CHAPTER ONE: BASICS OF CONSUMER BEHAVIOR
Introduction
Dear learner, the term “customer” it typically used to refer to someone who regularly purchases
from a particular store or company. Thus, a person who shops regularly at Debark Shopping
Mall or who uses Wliya Liquid soap is viewed as a customer of these firms. The term
“Consumer” more generally refers anyone engaging in any of the activities of acquiring, using,
and disposing of products, services, ideas or experiences. Therefore, a customer is defined in
terms of a specific firm while a consumer is not. The traditional viewpoint has been to define
consumers strictly in terms of economic goods and services. This position holds that consumers
are potential purchasers of products and services offered for sale.
All of us are consumers. We consume things of daily use; we also consume and buy these
products according to our needs, preferences and buying power. These can be consumable goods,
durable goods, specialty goods or, industrial goods. What we buy, how we buy, where and when
we buy, in how much quantity we buy depends on our perception, self-concept, social and
cultural background and our age and family cycle, our attitudes, beliefs values, motivation,
personality, social class and many other factors that are both internal and external to us. While
buying, we also consider whether to buy or not to buy and, from which source or seller to buy. In
some societies there is a lot of affluence and, these societies can afford to buy in greater
quantities and at shorter intervals. In poor societies, the consumer can barely meet his barest
needs. Marketers therefore try to understand the needs of different consumers and having
understood his different behaviors which require an in-depth study of their internal and external
environment, they formulate their plans for marketing.
Consumer behavior involves much more than purchasing products. Marketers continuously study
consumer behavior for clues to who buys, uses, and disposes of what products as well as clues to
when, where, and why they do.
Chapter Objectives
Dear learner, after reading this chapter, you should be able to:
Define consumer behavior
Identify the importance of studying consumer behavior
Explain different models of consumer behavior
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1.1 What is consumer behavior?
Dear student, I hope you have developed your own meaning for the term consumer & behavior
either from your own experience or from the above introduction. Could you please write your
understanding /meaning for the term consumer & consumer behavior, in the space provided here
under?
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The academic field of consumer behavior is the study of individuals, groups, or organization and
the process they use to select, use and dispose of products, service, experience, or ideas to satisfy
needs and the impact that these processes have on the consumer and society. Thus we will study
this course as one of the basic unit of the department.
Dear students, the term consumer behavior is defined as the behavior that consumer display in
searching for purchasing, using, evaluating and disposing of product and services that they
expect will satisfy their needs. Consumer behavior can also be defined as the decision-making
process and physical activity involved in acquiring, evaluating, using and disposing of goods and
services.
Consumer behavior focuses on how individuals make decisions to spend their available resources
(time, money, effort) on consumption related items. This includes what they buy, why they buy
it, when they buy it, where they buy it, how often they buy it, how often they use it, how they
evaluate it after the purchase and the impact of such evaluation on future, and how they dispose
of it.
In another words, consumer behavior can be define as the behavior of individuals in regards to
acquiring, using, and disposing of products, services, ideas or experiences. Consumer behavior
also includes the acquisition and use of information. Thus, communication with consumers and
receiving feedback for them is a crucial part of consumer behavior which is of great interest to
marketers.
Dear learners, let us finalize the definition with the following comprehensive description
obtained from Hoyer & Maclnnis (2008), since there is no single definition, “Consumer
behavior reflects the totality of consumers’ decisions with respect to the acquisition,
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consumption, and disposition of goods, services, activities, experiences, people, and ideas by
(human) decision-making units [over time].
1.2 Importance of studying consumer behavior
In this sub part of the chapter, we will discuss the rational of studding consumer behavior.
People, including you, study consumer behavior for a variety of reasons and in a variety of
contexts, such as a student in a university class, a marketing executive working in an
organization, an advertising designer working at a large agency, or a professor teaching and
doing scholarly research. Let’s examine a few of the benefits of studying consumer behavior,
specifically, to improve business performance, to influence public policy, and to educate and
help consumers make better decisions.
The most important reason for studying consumer behavior is the role that it plays in our lives.
We spend a lot of time in shops and market places. We talk and discuss with friends about
products and services and get lot of information from T.V. This influences our daily lives.
Consumer decisions are affected by their behavior. Therefore, consumer behavior is said to be an
applied discipline. This leads to the micro perspective and societal perspective.
Micro Perspective - It involves understanding consumer for the purpose of helping a firm or
organization to achieve its objectives. All the Managers in different departments are keen to
understand the consumer. They may be Advertising Managers, Product Designers, Marketing
and Sales Managers and so on.
Societal Perspective is on the macro level. Consumers collectively influenced economic and
social conditions within a society. Consumers strongly influence what will be product, what
resources will be used and it affects our standard of living.
Marketing starts with the needs of the customer and ends with his satisfaction. When everything
revolves round the customer then the study of consumer behavior becomes a necessity. It starts
with buying of goods. Goods can be bought individually, or in groups. Goods can be bought
under stress (to satisfy an immediate need), for comfort and luxury in small quantities or in bulk.
