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Rakesh Kumar Singh

Name : RAKESH KUMAR SINGH

Roll No. : 510910259

Learning Centre : Systems Domain (2779)

Subject : Consumer Behaviour

Assignment No. : Set – I (MK0002)

Date of Submission : 2010

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MBA Semester 3
MK0002 – Consumer Behaviour
Assignment Set- 1

Q.1 List out five different characteristics of consumer behaviour. Why is a study of consumer
behaviour important from the marketer’s viewpoint? (10 Marks)

Ans: Consumer behaviour involves the psychological processes that consumers go through in
recognizing needs, finding ways to solve these needs, making purchase decisions (e.g., whether or not to
purchase a product and, if so, which brand and where), interpret information, make plans, and
implement these plans (e.g., by engaging in comparison shopping or actually purchasing a product).

The consumer faces numerous sources of influence. Often, we take cultural influences for
granted, but they are significant. An American will usually not bargain with a store owner. This,
however, is a common practice in much of the World.

Physical factors also influence our behaviour. We are more likely to buy a soft drink when we
are thirsty, for example, and food manufacturers have found that it is more effective to advertise their
products on the radio in the late afternoon when people are getting hungry. A person’s self-image will
also tend to influence what he or she will buy—an upwardly mobile manager may buy a flashy car to
project an image of success.

Social factors also influence what the consumers buy—often, consumers seek to imitate others
whom they admire, and may buy the same brands. The social environment can include both the
mainstream culture (e.g., Americans are more likely to have corn flakes or ham and eggs for breakfast
than to have rice, which is preferred in many Asian countries) and a subculture (e.g., rap music often
appeals to a segment within the population that seeks to distinguish itself from the mainstream
population). Thus, sneaker manufacturers are eager to have their products worn by admired athletes.

Finally, consumer behaviour is influenced by learning—you try a hamburger and learn that it
satisfies your hunger and tastes good, and the next time you are hungry, you may consider another
hamburger.

Basic objective of the studying consumer behaviour is that the firm needs to know who buys
their product. How they buy? When and where they buy? Why they buy? How they respond to
marketing stimuli. Because they study consumer behaviour what is Consumer Behaviour about? How,
why, where and when consumers make purchase decisions? Considers who influences the decisions?
What is Consumer Behaviour about? All these are important questions, which are to be known to the
companies so that they can design, and implement marketing strategies to satisfy the customers.

Consumers determine the sales and profits of a firm by their purchase decisions, thus the
economic viability of the firm. What is Disposable income and what is Discretionary income what is the
stage of family life cycle stage because these all these factors influence the consumer behaviours which
are very important to the marketers.

Consumer behaviour is the procedure throughout the final purchaser makes buy assessments.
This can be defined as Consumer Behaviour Defined as of the processes involved when individuals or
groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and
desires (Solomon, 1996). Those actions directly involved in obtaining, consuming and disposing of
products and services, including the decision processes that precede and follow those actions.
Consumer behaviour examines mental and emotional processes in addition to the physical activities.
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Q.2 Explain with suitable examples of each, how culture and reference groups can influence
consumer behaviour in the Indian context. (10 Marks)

Ans: Culture is the broadest environmental factor affecting consumer behaviour. According to
Henry Assael, “Culture refers to the norms, beliefs and customs that are learned from society and lead
to common patterns of behaviour.” Culture generally refers to patterns of human activity and the
symbolic structures that give such activity significant importance. Different definitions of "culture"
reflect different theoretical bases for understanding, or criteria for evaluating human activity. Culture is
manifested in music, literature, painting and sculpture, theatre and film. Culture refers not only to
consumption goods, but to the general processes which produce such goods and give them meaning,
and to the social relationships and practices in which such objects and processes become embedded.
Culture thus includes technology, art, science, as well as moral systems.

Culture has been called "the way of life for an entire society." As such, it includes codes of
manners, dress, language, religion, rituals, and norms of behaviour such as law and morality, and
systems of belief. Various definitions of culture reflect differing theories for understanding, or criteria
for evaluating, human activity. Culture has a significant influence on consumer behaviour and in this
unit we shall be discussing ‘Culture” from the perspective of consumer behaviour.

All individuals belong to a number of different groups and also aspire to belong to some other
groups. When a person is actively involved in a particular group, it generally functions as a reference
group. As the situation changes, the base of such behaviour may shift to an entirely different group,
which then becomes the new reference group. Although an individual may belong to a number of
groups, he/she normally uses only one group as the primary reference group in any given situation.

From a marketing perspective, reference groups are groups that serve as frames of reference for
individuals in their purchase or consumption decisions. This concept is very useful and relevant,
because there is no restriction on group size or membership, nor is there any requirement that the
individuals identify with a tangible group.

Reference groups that influence general or broadly defined values or behaviour are called
Normative Reference Groups. A child’s normative reference group is the immediate family, which plays
an important role in moulding the child’s general consumer values and behaviour. For example, the
child will learn which foods to select for good nutrition, which are the appropriate dresses for which
occasion, how and where to shop for which product, etc.

