CHAPTER - III

CONSUMER BEHAVIOUR AN OVERVIEW

Consumer behaviour is the study of how individuals make decisions to spend

the available resources on consumption-related items. It includes the study of what they
buy, why they buy it, when they buy it, where they buy it, how often they buy it and how
often they use it.

Consumer

Consumer is used to represent situations where a product can be consumed and

customer is used to deal with situation where the product cant be directly consumed.
Thus, we are consumers of food and drugs but customer incase of garments, consumer
durables, cars, etc.

Behaviour

Behaviour refers the way of acting or functioning. Behaviour is the interaction

with the ambient surrounding environment, inherent in living creatures and mediated by
the external (Motor) and inner (physic) activeness. Behiviour is generally mediated by
needs, motives, personality, perception, learning, involvement, attitude, communication,
persuasion, culture, reference groups, family and social class.

Consumer Behaviour

Consumer behaviour may be defined as action of consumers in the market place

and underlying motives for those actions. Marketers expect that by understanding what
causes consumers to buy particular goods and services, they will be able to determine
which products are needed in the marketplace, which are obsolete, and how best to present
those goods to the consumer. Its the behaviour that consumers display in searching for,
purchasing, using, evaluating and disposing of products, services and ideas that they
expect, will satisfy their needs.
Consumer Behaviour versus Consumption Behaviour

Consumer behaviour is the case of micro behaviour whereas Consumption

behaviour is micro behaviour. In other words, consumer behaviour is to do with
individual person while consumption behaviour with the mass or aggregate of such
individuals. Consumer behaviour, as a study, focuses on the decision process of the
individual consumer or consuming unit. It encompasses all the efforts; explains an actors
acts of choice either at a given time or over a period of time. In contrast, the consumption
behaviour, as a study, is to do with the explanation of the behaviour of the aggregates of
consumers or the consuming units, either at a given point of time or over a period of time.

Buyer Behaviour

Buyer behaviour refers to both the end users and intermediate users. End users are
the ultimate users or the consumers in the true sense. Intermediate users are the industrials
who do not consume the goods and services but add further value before they are used by
the final users.

Study of Consumer Behaviour

The study of consumer behaviour is the study of how individuals make decisions
to spend their available resources (time, money, effort) on consumption-related items. It
includes the study of what they buy, why they buy, when they buy, where they buy, how
they buy it, and how often they use it. It is important for the marketers and future
marketers to recognize why and how individuals make their consumption decisions in
order to make better strategic marketing decisions. If marketers understand consumer
behaviour, they can predict the reactions of the consumers and can shape their marketing
strategies accordingly.

Types of Consumer Behaviour

Consumer decision making varies with the type of buying decision. The decisions
to buy toothpaste, a tennis racket, a personal computer and a new car are all very different.
Henry Assael (1987, p.87) distinguished four types of consumer buying behaviour based

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on the degree of buyer involvement and the degree of differences among brands. They are
as follows: i).Complex Buying behaviour ii).Dissonance reducing Buying behaviour iii).
Variety-seeking Buying behaviour and iv).Habitual Buying behavior.

Complex Buying Behaviour

Consumers engage in complex buying behaviour when they are highly involved in
a purchase and aware of significant differences among brands. This is usually the case
when the product is expensive, bought infrequently, risky and highly self expressive.
Typically the consumer does not know much about the product category and has much to
learn. Consumer Behaviour of small car owners is of this type.

Complex Buying Behaviour Process

Complex Buying Behaviour involves three step processes. First, the buyer
develops beliefs about the product. Second, he or she develops attitudes about the product.
Third, he or she makes a thoughtful purchase choice. The marketer of a high involvement
product must understand high involvement consumers information gathering and
evaluation behaviour. The marketer needs to develop strategies that assist the buyer in
learning about the products attributes and their relative important and should differentiate
the brands features.

