Module:02

Consumer Behavior
Analysis
 Meaning and Characteristics

• Consumer Behavior:
–Is the study of how individuals, groups & organisations

• Study consumer behavior to answer:

“How do consumers respond to marketing efforts the com
 Importance of studying CB
 Marketers expect that by understanding they
will be able to determine
 which products are needed in the marketplace &
which are obsolete
 How best to present the goods to the consumers.
 The study of consumer behaviour assumes
that the consumers are actors in the
marketplace.
 The consumers play various roles in the
marketplace.
 Starting from the information provider,from the
 Growing Consumer Markets

1.New retail line-ups

• “Price-centric”
• Lifestyle
• “Occasion-centric”

1.Outdoor living market.

1.Consumer electronics.

1.Enhanced experience businesses.

 Growing Consumer Markets

1.Anti-aging products and services.

1.Health as a national hobby.

1.High-end sports apparel and

equipment.

1.Safe packaging, pure contents, and

“green” concerns.
Characteristics Affecting
Consumer Behavior
Culture
Social
Personal
Psychological
Buyer
 Factors Affecting Consumer Behavior:
ulture
Most basic cause of a person's wants and behavior.
Set of basic values, perceptions, wants & behaviors learned by
a member of society from family & other important institutions.

Subculture Social Class

• Groups of people with shared value systems
Relatively
based
homogeneous
on commondivisions
life experience
within
• North Indian Consumers • Occupation
• African American Consumers • Income
• Asian American Consumers • Education
• Mature Consumers • Wealth
Factors Affecting Consumer Behavior:
Social
Groups
•Membership
•Reference

Family
•Husband, wife, kids Social Factors
•Influencer, buyer, user

Roles and Status

 Factors Affecting Consumer Behavior:
ocial
Groups
Two or more people who interact to accomplish individual or mutual goals.
Membership Groups: Groups that have a direct influence & to which a
person belongs
Reference groups : serve as direct or indirect points of comparison or
reference in forming a person's attitude or behavior.
Opinion Leader: person within a reference group who, because of special
skills, knowledge, personality exerts social influence on others.

Family Roles & Status

• Family members can strongly influence
The
buyer
person's
behavior
position in each group is de
• Husband-wife involvement varies widely
People
by product
always category
choose product
& by stages
appropria
in th
• Children also have strong influence
Factors Affecting Consumer Behavior:
Personal
Personal Influences

Age and Family Life Cycle

Occupation
Stage

Economic Situation Personality & Self-Concept

Lifestyle Identification

Activities Opinions

Interests
 Factors Affecting Consumer Behavior:
Personal
l Age & Life-Cycle stages
l Age influence the goods & service the people buy over their
lifetime
l Family life cycle stages like youth(<18), Getting Started(18-
35), builders(35-50),Accumulators(50-60), preservers(>60)
l New categories evloved now such as unmarried couples,
same-sex couples, single parents, extended parents & so on
l Occupation
l Executives buy more formal suits
l Economic Situation
l A person's economic situation will affect product choice.
 Factors Affecting Consumer Behavior:
Personal

l Personality & Self -Concept

l Personality refers to the unique psychological characteristics that lead to
relatively consistent & lasting response to one's own environment
l Described in terms of traits such as self-confidence, dominance, sociability,
adaptability & so on.
l Consumer choose brand that match their personalities
l Consumer choose & use brands that is consistent with their actual self
concept( how we view ourselves) or others self concept( how we think others
see us).
l Consumers have multiple aspects of self that may be evoked differently in
different situations or around different types of people.
 Factors Affecting Consumer Behavior:
Personal

l Life style & Values

l People from the same subculture, social class & occupation lead different
lifestyles.
l A person's pattern of living as expressed in his or her activities (work,
hobbies, shopping, sports, social events), interest (food, fashion, family,
recreation) & opinions(about themselves, social issues, business).
l Capture's person's acting & interacting in the world.
l Lifestyle are shaped partly by whether consumers are money constrained or
time constrained.
l Consumer decision are influenced by core values, the belief systems that
underlie attitudes & behaviour
Factors Affecting Consumer Behavior:
Psychological

Motivation

Beliefs and Psychological

Factors Perception
Attitudes

Learning
 Factors Affecting Consumer Behavior:
Psychological

Psychological Factors
Motivation
• We all have many needs at any given time.

• Some are biogenic(arise from physiological states of tension such as

hunger, thirst or discomfort)

• Some are psychogenic(arise from psychological states of tension such

as recognition, esteem or belonging)

• A motive is a need that is sufficiently pressing to direct the person to

seek satisfaction.

