C ONSUMER

BEHAVIOUR

I NTRODUCTION TO CONSUMER BEHAVIOUR

The main object of buyers behaviour studies to understand the buyer, and create a customer through this understanding. Every buyers study has unfolded some new dimension of discipline. The buyers behavior has been approached and analyzed from different angels and under different premises. Different inferences have been drawn. But the subject, too complex to beat, still remains a theorem without an evidence.

Consumer behaviour is the study of when, why, how, and where people do or do not buy a product. It blends elements from psychology, sociology, social anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general.

CONSUMER BEHAVIOUR Buyers behaviuor is defined as all psychological, social and physical behaviour of potential customer as they become aware of purchase, consumes, and tell others about products and services.
i. ii.

D EFINITION

Buyers behaviour involves both individual (psychological) processes and group (social) processes. Buyers behaviour is reflected from awareness right through post purchase evaluation indicating satisfaction or non satisfaction from purchases. Buyers behaviour includes communication, consumption and purchasing behaviour. Buyers behaviour is basically social in nature. Hence, environment plays an important role in shaping the buyers behaviour. Buyers behaviour includes both consumer and business buyers behaviour.

iii. iv. v.

N EED
o

FOR STUDY OF

C ONSUMER (B UYER ) B EHAVIOR

The need of study of (consumer ) buyers can be explained with the help of following point:

Production Policies: The Buyers behavior give an inside into the

various factor which promote him to purchase. If it is know that it is packing or habit or fashion which attract the buyer then the producer will pay social attention to these attribute in this produce and thus consumer behavior deal in formulating production policies.

Price polices: The buyers behaviors is equally important in framing

price policy. The buyer of some product purchase only because particular product are cheaper then the competitive product can not be raised.

On the other hand some other products are purchase because, it enhances the prestige and social status of person. The price such thing can easily be raised or fixed higher. Garment are purchased who think themselves and the followers of Gandhi price of product purchase under emotional motives can also be raised.

Decision regarding Channels of Distribution: The product which are purchased and sold on the basis of low price must have cheap and economic distribution channels. In the case of those product which require after sale services such as T.V sets , refrigerator etc. must have different channel of distribution. Thus decision of channel of distribution are taken on the basis of consumer behaviour. Decision Regarding Sale and Promotion: A study of buyers behavior are also vital in making decision regarding sales promotion. It enables the producer to know what motive promote the buyer to make purchase and the same are utilized in advertising. Media to awaken the desire of society to purchase. The marketers take decision regarding brand, packaging, discount, gifts, etc. on the basis of buyers behavior for promoting sales of the product.

PARTICIPANTS IN CONSUMER BUYING DECISION

It is important for any marketing man, to know who makes the decisions to purchase consumer durables or a nondurable product; generally, for ordinary household products, family members use their knowledge and experience to decide to buy a particular brand or type depending upon quality and price, whereas men are normally involved to make decisions to purchase utility items and costly goods.
There are certain products like music system, color TV, video, camera, electronic equipments, washing machines, scooters, cars, etc., which are decided to purchase not by a single member of the family but by all members of the family. Men take decision in 2/3rd cases, for costly and durable consumer products whereas in Western countries all family members are rarely consulted. This situation is somewhat better in middle class or upper class in Indias urban society.

Hence, it is necessary to know the characteristics of a family which will be helpful in locating who makes the purchase decision. P.G.Herbst in his work, Conceptually Framework for Studying the Family in Early 50s, has observed four types of families such as: 1. Automatic where the equal number of separate decisions are made by each parameter, (2) family where husband takes decision or he dictates the decision (3) wife dominated family where wife takes major decision; and (4) Syncratic where most decisions are joined taken, i.e., everyone is consulted before taking decision.

There are five different participants in any consumer buying decisions: Initiator: Initiator is the person who first suggests the needs of the idea or the need for a particular product which should be brought for satisfying certain requirements. Influences: After the initiator has suggested the idea for a particular product, the Influencer is the person who gives more information or gathers more information which will influence the decision of the purchase. Decider : A decider is the person who ultimately decides to buy a particular product depending upon the situation. Decider is generally the dominating member of the family or head of the family who carries out of the role.

