumers---what they want,what they think,how
they work, how they spend their leisure time. They need to
understand the personal and group influences that affect
consumer decisions and how these decisions are made.

Determinants Of Consumer Behaviour

Every day in our life we are buying and consuming an incredible

variety of goods and services. However, we all have different
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tastes, likes and dislikes and adopt different behavioural patterns
while making purchase decisions. Each consumer is unique and
this uniqueness is reflected in the consumption behavior. The
study of CB provides us with reasons why consumers differ from
one another in buying and using products and services.

The marketing manager needs appropriate marketing strategies

which he can design only when he understands the factors which
account for these differences in CB and tastes.

Factors influencing CB: CB is affected by a host of variables,

ranging from personal motivations, needs, attitudes and values,
personality chacteristics, soci-economic and cultural background,
age, sex, professional status , family, friends, colleagues and
society as whole. The combination of these various factors
produce a different impact on each one of consumers.

Detailed model of factors influencing CB:

Cultural: culture , sub-culture, social class

Social: Reference groups, family. Roles and statuses

Personal: Age & life Cycle stage, Occupation, income, lifestyle,

personality

Model of CB:The starting point for understanding CB is the

stimulus-response model shown below. Marketing and
environmental stimuli enter the consumers consciousness. A set
of psychological processes combine with certain consumer
characteristics to result in decision processes and purchase
decisions. Four psychological processes---motivation, learning and
memoryfundamentally influence consumer responses to the
various marketing stimuli.

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Psychological: Motivation, perception, learning, beliefs and
attitudes

Key psychological processes: A need becomes a motive when it is

aroused to a sufficient level of intensity. Three of the best-known
theories of human motivation---those of Sigmund Freud, Abraham
Maslow and Herzberg----carry quite different implications for
consumer analysis and marketing strategy

FREUDS THEORY: Sigmund Freud assumed that the

psychological forces shaping behavior are largely unconscious,
and that a person cannot fully understand his or her own
motivations. When a person examines specific brands, he or she
will react not only to their stated capabilities but also to other,
less conscious clues. Shape, size, weight, material, color and
brand name can all trigger certain associations and emotions.

MASLOWS THEORY: All human needs can be classified into five

hierarchical categories and this hierarchy is universally applicable.
This theory was propounded by Abraham Maslow. According to
him hierarchy needs can be ranked in order of importance from
the low biological needs to the higher level psychological needs.

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HERZBERGS THEORY: He developed a two factor theory that
distinguishes dissatisfiers (factors that cause dissatisfaction) and
satisfiers(factors that cause satisfaction). For example, a
computer that does not come with a warranty would be a
dissatisfier.Ease of use would be a satisfier. This theory has two
implications. First, sellers should do their best to avoid
dissatisfiers (for ex. A poor training manual or a poor service
policy). Second, the seller should identify the major satisfiers.

PERCEPTION: Perception can be described as how we see the

world around us. All the time we are receiving messages through
our five organs viz ., eyes, ears, nose , mouth and skin. People
can emerge with different perceptions of the same object because
of three perceptual processes: selective attention, selective
distortion and selective retention .

Selective attention: When consumers are on the look out for a

product, be it Camera, refrigerator, TV, they seem to notice
advertisements pertaining to that specific product. This is
because of selective attention. The marketer has to ensure that
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the stimuli are interesting enough to attract and hold the
attention of the potential customers.

Selective Distortion: it is the tendency to interpret information

in such a way that will fit our preconceptions. For ex. In blind
taste tests, one group of consumers samples a product without
knowing which brand it is, whereas another group of consumers
samples the product knowing which brand it is. These two groups
give two different opinions about the product despite the fact that
two groups are literally consuming exactly the same product

Selective retention: People forget much of the stimuli which

they receive and only retain that information which reinforces
their values and decision.

LEARNING: From a marketing perspective, consumer learning

can be thought of the process by which individuals acquire
the purchase and consumption knowledge experience
that they apply to future related behavior.

The term learning encompasses the total range of learning, from

simple, almost reflexive responses, to the learning of abstract
concepts and complex problem solving. The elements included in
the most learning theories are motivation, cues, response and
reinforcement.

Motivation: It acts as a spur to learning. For ex., men and

women who want to take up bicycle riding for fitness and
recreation are motivated to learn all they can about bike riding an
also to practice often. They may seek information concerning the
prices, quality and characteristics of bicycles and learn which
bicycles are the best for the kind of riding they do.

