Consumer Behavior

Mamta Mohan
Amity business School,
8/28/2008 10:48 AM

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 Definitions

■ Consumer Buying Behavior

– Buying behavior of individuals and
households that buy products for
personal consumption.

■ Consumer Market
– All individuals/households who buy
products for personal consumption.

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Customer vs. Consumer Behavior
■ Customer behavior: a broad term
that covers both individual consumers
who buy goods and services for their
own use and organizational buyers
who purchase business products

■ Consumer behavior: the process

through which the ultimate buyer
makes purchase decisions

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Based on concepts from
■ Psychology
■ Sociology
■ Anthropology
■ Marketing
■ Economics

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 Failure rates of new
products introduced
■ Out of 11000 new products
introduced by 77 companies, only
56% are present 5 years later.
■ Only 8% of new product concepts
offered by 112 leading companies
reached the market. Out of that
83% failed to meet marketing
objectives.
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Why do we need to study
Consumer Behaviour?

Because no longer can we

take the customer/consumer
for granted.

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 Why CB ?

Because people tend to repeat

behavior for which they have been
rewarded.

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Can Marketing be
standardized ?

No.

Because cross - cultural styles,

habits, tastes, prevents such
standardization.

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 Language Problems
■ “Please leave your values at the desk” - Paris
hotel
■ “Drop your trousers here for best results” -
Bangkok laundry
■ “The manager has personally passed all water
served here” - Acapulco restaurant
■ “Because of the impropriety of entertaining
guests of the opposite sex in the bedroom, it is
suggested that the lobby be used for the
purpose.” - Zurich hotel
■ Ladies are requested not to have children in the
bar.”- Norway bar
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“Come alive with Pepsi”

■ “Come alive out of the grave” -

Germany
■ “Pepsi brings your ancestors back
from the grave” - China

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Interpersonal Determinants of
Consumer Behavior
■ Why People Buy New Products

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All managers must become
astute analysts of consumer
motivation and behaviour

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 Model of
Consumer Behavior

■ Stimulus Response Model

– Marketing and other stimuli enter

the buyer’s “black box” and produce
certain choice/purchase responses.

– Marketers must figure out what is

inside of the buyer’s “black box” and
how stimuli are changed to
responses.
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 Marketing Stimuli

4 P s

P r o d u cP t r i c e P la c eP r o m o t

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 Buyer Behaviour

C o n s u m e r

4 P s M a r k eB t u i n y g e B r u y e B r u y e r
E n v i Cr o h n a m r D a e ec n ct t e i s r i Di so t en i c c Ps i s r i

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 Other Stimuli

M a r k e t in g
E n v ir o n m e n t

E c o n o mT ei c c h n o l o Pg io c l ai t li c a l C u lt u r a l

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 Buyer characteristics
■ Cultural
■ Social
■ Personal
■ Psychological

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Buyers Characteristics Affecting Consumer

Behavior

Key Factors ■ Culture

■ Subculture
■ Cultural
■ Social ■ Social Class
■ Personal
■ Psychological

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Buyers Characteristics Affecting Consumer
Behavior

Key Factors ■ Groups

– Membership
– Reference
■ Cultural ■ Aspirational groups
– Opinion leaders
■ Social ■ Buzz marketing
■ Personal ■ Family
– Children can influence
■ Psychological
■ Roles and Status

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■ Children and Teenagers in
Family Purchases
– Growing numbers are assuming
responsibility for family shopping
– They also influence what parents
buy
– They represent over 50 million
consumers in their own right

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Buyers Characteristics Affecting Consumer
Behavior

Key Factors ■ Age and life cycle

■ Occupation
■ Economic situation
■ Cultural ■ Lifestyle
– Activities, interests, and
■ Social opinions
– Lifestyle segmentation
■ Personal ■ Personality and self-
■ Psychological concept
– Brand personality

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 Characteristics Affecting
Consumer Behavior

Brand Personality Dimensions

■ Sincerity ■ Excitement
■ Ruggedness ■ Competence

■ Sophistication
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Buyers Characteristics Affecting Consumer
Behavior

Key Factors ■ Motivation

– Needs provide motives for
consumer behavior
– Motivation research
■ Cultural – Maslow’s hierarchy of needs
■ Perception
■ Social – Selective attention, selective
distortion, selective retention
■ Personal ■ Learning
– Drives, stimuli, cues,
■ Psychological responses and reinforcement
■ Beliefs and attitudes

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Personal Determinants of
Consumer Behavior

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■ Needs and Motives
– Need: an imbalance between a
consumer’s actual and desired states
– Motives: inner states that direct a
person toward the goal of satisfying a
felt need

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■ Maslow’s Hierarchy of Needs

Self-Actualization

Esteem Needs

Social Needs

Safety Needs

Physiological Needs

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 Physiological Needs
Products Vitamins, herbal supplements, medicines, food,
exercise equipment, fitness clubs
Marketing Pepcid antacid—”Just one and hearburn’s done”
themes Puffs facial tissues—”A nose in need deserves Puffs
indeed”
Ocean Spray cranberry juice—”Crave the wave”
Safety Needs
Products Cars and car accessories, burglar alarm systems,
retirement investments, insurance, smoke and carbon-
monoxide detectors, medicines
Marketing Fireman’s Fund insurance—“License to get on with it.”
themes American General Financial Group—“Live the life
you’ve imagined.”
Volvo—“Protect the body. Ignite the soul.”