Reference groups that serve as benchmarks for specific, narrowly defined behaviour are called
Comparative Reference Groups. This could be a neighbouring family whose lifestyle appears to be
worthy of imitation in certain aspects, like the maintenance of their garden, choice of home
furnishings, types of vacations taken by them, etc.

Both normative and comparative reference groups have significant influence on every
individual. Normative groups influence the basic code of conduct, whereas the comparative groups
influence the specific consumer attitudes and behaviour. It is likely that these specific attitudes are
dependent on the basic values and behaviour patterns established in the person’s early development by
the normative reference groups.
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We can also add a third group of reference groups here – Indirect Reference groups, which
consist of those individuals or groups with whom a person does not have a direct face to face contact,
such as movie stars, sports heroes, political leaders, TV personalities, etc.

Q.3 Describe the steps in the consumer decision making process for each of the following cases –

a) A businessman considering the purchase of a laptop

b) A consumer considering the purchase of a soap that is advertised as having greater moisturizing
properties. (10 Marks)
Ans: a) A businessman considering the purchase of a laptop:

i) Problem Recognition:It is the state in which the consumer feels the need to buy
something to help him/her get back to the original state of physical or psychological comfort.
There are two types of stimuli which result in problem recognition:
a) Internal Stimulus: This is internal state of physical or psychological discomfort felt by
the consumer, for example, hunger, thirst, boredom etc.
b) External Stimulus: This is the outside influence like an advertisement of a product,
pr the fresh bread smell near a bakery which would stimulate the need in the mind
of the consumer.
ii) Pre-purchase search: This is the second step in the consumer decision process. Once the
problem has been recognised by the consumer, the next step is to search for relevant
information to solve the problem. This search is confined to a set of brands which can be
classified as follows:
a) Awareness Set: This is the set of brands, which the consumer is aware of.
b) Recalled Set: This is the set of brands, which the consumer can remember when
deciding.
c) Considered Set: This is the set of brands, which the consumer considers for the final
selection after discarding the other brands.

The pre-purchase information may be obtained from various sources like

advertisements, brochures, salesman, shop displays, company website etc. which is basically
given by the marketer. The consumer may also get the information from friends and
acquaintances, or from his/her own past experience.

iii) Evaluation if alternatives: After completing the search for relevant information, the
consumer has to evaluate the various alternatives. There are different methods by which a
consumer makes a choice.
a) Affective choice: This is based on the feelings of the consumer rather than the actual
benefits of the product or service. Buying of a dress, having a holiday etc will
normally involve the anticipated feelings of the product or service. The decisions
will be based mostly on such anticipated feelings rather than the attributes of the
product or service.
b) Cognitive choice: This is based on the rational comparison of various attributes of
the product or service. This requires the knowledge of all the relevant attributes at
the time the choice is made and also it involves the comparison of each attribute of
various brands. This requires a lot of time and effort and generally results in an
optimal decision. Such choice is more relevant in the case of more complex
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decision making, when the cost of purchase is high and the perceived risk of wrong
decision is also high.
c) Attitudinal choice: This involves the general attitudes, impressions and intuitions of
the consumer, rather than an informed choice. A variety of situations force a
consumer to go for this type of choice in preference to other types. Time pressure,
lack of relevant information etc would result in a consumer deciding on this
method. Many marketers follow a dual strategy for important and expensive
products and services by targeting both types of consumers viz. those going for
cognitive choice, as well as those going for attitudinal choice.

iv) Outlet Selection and purchase: In this step, the consumer has three alternatives for the
final purchase process.
a) Brand first and outlet later: It is assumed that the consumer will first decide on the
brand of the product which he wishes to purchase and then select the store from
which to purchase, based on various parameters like the lowest price, easy access,
good image, good service etc.
b) Outlet first and Brand later: Many customers may follow the alternative for certain
products. In such cases the consumer may be familiar with some store, which is
regularly patronised and hence he/she may visit this store for purchasing the
product.
c) Brand and outlet simultaneously: When the consumer has no particular preference for
either the brands or the stores, he/she may visit a couple of stores and evaluate the
brands in all these outlets on the spot. The final purchase may be taken on the
basis of the attributes of both brands and the stores.

b) A consumer considering the purchase of a soap that is advertised as having greater moisturizing
properties: The consumer decision making process in this case should be in the following steps:

i) Problem Recognition: The consumer will recognise a difference between his or her actual
state and what the ideal state should be. This may occur on account of external stimuli.

ii) Information search: Initially the information available with the consumer may be
consistent to other beliefs and attitudes held by him or her. While being involved in an information
seeking or search stage, the consumer will try to gather some more information from various sources.
The individual gets exposure of the stimuli which may catch his or her attention, be received and
retained in memory. This method of information is selective in nature and the consumer will accept the
information, which is in consonance with what is perceived by them.

iii) Alternative evaluation: Now the individual will evaluate the alternate brands. The
methods used for evaluating the various brands will depend on the consumer’s underlying goals,
motives and personality. The consumer also has certain predetermined beliefs about the various brands
in terms of the characteristics associated with the different brands.

iv) Choice: The consumer’s choice will depend on his or her intention and attitude and is
influenced by other people like friends, family members etc.

v) Outcome: The outcome may be either positive or negative.