BBM 22012

CONSUMER
BEHAVIOUR
RDSS Rambandara
METHOD OF EVALUATION

 Continuous assessment (40%)

 Mid-Semester Test (20%)
 Assignments (20%)

 End-semester examination (60%)

RECOMMENDED READINGS

 Schiffman, G.L. and Kanuk, L.L. (2010). Consumer Behaviour. 10th edition, Prentice Hall Publishers, New
Delhi.

 Solomon, R.M. (2012). Consumer Behaviour. 10th edition, Prentice Hall Publishers, New Delhi.

 Hawkins, D.I. and Mothersbaugh, D. (2012). Consumer Behaviour: Building Marketing Strategy. 12th edition,
McGraw-Hill/Irwin Publishers.

 Solomon, R. M. and Rabolt, N. (2008). Consumer Behaviour in Fashion. 2nd edition, Prentice Hall Publishers.

 Peter, J.P. and Olson, J. (2009). Consumer Behaviour and Marketing Strategy. 9th edition, McGraw-Hill/Irwin.

 Hoyer, D.W., Maclnnis, J.D. and Pieters, R. (2012). Consumer Behaviour. 6th edition, Cengage Learning.
LEARNING OUTCOMES PER COURSE UNIT

At the end of the course units the student should be able to:

1. identify the nature and scope of the consumer behaviour as an academic discipline

2. recognize the role of consumer behaviour in marketing strategy development

3. discuss how buyers perceive products/services and what influences the decision-making process

4. explain the relationship between psychological forces & behaviour and their impact on marketing activities

5. recognize relevant models to explain the buying decision process of consumers

 Lesson 01
Introduction to Consumer
Behaviour
DETAILED LEARNING OUTCOMES

At the end of the course units the student should be able to:

1. define consumer behaviour and discuss the role of buying behaviour in marketing

2. discuss the association between consumer behaviour and marketing philosophies

3. recognize the interdisciplinary aspects of consumer behaviour

4. discuss the major era of consumer behaviour evolution

5. recognize the importance of customer value, satisfaction, trust and retention to the organization

6. explain the impact of digital technology on consumer behaviour

7. recognize the ethics in marketing and explain ethical philosophies adopted by marketers
Consumer Behaviour

The behaviour that consumers display in

searching for, purchasing, using, evaluating,
and disposing of products and services that they
expect will satisfy their needs.
Why Consumer Behaviour?

In the past, the importance of consumer behavior was not

realize because it was seller’s market, but modern market
is customer oriented.
Types of Consumer Buying Behaviours
1. Complex Buying Behaviour

 This type of behavior is encountered when consumers are buying an

expensive, infrequently bought product.
 They are highly involved in the purchase process and consumers’
research before committing to a high-value investment.
2. Dissonance-Reducing Buying Behaviour

 The consumer is highly involved in the purchase process but has

difficulties determining the differences between brands.
 ‘Dissonance’ can occur when the consumer worries that they will
regret their choice.
3. Habitual Buying Behaviour

 Habitual purchases are characterized by the fact that the consumer

has very little involvement in the product or brand category.
4. Variety-Seeking Buying Behaviour

 In this situation, a consumer purchases a different product not

because they weren’t satisfied with the previous one, but because
they seek variety.
Consumer Behaviour and Marketing

Group Activity

 Discuss the association between consumer behavior and marketing philosophies.