Cues:Cues are the stimuli that give direction to these motives. An

advertisement for an exotic trip that includes bike riding may
serve as a cue for bike riders who may suddenly recognise that

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they need a vaction. The ad is the cue or stimulus that suggests
aa specific way to satisfy a salient motive.

Response: How individuals react to a drive or cuehow they

behave---constitute their response. Positive feedback about
pressure cooker from a friendseeing it on display in a show-
window, a special introductory offer are examples of cues which
influence a housewifes response to the motive for buying a
pressure cooker.

Reinforcement: It increases the likelihood that a specific

response will occur in the future as the result of particular stimuli.
Suppose the housewife buys the pressure cooker and is satisfied
with its performance, then the chances are that she would like
use it as often as possible. The housewifes response to pressure
cooker has been reinforced.

PERSONAL FACTORS: A consumers purchase decisions are also

affected by his personal characteristics such as age, sex, stage in
family life-cycle, education, occupation, income, life-style, his
overall personality and overall self-concept.

Demographic factors and life-cycle stage: The first factor

influencing a buyers decision is his age. Babies and children have
special needs for products such as milk power, baby foods and
toys.Young adults need clothes, recreational and educational
facilities, transportation and a host of other age and fashion
related consumption needs. Women need specialised medical
facilities for pregnancy and delivery. Their requirement of clothes
and cosmetics is different from that of men.Consumption behavior
is also influenced by specific stage of the family life cycle.

Education and occupation: Education widens a persons

horizons, refines his tastes and makes his outlook more
cosmopolitan. An educated person is more likely consume

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educational facilities, books, magazines and other knowledge
oriented products and services.

People following specialized occupations such as photography,

music, dance, carpentry etc, need special tools and equipment.
CEOs, middle level managers and blue collar workers buy
different types of goods and services.

PERSONALITY: personality is sum total of an individuals

psychological traits, characteristics, motives, habits attitudes,
beliefs and outlooks. Different types of personalities can be
classified and each type responds differently to the same stimuli
and personality can be used to identify and predict that response.
In the case of products such as cigarettes, beer and cars,
personality has been used to segment the market.

Life style:Life style is a function of our motivations, learning,

attitudes, beliefs and opinions, social class, demographic factors,
personality etc. Life style is measured by a technique known as
psychographics. It involves measuring consumers responses to
Activities, Interests and Opinions (AIO)

Life style Dimensions:

Attitudes Interests Opinions Demographics

Work family Themselves Age

Hobbies Home social issues education

Social Job Politics Income

Vacation community Business occupation

Entertainment Recreation Economics Familysize

Shopping Media Future citysize

SOCIAL FACTORS:

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Reference Groups: The consumers decision depends on the
people around them with whom they interact and the various
social groups to which they belong. For Ex. Family, neighbours,
close friends colleagues and co-workers are in the primary groups.
Rotary, Lions, Jaycees are some of the well-known social groups in
our society. Labour unions, social clubs and societies are other
types of formal groups.

Direct reference groups which exert a significant influence on

consumers purchase decisions and behavior can be classified
into six categories. These are: the family, friendship groups,
formal social groups, formal shopping groups, consumer
action groups, and work groups.

CULTURAL FACTORS: Culture is an extremely critical and all

pervasive influence in our life. The study of culture encompasses
all aspects of a society such as its religion, knowledge, language,
laws, customs, traditions, music, art, technology, work patterns,
products etc. For our purpose of studying CB, culture can be
defined as the sum total of learned beliefs, values and customs
which serve to guide and direct the consumer behavior of all
members of that society.

Culture is learned through formal learning in which parents and

elders teach children the proper way to behave., informal
learning in which we learn by imitating the behaviour of our
parents and technical learning such as painting, dancing,
singing etc.

In the American Society, individualism, freedom, achievement,

success, material comfort, efficiency and practicality are values
which are followed and imbibed by the younger children. In the
Indian society, on the contrary, conformity, spiritualism, respect
for the elderly, traditionalism and education are some of the
dominant cultural values.

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Sub-culture: Within the large framework of a society there exist
many sub-cultures. A sub-culture is an identifiable distinct,
cultural group, which, while following the dominant cultural values
of the overall society also has its own belief, values and customs
that set them apart from other members of the same society.