Buyer: The decision has been made for certain goods which buyer goes to purchase from the shop, the actual purchase made by the buyer will depend on the convenience of the family members or of the group and it may depend on the earning members of the family or it may depend upon the dominating person in the group of family.
User: The user is generally one who actually consumes or uses the product or services so that it is believed to satisfy variety of needs like physiological, social, psychological or spiritual. Any product or services offered by seller should give maximum utility value to the consumer for which they have paid. Marketers try to provide maximum consumer satisfaction in terms of satisfaction of needs or requirements for the product or service when the consumers buy the goods

B UYER S D ECISION P ROCESS

Problem Recognition

Information Search
Evaluation of Alternatives

Purchase Decision
Consumption Post purchase behavior

P ROBLEM R ECOGNITION

In this information processing model, the consumer buying process begins when the buyer recognizes a problem or need. For example, Doug may realize that his best suit doesnt look contemporary any more. Or, Kathleen may recognize that her personal computer is not performing as well as she thought it should. These are the kinds of problem that we as consumers encounter all the time. When we found out a difference between the actual state and a desired state, a problem is recognized. When we find a problem, we usually try to solve the problem. We, in other words, recognize the need to solve the problem. But how?

13

PROBLEM/NEED RECOGNITION
From Internal Stimuli: Hunger Thirst Fear

From External Stimuli: Neighbors Purchases Advertisements

Window Shopping
Newspapers & Magazines
SOURCE : PRINCIPLE OF MARKETING, PHILIP KOTLER MARKETING

I NFORMATION SEARCH

Once the consumer has recognized a problem, they search for information on products and services that can solve that problem. Belch and Belch (2007) explain that consumers undertake both an internal (memory) and an external search.

Sources of information include:

Personal sources Commercial sources

Public sources
Personal experience The relevant internal psychological process that is associated with information search is perception. Perception is defined as "the process by which an individual receives, selects, organizes, and interprets information to create a meaningful picture of the world".

15

INFORMATION SEARCH
From Personal Sources: Family Friends

From Commercial Sources: Advertisements Dealers

Neighbors
Acquaintances

Salespersons
Packaging Displays

SOURCE : PRINCIPLE OF MARKETING, PHILIP KOTLER

MARKETING

16

INFORMATION SEARCH (CONTD)

From Commercial Sources:

Advertisements
Dealers Salespersons Packaging Displays

SOURCE : PRINCIPLE OF MARKETING, PHILIP KOTLER

MARKETING

17

INFORMATION SEARCH (CONTD)

From Public Sources:

Mass Media Chambers of Commerce Consumer Rating Magazines

From Experiential Sources:

Handling the Product Examining the Product Using the Product

SOURCE : PRINCIPLE OF MARKETING, PHILIP KOTLER

MARKETING

I NFORMATION EVALUATION

At this time the consumer compares the brands and products that are in their evoked set. How can the marketing organization increase the likelihood that their brand is part of the consumer's evoked (consideration) set? Consumers evaluate alternatives in terms of the functional and psychological benefits that they offer.

The marketing organization needs to understand what benefits consumers are seeking and therefore which attributes are most important in terms of making a decision. It also needs to check other brands of the customers consideration set to prepare the right plan for its own brand.

P URCHASE DECISION

Once the alternatives have been evaluated, the consumer is ready to make a purchase decision. Sometimes purchase intention does not result in an actual purchase. The marketing organization must facilitate the consumer to act on their purchase intention. The organization can use a variety of techniques to achieve this. The provision of credit or payment terms may encourage purchase, or a sales promotion such as the opportunity to receive a premium or enter a competition may provide an incentive to buy now. The relevant internal psychological process that is associated with purchase decision is integration. Once the integration is achieved, the organization can influence the purchase decisions much more easily.

20

PURCHASE DECISION

Interfering Factors:

Attitudes of Others: Opposing and intense opinions of family members, close friends and acquaintances Unanticipated situational factors: Changes in income, job transfer, loss of employment, change of priority e.g. sudden payment of educational fees etc.
SOURCE : PRINCIPLE OF MARKETING, PHILIP KOTLER MARKETING

P OST PURCHASE EVALUATION

The EKB model was further developed by Rice (1993) which suggested there should be a feedback loop, Foxall (2005) further suggests the importance of the post purchase evaluation and that the post purchase evaluation is key due to its influences on future purchase patterns.