Consumer Behaviour and Marketing
 Companies use marketing to promote and sell their products or services, and consumer behavior
is how consumers act and respond in the retail environment.
 In order for a company to create a strong marketing campaign, it is important to understand how
and to what the consumer will respond.
 By understanding how buyers think, feel and decide, businesses can determine how best to
market their products and services. This helps marketers predict how their customers will act,
which aids in marketing existing products and services. It also enables innovative businesses to
identify new opportunities before others do.
 Understanding consumer behavior is critical for marketing any product or service successfully.
When a company can understand why people buy what they buy and the reasons behind their
decisions as consumers, the company can create a marketing campaign that specifically
addresses those elements of the purchasing decision.
Interdisciplinary Dimensions of Consumer
Behaviour
Economic Factors
Demand, Supply, Income, Purchasing Power
 There are various factors or Psychology Factors
disciplines which affects Needs, Motivation, Personality, Perception, Attitudes,
consumer behaviour. Learning
 These interdisciplinary Sociology Factors
dimensions can change Society, Social Class, Power, Esteem, Status
Consumer Behaviour and their Socio Psychology Factors
buying decisions. Group Behaviour, Group Influences, Conformity to
group norms, Role Leader
Cultural Anthropology Factors
Beliefs, Values, Attitude towards wealth, Family System,
Caste System
Evolution of Consumer Behaviour
The study of consumer behaviour dates back to around 300 years.

Generally, evolution of consumer behaviour as an important area within the broad field of
marketing incorporates the following stages:

First stage: economic man approach.

 The earliest approach to consumer behaviour, economic man approach observes consumers to
be thinking logically and rationally (reasonably) at all times in relation to decision making.

Second stage: psychodynamic approach.

 Psychodynamic approach views consumer behaviour as biological influence of drivers that are
beyond rational thinking capabilities of individuals (Blythe, 1997).
Third stage: behaviourist approach.

 Behaviourist approach to consumer behaviour focuses on the impact of external factors on

patterns of behaviour amongst individuals (Neal and Quester, 1997).

 The majority of literatures discussing behaviourist approach mention experiments conducted by

Russian scientist Ivan Pavlov (1849 -1936), where dogs were taught to behave in certain ways in
given conditions with organising impact of the same external factor in a repeated manner.

Fourth stage: cognitive approach.

 This approach to consumer behaviour is based on Stimulus – Organism – Response model.

 According to this model once organism is impacted by an external stimulus, the response to the
stimulus directly affects the nature of the final decision about the purchase of products and
services.

 The impact of consumers’ past experiences on the nature of response to stimulus is neglected in
Stimulus – Organism – Response model.
Fifth stage: humanistic approach.

 Humanistic approach to consumer behaviour can be specified as the latest approach.

 The main difference of humanistic approach from previous approaches is it focuses on

explaining introspective factors affecting consumer behaviour rather than attempting to develop
general rules for cluster of consumers.
Customer value, Satisfaction, Trust
and Retention
 Customer value is best defined as how much a product or service is worth to a customer.

 Customer satisfaction is ensuring a customer's needs are met, his problems are handled, and
he's satisfied with his experience with the company and the company's products or services.

 Customer trust is the faith a consumer has in a company. It shows confidence in a company's
commitment to delivering on its promises and doing what's right for the customer.

 Customer retention is getting a customer to return after his first purchase, and continue
returning on a regular basis.
Technology and Consumer Behaviour
 Technology is the leading driver of change globally. It is driving swift change in various areas of
our lives from how we work to how we spend our time at home.

 Everyday consumers around the world use apps and websites to collect information about
various products and services.

 Social media, Netflix, YouTube, Snapchat, Online shopping, all these are now part and parcel of
our lives. It was not so a few decades ago.

 Technology has changed us a lot and as individual consumers, our decision making and
consumption patterns are affected to a large extent by technology.
Technology and Consumer Behaviour
 From what to buy to how and where to buy, and which options to consider, technology plays a
major role in affecting consumer behavior and buyer decision making process across the entire
world.

 As businesses have come to recognize the role of consumers in terms of business growth and
success, they are investing heavily in customer experience across all touchpoints including
physical and digital.
Ethics in Marketing
Chapter Questions

1. Discuss the association between consumer behavior and marketing philosophies.

2. Discuss the importance of customer value, satisfaction, trust and retention to the organization.

3. Explain the impact of digital technology on consumer behavior.

End of the Lesson

Thank You!