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6 Consumer Behaviours

Consumer behavior​ is the study of how people make decisions about what they buy, want, need, or act
in regards to a product, service, or company. It is critical to understand consumer behavior to know how
potential customers will respond to a new product or service. It also helps companies identify
opportunities that are not currently met.

The ​Consumer Behavior​ is the study of how an individual decides to purchase a particular product over
the other and what are the underlying factors that mold such behavior.

A recent example of a change in consumer behavior is the eating habits of consumers that dramatically
increased the demand for gluten-free (GF) products. The companies that monitored the change in eating
patterns of consumers created GF products to fill a void in the marketplace. However, many companies
did not monitor consumer behavior and were left behind in releasing GF products. Understanding
consumer behavior allowed the pro-active companies to increase their market share by anticipating the
shift in consumer wants.

Factors influencing Consumer Behaviour

Marketers try to understand the actions of the consumers in the marketplace and the underlying motives
for such actions. These motives are the factors that influence the consumer behavior. These are:

Psychological Factors:​ The human psychology plays a crucial role in designing the consumer’s
preferences and likes or dislikes for a particular product and services. Some of the important
psychological factors are:
* Motivation
* Perception
* Learning
* Attitudes and Beliefs
Social Factors: ​The human beings live in a complex social environment wherein they are surrounded by
several people who have different buying behaviors. Since the man is a social animal who likes to be
acceptable by all tries to imitate the behaviors that are socially acceptable. Hence, the social factors
influence the buying behavior of an individual to a great extent. Some of the social factors are:
* Family
* Reference Groups
* Roles and status
Cultural Factors: ​It is believed that an individual learns the set of values, perceptions, behaviors, and
preferences at a very early stage of his childhood from the people especially, the family and the other key
institutions which were around during his developmental stage. Thus, the behavioral patterns are
developed from the culture where he or she is brought up. Several cultural factors are:
* Culture
* Subculture
* Social Class
Personal Factors:​ There are several factors personal to the individuals that influence their buying
decisions. Some of them are:
* Age
* Income
* Occupation
* Lifestyle
Economic Factors: ​The last but not the least is the economic factors which have a significant influence
on the buying decision of an individual. These are:
* Personal Income
* Family Income
* Income Expectations
* Consumer Credit
* Liquid Assets of the Consumer
* Savings

These are some of the underlying factors that influence the consumer behavior, and the marketer must
keep these in mind, so that appropriate strategic marketing decision is made.

Consumer Decision Making Process

An individual who purchases products and services from the market for his/her own personal
consumption is called as consumer.
To understand the complete process of consumer decision making, let us first go through the following
example:
Tim went to a nearby retail store to buy a laptop for himself. The store manager showed him all the latest
models and after a few rounds of negotiations, Tim immediately selected one for himself.

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Marketing Notes​ by ​Bharat Malik( MBA-IIM Ranchi, NET-JRF Qualified)​. ​This Material is only
for Marketing Management students (Electronics and Tele-Communication and Automobile Engineering
Branch) of Parala Maharaja Engineering College. Outside Circulation is strictly prohibited.
2
In the above example Tim is the consumer and the laptop is the product which Tim wanted to purchase
for his end-user.
Why do you think Tim went to the nearby store to purchase a new laptop ?
The answer is very simple. Tim needed a laptop. In other words it was actually Tim’s need to buy a laptop
which took him to the store.
The Need to buy a laptop can be due to any of the following reasons:
● His old laptop was giving him problems.
● He wanted a new laptop to check his personal mails at home.
● He wanted to gift a new laptop to his wife.
● He needed a new laptop to start his own business.
The store manager showed Tim all the samples available with him and explained him the features and
specifications of each model. This is called information. Tim before buying the laptop checked few other
options as well. The information can come from various other sources such as newspaper, websites,
magazines, advertisements, billboards etc.
This explains the consumer buying decision process.

A consumer goes through several stages before purchasing a product or service.

Step 1​ - Need is the most important factor which leads to buying of products and services. Need infact is
the catalyst which triggers the buying decision of individuals.
An individual who buys cold drink or a bottle
of mineral water identifies his/her need as thirst. However in such cases steps such as information search
and evaluation of alternatives are generally missing. These two steps are important when an individual
purchases expensive products/services such as laptop, cars, mobile phones and so on.


Step 2 ​- When an individual recognizes his need for a particular product/service he tries to gather as
much information as he can.
An individual can acquire information through any of the following sources:
● Personal Sources - He might discuss his need with his friends, family members, co
workers and other acquaintances.