Sub-cultural category Illustrative sub-culture

Nationality Indian, sri Lankan, Pakistani

Religion Hindu, Islam,Christian

Race Black, white, Asian

Age young, middle aged, elderly

Sex Male, Female

Occupation Farmer, Teacher, Business

Social Upper, Middle,Lower

Geograhic location south, North, eastern

SOCIAL CLASS: social classes can be defined as relatively

permanent and homogenous division in a society in which
individuals of families sharing similar values, life-styles, interests
and behavior can be categorized.

Social class :

1)Upper upper:

Characteristics: Elite, aristocrats, inherited wealth, well-

known family background, spend lavishly

Consumption pattern: spend on property, homes, best

education for children, jewellary, frequent foreign vacation

2)Lower Upper:

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Characteristics: Top professionals or businessman who have
earned money, style and taste is conspicuous, seek possessions
to reflect their status

Consumption pattern: spend on large homes, best education

for children, imported cars, 5-star hotels, personal computers.

3) Upper Middle:

Characteristics: professional careerists, coming from the

middle class, emphasis on good education; style is gracious and
careful

Consumption pattern: Spend on buying quality products, color

TV, Video Cassette recorder, Car

4) Lower Middle:

Characteristics: white collar workers, small businessmen and

traders, value neatness, want their house and possessions to
reflect this.

Consumption pattern: spends a great deal of time shopping

around for the best bargains, they buy scooter, motocycle etc.

5)Upper Lower:

Characteristics: poorly educated, semi skilled factory workers,

they want security, exhibits high degree of brand loyalty.

consumtion pattern:Black and white TV, Gas stove, buy goods

on hire purchase basis

6) Lower Lower:

Characteristics: often uneducated, at the bottom of the society,

working as unskilled labour, little planning for the future.

Consumption pattern: Buy only the basic necessities of life,

usually buy unbranded products.
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BUYING DECISION PROCESS:

A decision is the selection of an alternative out of the several

number of alternatives available. It is only when there are two or
more alternatives available that there is the need to make a
choice.

The following table highlights the broad range of choices the

consumers have to select from when making a decision, starting
from the generic product to the brand level and retail outlet level .

Levels of purchase for personal transport

Level of decision Alternative

Generic product Two Wheel or Four wheel Vehicle

Category level i) scooter i)car

ii) Motorcycle ii) jeep

iii) moped

Brand Level Scooter Car

1. Bajaj 1.Maruthi

2. Kinetic 2.Ford

3. TVS 3. Nissan

4.Honda

Motorcycle Jeep

1.Yamaha 1.Maruthi Gypsi

2.Honda 2.Mahindra

3.Kawasaki

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 4.Ind-suzuki

Retail Level: Type of retail outlet

1. Company showroom

2. Brand dealer outlet

3. Multi-brand dealer outlet

4. Dealer outlet closest to home

5. Dealer outlet recommended by

friend

There are three factors which influence the degree of active

reasoning by the consumer in his process of decision making.
I)involvement ii) alternative differentiation

iii) time pressure

Involvement:The consumer is likely to spend a great deal of

time before arriving at the final decision when the product is to be
of great personal importance such as car, House, jewellery .

Differentiation: when the consumer perceives that the various

alternatives which are available are very different from one
another in terms of their features and benefits offered, he is likely
to spend more time in gathering information about and evaluating
these different features.

Time pressure: When the consumer is under pressure to make a

decision quickly, you cannot afford to spend a long time finding
out about the various products or brands.

Ex. When you are travelling in your carto a hill station your car
tyre bursts and you need to buy a new one.

Types of purchase decision behavior:

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There are three types of buying behavior:

1.Routinised response behavior(RRB): This occurs when the

consumer already has some experience of buying and using the
product. He is familiar with the various brands available and the
attributes of each and has well establishes criteria for selecting
his own brand.

Ex. Soap, toothpaste, coffe powder soft drinks etc

2.Limited problem solving(LPS): In this case, the consumer is

familiar with the product and the various brands available, but
has no established brand preference.

Ex.the housewife who buys refined vegetable oil, sees a new

brand of oil, Saffola. The housewife needs additional information
about the new brand if she has to take a decision to buy it or not.

3.Extensive problem solving (EPS): This type of buying

behavior occurs when the consumer is encountering a new
product category. He needs information on both the product
category as well as the various brands available in it.

Ex. You are thinking of buying LCD TV to replace your existing TV

STAGES IN THE BUYER DECISION PROCESS:

Marketing scholars have developed a stage model of the

buying process. The consumer passes through five stages:

1. Problem recognition

2. Pre-purchase information search

3. Evaluation of alternatives

4. Purchase decision

5. Post purchase behaviour

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The following figure provides a good frame of reference, because
it captures the full range of considerations that arise when a
consumer faces a highly involving new purchase.