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 Belongingness
Products Beauty aids, entertainment, clothing, cars
Marketing Old Navy—”Spring Break from coast to coast”
themes Washington Mutual banks—”More human interest”
TJ Maxx clothing store—”You should go”

Esteem Needs
Product Clothing, cars, jewelry, hobbies, beauty spa services
Marketing Lexus automobiles—The relentless pursuit of
themes perfection”
Van Cleef & Arpels—“The pleasure of perfection.”
Accutron watches—“Perhaps it’s worthy of your trust.”
Jenn-Air kitchen appliances—“The sign of a great
cook.”

Self-Actualization
Products Education, cultural events, sports, hobbies, luxury
goods, technology, travel 29

Marketing Gatorade—“Is it in you?”

■ Perceptions: the meaning that a
person attributes to incoming stimuli
gathered through the five senses –
sight, hearing, touch, taste, and smell.
■ Perceptual screens: the filtering
processes through which all inputs
must pass

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■ Attitudes
– A person’s enduring favorable or
unfavorable evaluations, emotional
feelings, or action tendencies toward
some object or idea
– Attitude components:
■ Cognitive
■ Affective

■ Behavioral

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■ Learning
– An immediate or expected change in
behavior as a result of experience.
– The learning process includes the
component of:
■ Drive
■ Cue

■ Response

■ Reinforcement

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■ Applying Learning Theory to
Marketing Decisions
– Shaping: process of applying a
series of rewards and reinforcements
to permit more complex behavior to
evolve over time

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■ Self-Concept
– A person’s multifaceted picture of
himself or herself, composed of
the:
■ Actual( real) self
■ ideal self-(image)

■ Expected self

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■ Applying Learning Theory to
Marketing Decisions
– Shaping: process of applying a
series of rewards and reinforcements
to permit more complex behavior to
evolve over time

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 The Consumer Decision Process
■ Consumers complete a step-by-step
Problem
process when making purchase
Opportunity decisions
Recognition
Search – High-involvement purchase decisions are
those with high levels of potential social or
economic consequences
Alternative
Evaluation
Purchase – Low-involvement decisions are routine
Decision purchases that pose little risk to the
consumer
Purchase
Act
Post-
purchase
Evaluation
Post - Purchase Behaviour
■ Satisfaction
■ Actions
■ Use and Disposal

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Buyer’s Decision Process

■ Problem Recognition
■ Information Search
■ Evaluation of Alternatives
■ Purchase Decision
■ Consumption
■ Postpurchase behaviour

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 Buying Behaviour

■ Complex
■ Dissonance - Reducing
■ Habitual
■ Variety seeking

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 Types f Buying-Decision
Behavior

Involvement Level
High Low

Significant Complex Variety-

Differences buying behavior
seeking buying
Brands behavior

Dissonance
Few reducing buying Habitual
buying behavior
Differences behavior

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– Integrated Model
of the Consumer
Decision Process

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 Buying Roles

■ Initiator
■ Influencer
■ Decider
■ Buyer
■ User

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 Buyer’s Decision
■ Product Choice
■ Brand Choice
■ Dealer Choice
■ Purchase Timing
■ Purchase Amount

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■ Problem or Opportunity
Recognition
– Consumer becomes aware of a
significant discrepancy between
the existing situation and the
desired situation
– Motivates the individual to achieve
the desired state of affairs

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■ Search
– Consumer gathers information related
to their attainment of the desired state
of affairs
– Identifies alternative means of problem
solution
– May cover internal or external sources
of information
– Brands that a consumer actually
considers buying before making a
purchase decision are known as the
evoked set
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 Evoked Set All
All
Model Brands
Brands

Known
Known Unknown
Unknown
Brands
Brands Brands
Brands
Evoked
Evoked
Acceptable
Acceptable Unacceptable
Unacceptable Overlooked
Overlooked
Set
Set Brands Brands Brands
Brands Brands Brands

Purchased
Purchased Rejected
Rejected Inert
Inert
Brand
Brand Brands
Brands Set
Set
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■ Evaluation of Alternatives
– Consumer evaluates the evoked set
– Difficult to completely separate the second
and third steps, since some evaluation
takes place as the search progresses
– Outcome of the evaluation stage is the
choice of a brand or product (or possibly a
decision to renew the search)
– Evaluative criteria: features that a
consumer considers in choosing among
alternatives

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■ Purchase Decision and
Purchase Act
– Consumer narrows the
alternatives down to one
– The purchase location is decided

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■ Postpurchase Evaluation
– After the purchase, consumers are
either satisfied or experience post-
purchase anxiety
– Cognitive dissonance: Post-
purchase anxiety that results from an
imbalance among an individual’s
knowledge, beliefs, and attitudes after
an action or decision is taken

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Buyer Decision Process for
New Products

■ Individual Differences in Innovativeness

– Consumers can be classified into five
adopter categories, each of which behaves
differently toward new products.
■ Product Characteristics and Adoption
– Five product characteristics influence the
adoption rate.

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Buyer Decision Process for
New Products

Product Characteristics
■ Relative Advantage ■ Complexity
■ Compatibility ■ Divisibility

■ Communicability

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