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Marketing Notes​ by ​Bharat Malik( MBA-IIM Ranchi, NET-JRF Qualified)​. ​This Material is only
for Marketing Management students (Electronics and Tele-Communication and Automobile Engineering
Branch) of Parala Maharaja Engineering College. Outside Circulation is strictly prohibited.
3
 ● Commercial sources - Advertisements, sales people (in Tim’s case it was the store
manager), Packaging of a particular product in many cases prompt individuals to buy the
same, Displays (Props, Mannequins etc)
● Public sources - Newspaper, Radio, Magazine
● Experiential sources - Individual’s own experience, prior handling of a particular product
(Tim would definitely purchase a Dell laptop again if he had already used one) 

Step 3​ - The next step is to evaluate the various alternatives available in the market. An individual after
gathering relevant information tries to choose the best option available as per his need, taste and
pocket.


Step 4 ​- After going through all the above stages, customer finally purchases the product.


Step 5​ - The purchase of the product is followed by post purchase evaluation. Post purchase evaluation
refers to a customer’s analysis whether the product was useful to him or not, whether the product fulfilled
his need or not?

Organizational Buying Behaviours

Organizational buying is the decision-making process by which formal organizations establish the need
for purchased products and services and identify, evaluate, and choose among alternative brands and
suppliers.

Characteristics :
1. Consumer market is a huge market in millions of consumers where organizational buyers are limited in
number for most of the products.
2. The purchases are in large quantities. 

3. Close relationships and service are required. 

4. Demand is derived from the production and sales of buyers. 

5. Demand fluctuations are high as purchases from business buyers magnify fluctuation in demand for
their products. 

6. The organizational buyers are trained professionals in purchasing.

7. Several persons in organization influence purchase.

8. Lot of buying occurs in direct dealing with manufacturers.

Organizational Buying Situations:

Straight rebuy:-
In this buying situation, only purchasing department is involved. That get an information from
inventory control department or section to reorder the material or item and they seek quotations from
vendors in an approved list.

Modified Rebuy ​is a buying situation in which an individual or organization purchase goods that have
been purchased previously but changes either the supplier or some other elements of the previous order.
In this the buyer wants to modify product specifications, terms, prices, suppliers.

New task buy:-

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Marketing Notes​ by ​Bharat Malik( MBA-IIM Ranchi, NET-JRF Qualified)​. ​This Material is only
for Marketing Management students (Electronics and Tele-Communication and Automobile Engineering
Branch) of Parala Maharaja Engineering College. Outside Circulation is strictly prohibited.
4
In this situation, the buyer is buying the product for the first time. As the cost of the product or
consumption value becomes higher, more number of executives are involved in the process. The stages
of awareness, interest, evaluation, trial, and adoption will be there for the products of each potential
supplier. Only the products which pass all the stages will be on the approved list and price competition will
follow subsequently.

Systems buy:-
Systems buying is a process in which the organization gives a single order to a single organization for
supplying a full system. The buying organization knows that no single party is producing all the units in
the system. But it wants the system seller to engineer the system, procure the units from various vendors
and assemble, fabricate or construct the system.

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Marketing Notes​ by ​Bharat Malik( MBA-IIM Ranchi, NET-JRF Qualified)​. ​This Material is only
for Marketing Management students (Electronics and Tele-Communication and Automobile Engineering
Branch) of Parala Maharaja Engineering College. Outside Circulation is strictly prohibited.
5
Organizational Buying Process

Problem recognition:
The first stage of the business buying process in which someone in the company recognizes a
problem or need that can be met by acquiring a good or a service.

General need description:

At this stage of the business buying process company describes the general characteristics and
quantity of a needed item.

Product specification:
At this stage of the business buying process buying organisation decide on the product and
specifies the best technical product characteristics for
a needed item.

Value analysis:
An approach to cost reduction in which components are studied carefully to determine if they
can be redesigned, standardized or made by less costly methods of production.

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Marketing Notes​ by ​Bharat Malik( MBA-IIM Ranchi, NET-JRF Qualified)​. ​This Material is only
for Marketing Management students (Electronics and Tele-Communication and Automobile Engineering
Branch) of Parala Maharaja Engineering College. Outside Circulation is strictly prohibited.
6
Supplier search:
At this stage of the business buying process buyer tries to find the best vendors.

Proposal solicitation:
The stage of the business buying process in which the buyer invites qualified suppliers to submit
proposals.

Supplier Selection:
The stage of the business buying process in which the buyer reviews proposal & selects a
supplier or suppliers

Order-routine specification:
The stage of the business buying process in which the buyer writes the final order with the
chosen supplier(s), listing the technical specifications, quantity needed, expected time of
delivery, return policies, & warranties.

Performance review:
The stage of the business buying process in which the buyer rates its satisfaction with suppliers,

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Marketing Notes​ by ​Bharat Malik( MBA-IIM Ranchi, NET-JRF Qualified)​. ​This Material is only
for Marketing Management students (Electronics and Tele-Communication and Automobile Engineering
Branch) of Parala Maharaja Engineering College. Outside Circulation is strictly prohibited.
7