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POST PURCHASE BEHAVIOR

Post purchase Satisfaction: Keep the Product

Store the Product

Convert to a Second Use

Post purchase Dissatisfaction: Try to return the product/take legal recourse Rent it Get rid of it/Throw it

SOURCE : PRINCIPLE OF MARKETING, PHILIP KOTLER

MARKETING

FACTORS A FFECTING C ONSUMER B EHAVIOR

Consumer behavior refers to the selection, purchase and consumption of goods and services for the satisfaction of their wants. There are different processes involved in the consumer behavior. Initially the consumer tries to find what commodities he would like to consume, then he selects only those commodities that promise greater utility. After selecting the commodities, the consumer makes an estimate of the available money which he can spend. Lastly, the consumer analyzes the prevailing prices of commodities and takes the decision about the commodities he should consume. Meanwhile, there are various other factors influencing the purchases of consumer such as social, cultural, personal and psychological. The explanation of these factors is given below.

1. Cultural Factors

Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture, and social class.
Culture

Basically, culture is the part of every society and is the important cause of person wants and behavior. The influence of culture on buying behavior varies from country to country therefore marketers have to be very careful in analyzing the culture of different groups, regions or even countries.
Subculture

Each culture contains different subcultures such as religions, nationalities, geographic regions, racial groups etc. Marketers can use these groups by segmenting the market into various small portions. For example marketers can design products according to the needs of a particular geographic group.

Social Class
Every society possesses some form of social class which is important to the marketers because the buying behavior of people in a given social class is similar. In this way marketing activities could be tailored according to different social classes. Here we should note that social class is not only determined by income but there are various other factors as well such as: wealth, education, occupation etc.

2. Social Factors Social factors also impact the buying behavior of consumers. The important social factors are: reference groups, family, role and status. Reference Groups Reference groups have potential in forming a person attitude or behavior. The impact of reference groups varies across products and brands. For example if the product is visible such as dress, shoes, car etc then the influence of reference groups will be high. Reference groups also include opinion leader (a person who influences other because of his special skill, knowledge or other characteristics).

Family Buyer behavior is strongly influenced by the member of a family. Therefore marketers are trying to find the roles and influence of the husband, wife and children. If the buying decision of a particular product is influenced by wife then the marketers will try to target the women in their advertisement. Here we should note that buying roles change with change in consumer lifestyles.

Roles and Status

Each person possesses different roles and status in the society depending upon the groups, clubs, family, organization etc. to which he belongs. For example a woman is working in an organization as finance manager. Now she is playing two roles, one of finance manager and other of mother. Therefore her buying decisions will be influenced by her role and status.

3. Personal Factors

Personal factors can also affect the consumer behavior. Some of the important personal factors that influence the buying behavior are: lifestyle, economic situation, occupation, age, personality and self concept. Age
Age and life-cycle have potential impact on the consumer buying behavior. It is obvious that the consumers change the purchase of goods and services with the passage of time. Family life-cycle consists of different stages such young singles, married couples, unmarried couples etc which help marketers to develop appropriate products for each stage Occupation The occupation of a person has significant impact on his buying behavior. For example a marketing manager of an organization will try to purchase business suits, whereas a low level worker in the same organization will purchase rugged work clothes.

Economic Situation

Consumer economic situation has great influence on his buying behavior. If the income and savings of a customer is high then he will purchase more expensive products. On the other hand, a person with low income and savings will purchase inexpensive products.
Lifestyle Lifestyle of customers is another import factor affecting the consumer buying behavior. Lifestyle refers to the way a person lives in a society and is expressed by the things in his/her surroundings. It is determined by customer interests, opinions, activities etc and shapes his whole pattern of acting and interacting in the world. Personality Personality changes from person to person, time to time and place to place. Therefore it can greatly influence the buying behavior of customers. Actually, Personality is not what one wears; rather it is the totality of behavior of a man in different circumstances. It has different characteristics such as: dominance, aggressiveness, self-confidence etc which can be useful to determine the consumer behavior for particular product or service

4. Psychological Factors There are four important psychological factors affecting the consumer buying behavior. These are: perception, motivation, learning, beliefs and attitudes. Motivation The level of motivation also affects the buying behavior of customers. Every person has different needs such as physiological needs, biological needs, social needs etc. The nature of the needs is that, some of them are most pressing while others are least pressing. Therefore a need becomes a motive when it is more pressing to direct the person to seek satisfaction.

Perception
Selecting, organizing and interpreting information in a way to produce a meaningful experience of the world is called perception. There are three different perceptual processes which are selective attention, selective distortion and selective retention. In case of selective attention, marketers try to attract the customer attention. Whereas, in case of selective distortion, customers try to interpret the information in a way that will support what the customers already believe. Similarly, in case of selective retention, marketers try to retain information that supports their beliefs.