Dissonance-reducing Buying Behaviour

In this case the buyer may respond primarily to a good price or to purchase at
convenience. For example, carpet buying is a highly involvement decision because it is
expensive and self-expressive. After the purchase, the consumer might experience
dissonance that arises from noticing certain disquieting features of the carpet or hearing
favourable things about other carpets. To counter such dissonance, the marketers after sale
communication should provide evidence and support to help consumers feel good after
their brand choice.
Variety-seeking Buying Behaviour

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 Some buying situations are characterized by low consumer involvement but
significant brand differences. Here consumers are often observed to do a lot of brand
switching. For example, the consumer chooses a particular brand of cookies without much
evaluation and evaluates during consumption. But next time, the consumer may reach for
another brand out of boredom or a wish to experiment. Brand switching occurs for the
sake of variety rather than out of satisfaction.

Habitual Buying Behaviour

Under this situation, a marketer should repeat advertisement of such product to

create brand familiarity rather than brand conviction. Consumers do not form a strong
attitude towards a brand but select it because it is familiar. After the purchase, consumers
may not even evaluate the choice because they are not highly involved with the product.
So the buying process is brand beliefs formed by passive learning, followed by purchase
behaviour which may be followed by evaluation. Therefore, marketers of such product
should use instrument like price and sales promotions to stimulate product trial as the
buyers are not highly involved or committed to any brand. They should link the product to
some involving issues. For example, toothpaste avoiding cavities and secondly by linking
the product to some involving situation.

Need for the Study of Consumer Behaviour

A number of reasons make the study of consumer behaviour relevant for effective
marketing management. These are as follows:

1. Consumer of the past reacted to price levels as if price and quality had positive
relation. Today, consumers seek value for money, less price but with superior
features.

2. Consumer preferences are changing and becoming highly diversified.

3. Consumer research has vividly pointed out that consumers dislike using identical
products and prefer differentiated products to reflect their special needs,
personalities, and life styles.

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4. Meeting of special needs of customers requires market segmentation.

5. Rapid introduction of new products with technological advancement has made the
job of studying consumer behaviour more imperative.

6. Consumer behaviour can be used to sell products that might not sell easily because
some other product has been satisfying the customer, even if the new product
saves life much quicker than the old product.

7. Implementing the Marketing Concept calls for studying the consumer behaviour.
The shift in the age from selling age to marketing age meant that customers needs
be given priority over the hard- sell tactics. It was realized that consumer would
not buy any thing sold. The consumer would buy those products which satisfy
needs and wants. Thus, identification of target market before production becomes
essential to deliver the desired customer satisfaction and delight.

8. Study of consumer behaviour has shown fallacies more apparently than ever
before. Consumers are loyal to products or organizations. Consumers are not
inherently disloyal and they become so only if utterly neglected or conditioned to
do so. Loyalty is not dead. If market becomes flooded with more and more
products, customer expects their favoured product/ organization should produce
them and deliver the same. Thus, companies who place major emphasis on
attracting new customers and place minor emphasis on retaining existing customer
should not be surprised to see that the customer has left their fold.

9. Customers do not patronize the best available product. They patronize the best
available offer. Thus, if Mercedes Benz and the Maruti Esteem are the two models
that are under customer choice set, then the firm which can promise better
payment terms and features would win the customer.

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 10. Marketer cannot sell the product to the customer against his will. The marketing
mix (product, price, place, promotion) cannot create internal desire of the prospect
to buy. The customer has to feel the need and then marketer can provide various
satisfiers. A good marketer, therefore, studies the drives and needs of customer and
then tries best to satisfy them.

Models of Consumer Behaviour

Consumers do not approach each buying decision with conveniently blank minds
and then rationally considered all the options. Their decision making is an extended,
complex, and often confused process. Typically, the consumer behaviour is the result of
the influence of a variety of factors and the interaction between them. There are various
models of consumer behaviour. They are,
- Economic Model
- Psychological Model
- Learning Model / S-R Model
- Sociological Model
- Howard Sheth Model
- Nicosia Model
- Webster and Wind Model
- Engel Kollat Blackwell Model

Economic Model
Under economics, it is assumed that man is a rational human being, who will
evaluate all the alternatives in terms of cost and value received and select that product
which gives in maximum satisfaction. Consumers are assumed to follow the principle of
maximum utility based on the law of diminishing marginal utility. It is assumed that with
limited purchasing power and a set of needs and tastes, a consumer will allocate his
expenditure over different products at given prices so as to maximum utility.