1.PROBLEM RECOGNITION: The buying process starts when

the buyer recognizes a problem or need.Mr.X feels very
uncomfortable carrying his papers, files and lunch packet in his
hand or in a plastic bag to his work place. He identified a
briefcase as the solution to his problem. A person may admire a
neighbours new car or see a TV ad for Hawaiian vacation, which
triggers thoughts about the possibility of making a purchase.

2.PRE-PURCHASE INFORMATION SEARCH: In response to the

stimuli provided by the need for a briefcase, Mr.X starts searching
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for information on the kinds of briefcases available in the market.
Search can be of two types: Internal and external. Internal refers
to recalling relevant information stored in the memory. External
information sources fall into four groups:

Personal: Family, friends, neighbors, colleaques

Commercial: Ads, web sites, sales persons, dealers, displays

Public: Mass media, consumer rating organisations

Experiential: Handling, examining, using the product

Through gathering information, the consumer learns about

competing brands and their features. The following figure explains
the successive steps. The first box shows the total set of brands
available to the consumer interested in buying a computer. The
consumer will come to know only a subset of these
brands(awareness set). Some brands will meet initial buying
criteria (consideration set). As the consumer gathers more
information, only a few will remain as strong contenders (choice
set). The consumer makes a final choice from this set

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3.EVALUATION OF ALTERNATIVES: Mr. X will make his final
decision using certain evaluative criteria. The most commonly
used criteria are i) product attribute ii) relative importance each
attribute to the consumer, iii) brand image iv) attitudes towards
the different brands. Fo ex. The product attributes identified by
Mr. X are; unbreakable, lightweight, spaciousness, reliability of
locking system, color, price. Mrx attaches maximum importance
to the product attributes of light weight and spaciousness as
compared to other attributes. The attributes of interest to buyers
vary by product---for ex:

1.Camera: picture sharpness, camera speeds, camera size,price

2.Hotels:Location, cleanliness, atmosphere, price

3.Mouthwash: color, effectiveness, germ-killing

capacity,taste/flavor

4.Tyres: safety, tread life, ride quality, price

Suppose Mr. Y has narrowed his choice set to four laptop

computers (A,B,C,D). The following table is based on expectancy
value model.

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Suppose Mr.Y assigned 40% of the importance to the computers
memory, 30% to graphics capability, 20% to size and weight and
10% to price. The following computation leads to the perceived
values of A,B,C and D

Computer A=0.4(8)+0.3(9)+0.2(6)+0.1(9)=8.0

Computer B= 0.4(7)+0.3(7)+0.2(7)+0.1(7)=7.0

Computer C=0.4(10)+0.3(4)+0.2(3)+0.1(2)=6.0

Computer D=0.4(5)+0.3(3)+0.2(8)+0.1(5)=5.0

Mr.Y will prefer computer A which(at 8.0) has the highest

perceived value

4.PURCHASE DECISION: In the evaluation stage, Mr.X has

ranked the various brands in terms of his first, second and third
preference. In short, he has made up his mind about which brand
he wants to buy. However, Mr.X may finally end up buying a brand
which is not his most preferred.

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For ex. When Mr.X goes to the shop to make his purchase, the
shopkeepers negative remarks about his most preferred brand
may make him change his mind. Also, it is possible that Mr.X s
preferred brand is not available or there is a very attractive price
discount on the brand ranked third by him which eventually
makes him change his mind.

5.POST PURCHASE BEHAVIOUR: The marketers job does not

end with the purchase. Marketers must monitor post purchase
satisfaction, post purchase actions and post purchase product
uses.

Satisfaction is a function of the closeness between expectations

and the products perceived performance. If performance falls
short of expectations, the consumer is disappointed;if it meets
expectations, the consumer is satisfied; if it exceeds expectations,
the consumer is delighted.

If the consumer is satisfied, he or she will exhibit a higher

probability of purchasing the product again. One survey showed
that 75% of Toyota buyers were highly satisfied and about 75%
intended to buy a Toyota again. Marketers say our best
advertisement is a satisfied customer

Dissatisfied consumers may abandon or return the product. They

may take public action by complaining to the company, going to a
lawyer or complaining to other groups(such as Govt)

Marketers should also monitor how buyers use and dispose of the
product. The following flow diagram explains how customers use
or dispose of products.

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