Beliefs and Attitudes

Customer possesses specific belief and attitude towards various products. Since such beliefs and attitudes make up brand image and affect consumer buying behavior therefore marketers are interested in them. Marketers can change the beliefs and attitudes of customers by launching special campaigns in this regard.

INF L UE NCE O F SO C IA L SC IE NCES O N B UY E R B E H A V IOR

All major social sciences like economics, psychology, sociology and anthropology have influenced buyer behavior studies. It is essential to have an idea of the nature of this influence.
Influence of Economics Economists describe man as a rational buyer and view the market as a collection of homogeneous buyers. Under a given set of conditions, all buyers behave in a similar fashion and every buying decision is a logical process with the ultimate intention of obtaining optimum value for the money spent. Price is regarded as the strongest motivation for the economic man. The economic mans behavior, in short, is rational. Though the model of economic man may help us understand certain aspects of buyer behavior, it certainly cannot answer all the puzzles of buyer behavior. The main problem with the concept of economic man is the assumption that buyers are absolutely rational in their purchases and that markets are homogeneous.

Markets are actually a collection of heterogeneous buyers, differing from each other in several characteristics. The marketing process is intended to match these heterogeneous segments of demand with heterogeneous segments of supply.

Influence of Psychology

The next major influence on buyer behavior came from psychology. According to psychologists, any human activity is directed towards meeting certain needs. These needs have been categorized in different ways by different psychologists. Physiological needs are the basic needs: they include the need to satisfy hunger, thirst, sleep, etc. For people who are well off, physiological needs are met as a matter of routine, whereas for the poor, a major part of their time is spent in striving to meet these needs. Safety needs include needs relating to physical safety and economic and social security.
Social needs come next and they include the need for love and the need to belong. Esteem needs include the need for self-esteem, the need for recognition by society and the need to be held in esteem by others. Self-actualization needs include the need for selfdevelopment and the need to attain complete fruition of ones capabilities and endowments. The actions of individuals are guided by their need structure and need level.

Influence of Sociology and Anthropology Sociology and anthropology lent further dimensions to the subject of buyer behavior. According to scholars in these fields, group pressure is the motive force behind buying. Sociologists and anthropologists have tried to establish a logical connection between buyer behavior and the social environment of the buyer. As a result, several new concepts like social stratification, reference groups, role-orientation, opinion leadership, etc., have come to be used for giving causal explanations of buyers behavior.

I NDUSTRIAL M ARKET / ORGANIZATIONAL MARKET

Organizational /Industrial Market consist of business firms (manufacturer, Wholesalers and Retailers), governments (central, State and Local)and organization (Universities and Hospitals). Many purchase decision in the industrial markets are made by groups. This members of the buying centers, like the members of the family, tend to assume certain roles.

The classification based on this concept is given below,

Users Those in the organization who works with the product purchased.

Buyers Individuals, often called purchasing agents with the formal responsibility of placing orders.
Influencers Those who can affect the decision process by assisting in evaluating alternative products. Decider Managers with the authority to make the final choice.

Gate Keepers organizational members who controls the flow of information into the buying centers.

In organization buying behaviour, the personal needs and goals play a secondary role. Here, the formal organization structure influences the buying process. The process of organizational buying behaviour is complex. It is carried out consciously and in a more formalized manner. The organizational/industrial buying involves the following steps

1.
2. 3.

Determination of needs.
Determination of quality. Determination of quantity.

4.
5. 6.

Quality description.
Selection of suppliers. Analyzing quotation.

7.
8. 9.

Order Placing.
Order Processing. Information feedback etc.

C HARACTERISTICS OF ORGANIZATIONAL MARKETS

Greater sales volume. Smaller number of buyers. Large volume of purchase. Inelasticity demand.

Direct buying (Personal Buying).

Contract Buying by specification, standardization etc. Negotiation Systems. Make or buy or Lease Decisions. Derived Demand.

C HARACTERISTICS

OF CONSUMER MARKETS

Every purchase in the consumer market is promoted by a motive or combination of motives. Hence it is very necessary for the salesman to know, what motive of purchaser prompt the buyers in the consumer market to buy. In the consumer market, the behaviour of every human being is different because difference in heredity, education, environment, training and experience.
In the consumer market, all customers are not one and the same. There are different type of customers and each and every customers have different needs. In the consumer market, intensity of human being always change. In the consumer market, buying motives is not one and the same for all the persons (buyers). The profit margin in the consumer market is low mainly due to high competition exists in the market.