CONSUMER BEHAVIOUR

 INTRODUCTION
“The consumer, so it is said the king each is a voter who uses his money as
votes to get the things done that he wants done.”

Traditionally the word ‘customer’ was to define people whom the organisation
dealt with externally. Through the word “customer” is used as a single unit,
purchases could made both by individuals and groups of people involved in the
decision making process. The term customer refers to the purchase of a product
or service. They may or not be the ultimate consumer.

Marketers are being exposed to a new generation of customers. These new

generation customers have to be differentiated on the basis of individual
differences in consumer expectations, preference for choicer not very brand
loyal and even willing to try competing brands so as to obtain the perceived
higher value satisfaction. It is obvious that marketers have to do the exercise of
analysing consumer behaviour.

 MEANING
“consumer behaviour is the study of the processes involved when individuals or
group select. Purchase use or dispose of products, service, idea or experiences
to satisfy needs and desires.”

CONCEPT OF CONSUMER BEHAVIOUR

Consumer behaviour can be said to be the study of how individuals make

decision on how to spend their available resources on various consumption-
related items. This simple definition of consumer behaviour tells marketers to
resolve every activity around the ultimate consumer their behaviour by
specifically focusing on:

Who buys products or services?

How do they buy product or services?

Where do they buy them?

When do they buy them?

Why do they buy them?

How often do they use them?

These questions will help in understanding better what factors influence the
decision making process of the consumers. The decision making process
identifies the no. of people who are involved in this process and ascribes a role
to them – like the user, decider, influncer, and buyer.

It is believed that consumers make purchase decision on the basis of receipt of a

small number of selectively chosen pieces of information. Thus it will be very
important to understand what and how much information is required by the
customer to them to evaluate the goods and services offerings.

 ROLE OF CONSUMER BEHAVIOUR

Initiator:

This is a person who sows the seed in a customer’s mind to buy the product.this
person may be a part of the customer’s family liked a child. Spouse or parents.
Alternatively, the person may be a friend a relative, a collegue or even the sales
person.

Influencer:

This is a person within or outside the immediate family of the customer who
influence the decision process. The individual perceived as aninfluencer is also
perceived as an expert.

Decider:

This is the person who actually takes the decision. In a joint family ofen it is the
head of the family or the elders in the family who take a decision.

Buyer:

This is the person who actually buys the product. This could be the decider
himself or herself, or the initiator.

User:

This is the person who actually consumes the product. This could be the entire
family or just one person within the customer’s family.

 PSYCHOLOGICAL CHARACTERISTICS

Motivation, perception, learning, beliefs and attitudes, life style also influence
buyer behaviour. These are psychological factors.

MOTIVATION
Buyer’s needs are normally biogenic or physiological, and psychogenic or
psychological. When they are aroused to a sufficient level of intensity they
become motives, urging the buyer to seek satisfaction. Abraham maslow
explained the driving force of people’s need as consisting of a need hierarchy.
According to maslow, human beings first satisfy their lower order needs, or basic
and security needs before moving up the hieararchy to satisfy esteem and self
actualization . applying maslow’s theory, we fund that we can have different
groups of customers with different needs. The contribution of maslow’s theory is
that it helps the marketer segment his market and develop product marketing
strategies accordingly.

Herzberg’s two factor theory

Another behavioural scientist called frederick herzberg gave the “two factor
theory’ of human motivation . according to him, there satisfiers and dissatisfiers
in any work situation. Calling them as motivators or hygiene factors respectively.
Herzberg said that it is the motivatior that propels individual towards excellence.
Extending the theory to marketing. One finds that hygiene factors are product
quality. Packaging product warranty and so forth. Hese are the given factors and
all customers expect these features in all product groups.but the motivation will
be factors like customer focussed sales team.a good customer service and may
be even just the fact that the usage of a product may help customer create a
seprate identity for himself or herself. What is therefore important is that
marketer should identify these satisfiers in each customer group.

Mcclelland ‘s theory of achievement motivation

Harvard professor david mccelland has provided a new insight into human
motivation. According to him there are three motives that drive human beings to
higher perfomance. These are the need for belonging need for power and the
need for achievenment. It is the latter need which makes individuals and
societies excel and be creative. Extending the theory to marketing. Some
products are seen to represent achievement. While others are seen as power
symbols and yet other as products meant for satisafying the need for belonging.
Marketers have used these motives in evolving their communication
programme.

Thus, McClelland’s theory does help a firm to evolve its strategies for pepole
motivated by different needs. An important observation in human motivation is
that as societies devlop. Primary motives, or physiological needs like sex and
hunger become less important and secondary motives like achievement and
power gain a higher degree ofb importance. The marketer needs to be aware of
this process, as for different communities and groups the need mix may be
different and hence requiring different marketing tasks.

PERCEPTION
Perseption has been define as the process by which an individual selects,
organises and interprets information inputs to creat a meaningful picture of the
world. Consumers are constanly bombarded with information every day.
Information processing is susceptible to a consumer’s perceptual defences,
namely selective attention, selective perception and selective retention. It is
impossible for consumers to allocate their time and effort in addressing each bit
of information. Therefor, this concept is known as selective attention.