Economic model of consumer behaviour is one-dimensional. This means that

buying decisions of a person are governed by the concept of utility. Being the rational

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man he will make his purchase decisions with the intention of maximizing the utility /
benefits.

Psychological Model

Psychologists have been engaged in finding out the answers for the questions
relating to what motivates people and what is the type of behaviour entered in to by the
person. The work of A.H.Maslow is an attempt in explaining this. Maslow is of the
opinion that there is a hierarchy of human needs. The behaviour of an individual at a
particular moment is usually determined by his strongest need at that time. This means
that needs have a certain priority. Human beings give first preference for satisfying the
basic needs and then seek out ways to satisfy their next higher level of needs.

Learning Model

Learning is a very important concept in the study of human behaviour. Learning is

the process of acquiring the ability to respond adequately to a situation which may or may
not have been previously encountered, the favourable modification of response tendencies
consequent upon previous experience, particularly the building of a new series of
complexity coordinated motor response, the fixation of items in memory so that they can
be recalled or organized, the process acquiring insight into a situation.

Pavlovian Learning Model

According to this model, behaviour is learned by repetitive associations between a

stimulus and response. This model is based on an experiment performed on a dog by a
Russian physiologist, Ivan Pavlov. This experiment is based on how a dog responds to
various conditional stimulus and unconditional stimulus. Knowing the learning process is
very important for a marketing manager. Marketers must understand the learning process
of a buyer and try to buildup brand loyalty, brand images as well as stores patronage.

Sociological Model

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 According to this model the individual buyers is a part of the institution called
society. Since he is living in a society, he gets influenced by it and in turn also influences
it in its path of development. He is playing many roles as a part of various formal and
informal associations or organizations as a member of a professional forum and as an
active member of an informal cultural organization. Such interactions leave some
impressions on him and may play a role in influencing his buying behaviour.

Howard Sheth Model

This model basically serves two purposes:

i. It indicates how complex the whole question of consumer behaviour really is.

ii. It provides the frame work for including various concepts like learning, perception,
attitudes etc. which play a role in influencing consumer behaviour.

In the Howard Sheth theory, the most significant stimulus affecting the buying
behaviour is the information cues about the characteristic of the product. These cues may
be significative if it comes to the buyer from the product itself when he is involved in a
shopping activity. A similar set of cues, which are symbolic in nature, may also act as
information sources. Both these significative and symbolic cues represent the firms
marketing efforts. The product or brand characteristics acting as information cues are
quality, price, distinctiveness, service and availability. There are in personal sources like
mass media communication and advertising, over which the firm has no control. However,
the information sources also include sales and service personnel who can add and help the
marketing efforts of the firm. The third source social information cues which could affect
buying behaviour towards the product are brand and these include family, friends or other
members of the groups with which the buyer comes into contact or to which he aspires to
be in.

Nicosia Model

The Nicosia model, developed by Francesco Nicosia, tries to explain buyer

behaviour establishing a link between the organization and its consumer. The model

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suggests that messages from the firm first influences the pre disposition of the consumer
towards the product or service. Based on the situation, the consumer will have a certain
attitude towards the product. This may result in a search for the product or evaluation of
the product attributes by the consumer. If the above steps satisfy the consumer, it may
result in a positive response, with a decision to buy product. Otherwise the reverse may
occur.

Webster and Wind Model

This is a complex model developed by F.E.Webster and Y.Wind, as an attempt to

explain the multifaceted nature of organizational buying behaviour. This model refers to
the environmental, organizational, interpersonal and individual buying determinants
which influences the organizational buyer. These determinants influence both the
individual and group decision making processes and consequently the final buying
decisions.