For all this, exchange is required. This exchange is usually between the seller and the buyer. It
can also be between consumers.
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To understand the likes and dislikes of the consumer, extensive consumer research studies are
being conducted. These researches try to find out:
• What the consumer thinks of the company’s products and those of its competitors?
• How can the product be improved in their opinion?
• How the customers use the product?
• What is the customer’s attitude towards the product and its advertising?
• What is the role of the customer in his family?
The following key questions should be answered for consumer research.
At the same time, people study consumer behavior with the reasons varied as the four different
groups who use consumer research: marketing managers, ethicists and advocates, public
policy makers and regulators, and consumers. On the other hand the understanding of the
reason why we study consumer behavior cannot be over emphasis. Some of these however,
include; Firstly, Consumer behavior is significant in our Daily lives. The most important reason
for studying consumer behavior from a general sense is the role it plays in our lives. Much of our
time is spent directly in the market place and shopping amongst others. Secondly, consumer
behavior is indispensable in decision making. Consumers are often study because certain
decisions are significantly affected by their behavior or expected actions.
For the Applications of Consumer Behavior Knowledge
From the marketing point of view, understanding consumer behavior is crucial to successful
delivery of firms’ offerings in the market place. Some of the marketing application areas of
consumer behavior knowledge include;
Market-Opportunity Analysis, this involves examining trends and conditions in the marketplace
to identify consumers’ needs and wants that are not being fully satisfied.
Target- Market Selection, this has to do with identifying distinct groupings of consumers who
have unique wants and needs and the selection of segment that matches the firm’s strength and
offer better opportunities.
Marketing- Mix Determination, this involves developing and implementing a strategy for
delivering an effective combination of want-satisfying features to consumers within target
market. The marketing mix is made up of four components; product, price, promotion and place.
Marketing strategy, understanding of consumer behavior is needed in strategic marketing
activities. This is because marketing strategies and tactics are based on explicit or implicit beliefs
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about consumer behavior. Effective Regulatory policy in terms of marketing practices requires
an extensive knowledge of consumer behavior.
Social marketing also require an in depth understanding of consumers and their behaviors or
attitudes. Social marketing is the application of marketing strategies and tactics to alter or create
behaviors that have positive effect on the target individuals and or society as a whole. Social
marketing has been used in attempts to reduce smoking, to increase the percentage of children
receiving their vaccinations in a timely manner, to encourage environmentally sound behaviors,
to reduce behaviors potentially leading to AIDS, to enhance support of charities, to reduce drug
use, and many other important courses.
1.3 Models of consumer behavior
Dear learners, before we discuss the types of models of buying behavior, let us first define what
a model is. A model is simplified version of reality but it has its own weak sides, therefore all
models are subject to criticism.
In earlier times, marketers could understand consumers well through the daily experience of
selling to them. But as firms and markets have grown in size, many marketing decision makers
have lost direct contact with their customers and must now turn to consumer research. They
spend more money than ever to study consumers, trying to learn more about consumer behavior.
Who buys? How do they buy? When do they buy? Where do they buy? Why do they buy? The
central question for marketers is: how do consumers respond to various marketing stimuli that
the company might use? The company that really understands how consumers will respond to
different product features, prices and advertising appeal has a great advantage over its
competitors. Therefore, companies and academics have researched heavily the relationship
between marketing stimuli and consumer response. Their starting point is the stimulus–response
model of buyer behavior shown in Fig 1 This shows that marketing and other stimuli enter the
consumer’s ‘black box’ and produce certain responses. Marketers must figure out what is in the
buyer’s black box.
Marketing stimuli consist of the four Ps: product, price, place and promotion. Other stimuli
include significant forces and events in the buyer’s environment: economic, technological,
political and cultural. All these stimuli enter the buyer’s black box, where they are turned into a
set of observable buyer responses (shown on the right-hand side of Fig 1): product choice, brand
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choice, dealer choice, purchase timing and purchase amount. The marketer wants to understand
how the stimuli are changed into responses inside the consumer’s black box, which has two
parts. These are:
1. The buyer’s characteristics influence how he or she perceives and reacts to the stimuli.
2. The buyer’s decision process itself affects the buyer’s behavior.
Fig 1: The Stimulus–Response Model of Buyer Behavior
There are also additional consumer-related models of decision making which are discussed
below:
(i) Economic Man Model: Customer is characterized as an Economic MAN and he makes
rational decision.
(ii) Passive Man Model: It is opposite to Economic Man model and describes the consumer as
impulsive and irrational purchasers. They are ready to yield to the tactics of the consumer. The
salesman takes the consumer through H stages (AIDA). These are:
Attention-Interest-Desire-Action
(iii) Cognitive Man Model: It portrays the consumer as a thinking problem solver. It focuses on
the process by which consumers seek and evaluate information on selecting brands and retail
outlets. The information seeking is stopped as soon as sufficient information is received. It
develops shortcut decisions. The consumer avoids Information Load i.e., too much information.
Chapter review questions
1. What do you understand by consumer behavior?
2. What information is sought in consumer researches?
3. What are the reasons for studying consumer behavior?
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