• Three best known theories of motivation are FREUD’S THEORY,

MASLOW’S THEORY & HERZBERG’S THEORY 15
Maslow’s Hierarchy of Needs

Self
Actualization
(Self-development)

Esteem Needs
(self-esteem, status)
Social Needs
(sense of belonging, love)

Safety Needs
(security, protection)

Physiological Needs
(hunger, thirst)
 MOTIVATION

• Freud‘s Theory of Motivation

– A sales theory which surpasses that consumers choose
whether or not to purchase a product due to unconscious
desires and motivators, and that the qualities of the product,
such as touch, taste or smell, remind them of past events.
• Herzberg’s Two-Factor Theory of Motivation
– Frederick Herzberg, a behavioral scientist proposed a two-factor theory or
the motivator-hygiene theory.
– According to Herzberg, there are some job factors that result in
satisfaction while there are other job factors that prevent dissatisfaction.
– According to Herzberg, the opposite of “Satisfaction” is “No satisfaction”
and the opposite of “Dissatisfaction” is “No Dissatisfaction”.
Characteristics Affecting Consumer Behavior
Psychological Factors

• Perception is the process by which people select, organize, and

interpret information to form a meaningful picture of the world
from three perceptual processes:
• Selective attention
• Selective distortion
• Selective retention

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Characteristics Affecting Consumer Behavior
Psychological Factors

• Selective attention is the tendency for people to screen out

most of the information to which they are exposed.
• Selective distortion is the tendency for people to interpret
information in a way that will support what they already
believe.
• Selective retention is the tendency to remember good points
made about a brand they favor and to forget good points
about competing brands.

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Characteristics Affecting Consumer Behavior
Psychological Factors

• Learning is the changes in an individual’s behavior arising from

experience and occurs through interplay of:
• Drives
• Stimuli
• Cues
• Responses
• Reinforcement

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Characteristics Affecting Consumer Behavior
Psychological Factors

Beliefs and Attitudes

• Belief is a descriptive thought that a person has about something
based on:
• Knowledge
• Opinion
• Faith

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Characteristics Affecting Consumer Behavior
Psychological Factors

Beliefs and Attitudes

Attitudes describe a person’s relatively consistent evaluations,
feelings, and tendencies toward an object or idea.

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Types of Buying Decisions

High Low
Involvement Involvement
Significant Complex Variety-
differences Buying Seeking
between
brands Behavior Behavior
Few Dissonance- Habitual
differences
between Reducing Buying Buying
brands Behavior Behavior
 Types of Buying Decisions

 Complex Buying Behaviour:

 Consumers are highly involved when the
product is expensive, bought infrequently,
risky and highly self-expressive.
 This buyer will pass through a learning
process characterized by first developing
beliefs about the product, then attitudes, and
then making a thoughtful purchase choice.
 Dissonance-Reducing Buying Behaviour:
 The buyer will shop around to learn what is,
available but will buy fairly quickly because
brand differences are not pronounced. The
 Types of Buying Decisions

 Habitual Buying Behaviour:

 consumers have low involvement with most
low-cost, frequently purchased products.
 Consumer behaviour in these cases does not
pass through the normal
belief/attitude/behaviour sequence.
 Consumers do not search extensively for
information about the brands, evaluate their
characteristics, and make a weighty decision
on which brand to buy.
 Variety-Seeking Buying Behaviour:
 Here consumers are often observed to do a
The Buyer Decision Process

Need Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Postpurchase Behavior
 DECISION MAKING PROCESSES

EXTERNAL INFLUENCES Experiences and Acquisitions SITUATIONS

Culture
Problem
Subculture
Recognition
Demographics
Social Status
Information
Reference Groups
Search
Family
Marketing Activities
SELF-CONCEPT Alternative Evaluation
Desires
and and Selection
LIFESTYLE Needs
INTERNAL INFLUENCES Outlet Selection
Perception and Purchases
Learning
Memory Post-purchase
Motives Processes
Personality
SITUATIONS
Emotions Experiences and Acquisitions
Attitudes
The Buyer Decision Process
Step 1. Need Recognition

Need Recognition
Difference between an actual state and a desired state

Internal Stimuli External Stimuli

• Hunger • TV advertising

• Thirst • Magazine ad
• A person’s normal • Radio slogan
needs
•Stimuli in the
environment
The Buyer Decision Process
Step 2. Information Search

Personal Sources •Family, friends, neighbors

•Most influential source of
information

Commercial Sources •Advertising, salespeople

•Receives most information
from these sources

Public Sources •Mass Media

•Consumer-rating groups

•Handling the product

Experiential Sources •Examining the product
•Using the product
The Buyer Decision Process
Step 3. Evaluation of Alternatives
Product Attributes
Evaluation of Quality, Price, & Features

Degree of Importance
Which attributes matter most to me?