Engel Kollat Blackwell Model

This model talks of consumer behaviour as a decision making process in the form
of five steps which occur over a period of time. Apart from these basic core steps, the
model also includes a number of other related variables grouped into five categories

1. Information input

2. Information processing
3. Product brand evaluation

4. General motivating influences

5. Internationalized environmental influences

The above mentioned Engel Kollat Blackwell model has taken into
consideration a large number of variables which influences the consumer. The model has
also emphasized on the conscious decision making process adopted by a consumer. The

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model is easy to understand and is flexible, that is, it recognizes that a consumer may not
go through all the steps always. This is because, in case of repeat purchases, the consumer
may bypass some of the steps.

Buying Decision Process:

The buying decision process consists of

-Recognition of an unsatisfied need
-Identification of alternatives
-Evaluation of alternatives
-Purchase decision
-Post purchase behaviour

Recognition of an unsatisfied need: When a person has an unsatisfied need, the buying
process begins to satisfy the needs. Generally the unsatisfied need leads to tension. The
nature of the want indicates the speed with which a person moves to fulfil the unsatisfied
want, which is of high pressing need. On the basis of need and its urgency, forms the
order of priority. Marketers should furnish the information of selling points.

Identification of Alternatives: Different alternatives are available in the market .The

consumer must know the brand of the product, which gives maximum satisfaction. And
the person has to search out for relevant information of the product brand, location etc.
Consumer information sources fall in to four groups:

Personal sources-family, friends, neighbours, acquaintances.

Commercial sources-advertising, salespersons, dealers, packaging, displays.

Public sources-mass media, consumer rating organizations.

Experiential sources-handling, examining, using the product.

Evaluation of Alternatives: This is a critical stage, especially with regard to the costly
items. Consumers have different views on different alternatives. The attributes taste,

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colour, price, durability etc. have different preferences. All the details of the attributes are
provided by the marketers. On the basis of attribute preferences consumers reduce the
number of alternatives. This process must be understood by the marketers.

Purchase Decision: By considering the likes and dislikes of alternatives, one is about take
a decision as to buy or not to buy. One will consider with the reference to the product,
type, price, quality etc. A seller can facilitate such consumers to understand the product
through advertisement.

Post Purchase Behaviour: Feedback information is important as far as a seller is

concerned. A brand preference naturally repeats sales to a marketer. A satisfied buyer is a
silent advertisement. If the purchased brand fails to give the expected satisfaction to the
buyer, it affects the sales adversely. A satisfying experience of a buyer tends to strengthen
the brand preference.

Influences on Consumer Behaviour

Buyer decisions are strongly influenced by variables like cultural and social
factors, personal factors like demographics, self concept, lifestyles and personality.

Cultural Factors

Culture refers to a set of values, traditions or beliefs which guide the individuals
behaviour. In a way, culture is normative as it prescribes norms of acceptable human
behaviour. But in other words, culture refers to values, ideas, attitudes and other
meaningful symbols created by the people to shape human behaviour and the artifacts of
that behaviour transmitted from one generation to another. It has both the abstract and
material dimensions. The abstract dimensions affect consumer preferences. Today, values
are changing in Indian society largely due to influence of electronic media. Generational
change is today occurring because the younger consumers are acquiring new values and
information through the Internet and foreign television channels. On the other hand, as
individuals grow old, their values too change. A marketer needs to be aware of these
cultural and sub cultural influences on consumer preferences. These will affect his
brand, packaging, advertising, sales promotion and even distribution decisions.

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Social Factors

Man is a social creature. Hence his or her behaviour is greatly influenced by social
factors like reference group pressures. Reference group refers to peers, relatives,
neighbours and friends. Often, a product succeeds or fails in a market because of these
influences.

Opinion Leadership

Opinion Leadership is the process through which a person or group, called the
opinion leader, influences the actions, views and attitudes of others. These influences may
be oral and of an informal nature and is often supported by actions that imitate those of the
opinion leader. The informal flow of consumer related influence between two people is
called word of mouth communication. Word of mouth implies personal, face to face or
telephonic communication. Opinion leaders are often considered a source of highly
credible and valid information as they are supposed to be neutral about product
information. Therefore, the information that they transfer is considered valuable.