Brand Beliefs
What do I believe about each available brand?

Total Product Satisfaction

Based on what I’m looking for, how satisfied
would I be with each product?

Evaluation Procedures
Choosing a product (and brand) based on one
or more attributes.
The Buyer Decision Process
Step 4. Purchase Decision

Purchase Intention
Desire to buy the most preferred brand

Attitudes Unexpected
of others situational
factors

Purchase Decision
The Buyer Decision Process
Step 5. Postpurchase Behavior

Consumer’s Expectations of
Product’s Performance

Product’s Perceived
Performance

Satisfied Dissatisfied
Customer! Customer

Cognitive Dissonance
 Buying Roles
1. Initiator:
1. The person who identifies a need and first
suggests the idea of buying a particular
product or service.
2. Influencer:
1. The person(s) who influences the buyer in
making his final choice of the product.
3. Decider:
1. The person who decides on the final
choice: what is to be bought, when, from
where and how.
4. Buyer:
 Buying motives

Those influences or considerations which provide

the impulse to buy, induce action & determine
choice in purchase of goods or services.

In simple words it is the reason why a consumer

purchases a good
 Different buying motives

Primary Related to basic needs of human

being which motivate the buyer to
take a purchase decision.

• Hunger
• Thirst
• Sleep
• Shelter
• Entertainment
 Different buying motives

Secondary Secondary buying motives are

those which are created by the
atmosphere in which a man lives.

• Bargain
• Cleanliness
• Economical
• Fashion
• curiosity
Buying Motives
 Product Buying Motives

 Product buying motives refer to those

influences and reasons, which prompt (i.e.
induce) a buyer to choose a particular
product in preference to other products.
 In short, they refer to all those
characteristics of a product, which induce
a buyer to buy it in preference to other
products. Such as the design, shape,
dimension, size, colour, package,
performance, price etc. of the product or
the psychological attraction of the product
(i.e. the enhancement of the social prestige
 Product Buying Motives

 Emotional product buying motives

 When a buyer decides to purchase a product without thinking
over the matter logically and carefully. i.e Based on feelings &
Not based on judgment
 Emotional product buying motives include the following:
 Love and Affection
 Imitation
 Curiosity
 Fashion
 Pride and Prestige
 Romance
• Desire for distinctiveness or individuality
• Ambition
 Product Buying Motives

 Rational Product Buying Motives:

 Buy a certain thing after careful consideration (i.e.
after thinking over the matter consciously and
logically),
 Based on sound judgment & based on proper testing,
observing & comparing.
 Rational product buying motives include the
following:
 Economy
 Utility
 Comfort & Convenience
 Durability
 Security
 Maintenance and many more
 Patronage Buying Motives

 Patronage buying motives refer to those

considerations or reasons, which prompt a
buyer to buy the product wanted by him from a
particular shop in preference to other shops.
 Patronage buying motives also may be sub-
divided into two groups viz.
 a) Emotional patronage buying motives and
 b) Rational patronage buying motives
 Patronage Buying Motives

 Emotional Patronage Buying Motives:

 A buyer patronises a shop without applying
his mind or without reasoning,
 Emotional patronage buying motives include
the following:
• Appearance of the shop
• Display of goods in the shop
• Recommendation of others
• Prestige
• Habit
 Patronage Buying Motives

 Rational Patronage Buying Motives:

 When a buyer patronises a shop after careful
consideration (i.e. after much logical
reasoning and careful thinking)
 Rational patronage buying motives include the
following:
 Convenience
• Low price charged by the shop
• Credit facilities offered
• Services offered
• Efficiency of salesmen
• Wide choice
Stages in the Adoption Process

Awareness

Interest

Evaluation

Trial

Adoption
Adoption of Innovations
Percentage of Adopters

Early Majority Late Majority

Innovators

Early
34% 34% Laggards
Adopters

13.5% 16%
2.5% Time of Adoption
Early Late
SIMPLE MODEL FOR CONSUMER BEHAVIOUR

Motives
Attitudes

Needs Consumer
Purchase
Business

Decision Learning

Family
Perception

Personality

Economic
Model of Consumer Behavior
Product Marketing and Economic
Other Stimuli
Price Technological
Place Political
Promotion Cultural

Buyer’s Characteristics
Decision Buyer’s Black Box Affecting
Process Consumer
Behavior

Product Choice Purchase

Buyer’s Response Timing
Brand Choice
Purchase
Dealer Choice Amount
l A Simplified Model of Consumer Decision
Making