Demographic Factors

An individual customers age, sex, marital status, income, occupation and

geographic location also affect his or her consumption pattern. It is from this point of view
that the market is divided as child market, youth market, teenage market, adult market
and senior market. In fact, demography has traditionally helped the marketer evolve
positioning strategies. The people, having common demographic characteristics behave in
an identical manner and they have the same preferences.

Self Concept

The self image could be an individuals own perceived image and actual image
based on how others perceive the individual. There could, at times, be a conflict between
the two. All individuals try to bring about congruence between these two sets of their
images. Recent researches in consumer behaviour have concluded that a large number of
products like credit cards, automobiles, ready made garments, designer ware, cosmetics

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and perfumes are bought because of this variable. Often a demographic variable like
income is not important in purchase decisions for these products. These researches suggest
that a marketer needs to study the self concept of his target buyers and accordingly design
products; packaging, advertising strategies that will help reinforce this self concept. For
example, Citibank credit cards advertising campaign. Also, campaigns of shoppers stop
Dinesh suitings with Sunil Gavaskars Raymonds with well known celebrity
endorsements are examples for this concept. All these campaigns are aimed at customers
who have specific self concept of themselves.

Psychographic Variables

Psychographic factors also play an important role in the buyers decisions. These
factors refer to lifestyle or personality. According to psychologists, an individuals
behaviour is a function of these two factors.

Lifestyle

Lifestyle refers to the beliefs, attitudes, interest and opinions that an individual has
about him, his family and the world. Contemporary researches show that even though two
customers share common demographic characteristics, they may differ significantly in
terms of their lifestyles. Hence, a product or a brand positioned for customers like them
may not be bought by one of the customers because he/she may not perceive the
brand/product as suiting his/her lifestyle. Marketers direct their products and brands to the
affiliation, esteem and inner directed needs.

Personality

Personality refers to psychological characteristics of individuals that lead them to

relatively consistent and enduring responses to their environment. Personality provides a
useful understanding of consumer behaviour and products and can be designed to suit
different personality profiles. In personal selling, the sales person has to adopt his/her
selling style to the customers personality.

Tools to study Consumer Behaviour

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 It is important for the marketer to regularly study the behaviour of consumers. The
different tools available to study the behaviour of consumers are,

Surveys

This is the most common technique used in studying consumer behaviour. It

involves the use of questionnaires. Different scaling techniques like Likert and Thurstone
are used to measure consumer attitudes. The problem with survey methodology is that it
gives to the marketer only the conscious responses of the customer. The researcher has
applied this technique to study the consumer behaviour of small car owners.

Projective Techniques

To throw the customer off his/her conscious level and to get to know sub
conscious - level responses, projective techniques like word association, picture
association and Thematic Appreciation Test(TAT) have been used. Increasingly, the
marketer is turning to these qualitative techniques as they provide valuable information on
his/her product or brand, as perceived by the target customer group and also about the
customers lifestyle and self concept.

Focus Group Discussions

This is another qualitative technique used to assess how customers perceive the
product and use situations. It also provides the marketer with valuable information on the
target market.

Past Studies

Various attempts have been made to understand the behaviour of consumers by

various research scholars under different conditions and on various aspects. Some of the
research studies are enumerated here under.

Influence of Cultural Values

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 In 1949, James Duesenberry observed that all the activities in which consumers
engage are actually determined, and that nearly all purchases of goods are made either to
provide physical comfort or to implement the activities that make up the life of a culture.

Henry (pp121-127, 1976), concluded from his research that culture is a

determinant of certain aspects of consumer behaviour. The values or characteristics were
developed to study the cultural orientations within American society as they apply to
automobile ownership.

Kluckhohn and Strodbeck (1961) developed four basic cultural value dimensions
mans relation to nature; time dimension; personal activity and mans relation to others. In
addition to the dimensions of culture, the standard demographic variables of social class,
age of head of the family, family size, and annual family income were included. By
studying the ownership of generic categories of automobiles, Henry (pp.121-127, 1976)
concluded that culture is an underlying determinant of the type of car purchased. This
conclusion was based on the fact that statistical results of the study showed significant
correlation between individuals value dimensions and their ownership of a particular size
automobile.

Content Analysis

Content analysis has been used in consumer behaviour research as a method by

Kassarjian (pp.8-18, 1977) to determine the frequency of appearance of blacks and other
minorities in the mass media and the roles they appeared in. The purpose of the research
was to reveal how roles of blacks and other minorities, as depicted in magazine ads, had
changed as a function of time.

An inventory of cultural values that has been used in several consumer behaviour
studies is the Rokeach value survey (1973). Rokeach divided his inventory of cultural
values in to two distinct groups: means or instrumental values and ends or terminal
values.

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 Research by Brown (pp.23-25, 1963) on the European common market shows that
the average Frenchman uses almost twice as many cosmetics and beauty aids as his wife,
and that the Germans and the French eat more spaghetti than the Italians.

Group Influence on Individual Behaviour

Venkatesan (pp.384-387,1966) , in a study of conformity, had 144 college

students evaluated and selected the best suit from three identical suits that were described
to the groups of students as being of different quality and manufacture. When three of the
four students in a group were told by the research director to pick suit B, the fourth
student, who was not told to pick a certain suit, then picked suit B in most cases.
However, when the fourth student was pressured to pick suit B, his chances of conforming
decreased. This demonstrates that when group pressure becomes too great, a situation
known as reactance occurs. In other words, group pressure exceeds its range of influence
on individuals.

According to Venkatesan, the marketing implications of this study show that

individuals in a group accept information provided by the group on attributes that are
difficult to evaluate alone. However, any attempt to restrict the individuals choice beyond
a reasonable measure will cause the individual to reject the group norms and to opt for
independent behaviour.

In another study, Lewin (1968) designed an experiment to compare the effects of

lecture versus group discussion on food preparation and consumption. In this study, Lewin
showed that consumers were much more likely to modify their attitudes and behaviour by
group discussions than by lecture.

Influence of Status

The positions people occupy in society are established with reference to the needs
and values of that society. According to Kolasa (p.322, 1969) status is a position that has
been determined as being important in the interpersonal relationship of the group. In the
study of status and its marketing implications, researchers often see that some people buy

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expensive and conspicuous products to project the message of their wealth and implied
high status.

Social Influence

A study of Kelmans (pp.55-77, 1961) processes in relationship to their influence

on evaluations of a brand of coffee was conducted in 1975. According to the researchers,
evidence was provided to indicate that people use others product evaluations as a source
of information about products. It appears that, after observing other people evaluate a
product favourably, individuals will perceive the product more favourably for themselves
than they would have in the absence of this observation.

Influence of Age

Research indicates that elderly individuals and younger adults process information
differently (Phillips and Sternthal, pp.444 -457, 1977). As people get older, they undergo
a complex set of changes in their sources of information, their ability to learn, and their
susceptibility to social influence.

Influence of Ad Message

A classic study by Diamond (pp.376-386, 1968) of the effects of size, colour and
position of advertisements was published in 1968 and remains today as a general
guideline. In this study the effects on readership of various components of advertisements
were examined. Data for the study was based on an advertising firms estimates of
advertising readership by recognition of ads.

Price Consciousness

Price consciousness refers to the buyers sensitivity toward price differentials.

Consumers are characterized as price conscious to the degree they are unwilling to pay a
higher price of a product; if the price is greater than what is considered acceptable, the
consumer may refrain from buying.

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 It is generally believed that increased income tends to make consumers less price
conscious, especially for grocery products. Price does not usually rank as a primary
attribute that high income shoppers consider when making purchasing decisions. And
consumers who are very price conscious seem to be more valid perceivers of price than
non price conscious consumers (Monroe, pp.40-41, 1979).

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