In marketing, perceptions are more important than the reality, as perceptions

that will affect consumers actual behaviour. People can emerge with different
perceptions of the same object because of three perceptual processes :selective
attention, selective distortion and selective retention.

Selective attention

It has been estimated that the average person may be exposed to over 1500 ads
or brand communications a day. Because a person may be exposed attend to all
of these, most stimuli will be screened out-a process called selective attention.

Selective distortion

Even noticed stimuli do not always come acoss in the way the senders intended.
Selective distortion is the tendency to interpret information in a way that will fit
our preconceptions. Consumers will often distort information to be consistent
with prior and product beliefs.

Selective retention

People will fail to register much information to which they are exposed in
memory. But willtend to retain information that supports their attitudes and
beliefs. Because of selective retention.

Subliminal perception

The selective perception mechanisms require active engagement and thought

by consumers. A topic that has fascinated armchiar marketers for ages is
sublimenal perception.

LEARNING
When people act, they learn. Learning invovels changes in an individual’s
behaviour arising from experience. Most human behaviour is learned. Learning
theorists that learning is produced through the interplay of drives, stimuli, cues,
responses and reinforcement.

A drive is a strong internal stimulus impelling action. Crues are minor stimuli that
determine when, where, and how a person responds. Suppose you buy a dell
computer. If your experience is rewarding. Your response to computers and dell
will be positively reinforced. Later on, when you want to buy a printer, you may
assume that because Dell makes good computers, Dell also makes good printer.
In other words, you generalize your response to similar stimuli. A
countertendency to generalization is discrimination. Discrimination means that
the person has learned to recognize differences in sets of similar stimuli and can
adjust responses accordingly.

Learning theory teaches marketers that they can build demand for a product by
associating it with strong drives,using moyivationing cues, and providing positive
reinforcement . A new company can enter the market by appealing to the same
drives that competitors use and by providing similar cue configurations. Because
buyers are more likely to transfer loyalty to similar brands: or the company
might design its brand to appeal to a different set of drives and offer strong cue
inducements to switch.

PERSONALITY
Personality is the inner psychological characteristic of individuals that leads to
consistent response to their environment. If marketers can identify the
personality profile of the target market, advertising can show people of the same
type using the product. Personality types could be extremes such as introvent-
extrovert, sociable-loner, competitive- cooperative etc…

Brand personality is the characterization of brands as perceived by customers.

Brands may be charaterized as ‘for young’ like MTV or Levi’s. by creating a
brand personality, a marketer may appeal to those peple who value that
characterization. Customers prefer the brands that either match their own
personality or portray personalities that they aspire for. For instance, a laptop
convering efficiency and productivity could be identical to an
executive’spersonality. Apparel brands conveying success and material wealth
could be aspirational for young executives.

BELIEF AND ATTITUDE

Belief is thoughts about a product or a brand on one or more choice criteria. A
consumer believes that swatch offers international quality watch, or a particular
hotel has good room service.

A belief is not factual, it is a perception which may or may not be factually

correct. Misconceptions about products can be harmful to the sale of the brands.
A consumer might think that a brand of durables is expensive because of the
advertising imagery that it uses. He may not check the actual price of the brand
at all. The company’s aim should be to ward off the misconceptions about their
brand.

An attitude is an overall favorable or Unfavorable ards the product. They

evalution of a product. The consequence of a set of beliefs may be positive or
negative attitudes towards the product. They may be developed as a part of
information search activities and result of product use.

Attitude play an important role in product design through the desiner’s efforts of
matching product attributes to customers beliefs and attitudes. They also play
an important role in persuasive communications from the company which tries
to reinforce positive beliefs and attitudes, correct misconceptios and establish
new belifs. Customers attitudes and beliefs impact pricing in the way that the
company tries to match price with customer’s beliefs about what a good product
should cost.

LIFESTYLE
Lifestyle is the pattern of living as experessed in a person’s activities, interest
and opinions. Lifestyle analysis groups consumers according to their activities,
values, and demographic characteristics such as eduction and income

Lifestyle have been found to correlate with purchasing behaviour. A company

may choose to target a particular product offering and use advertising which is
in line with the values and beliefs of this group.

 DECISION MAKING PROCESS

The organisational buyer’s decision making is an eight stage process . these
stages have even been termed as buy plhases. They are

Need Product Laying down Inviting

recognition specification qualifications proposals
for potencial from qualified
venders vendrs

Determination
Review and
of order size Selecting the Evaluating the
feedback
and vendor proposals
placement of
order

Need recognition

This is the stage where the customer perceives a need for the product. But the
exact specification of the product are generally not defined at this stage.
Typically, this is the stage where the customer has a problem and is looking for
an acceptable solution. There problem definitions may emanete from concerns
like cost reduction, better efficincy and higher productivity.

Product specification

Here the customer is more specific about what he is looking for.he lays down
secification for the product he is looking for. He also spells out theservice
requirements.

Laying down qualifications for potencial venders

At time, organizational buyers lay down the technical and commercial

qualification for potencial venders. This is one of the ways by which buyers are
able to screen out a large number of venders who may not be able to their
requiremants.

Inviting proposals from qualified vendrs

This is the stage when proposals, often sealed, are invited from qualifed
venders. This invitation is either an open tender notice for all prequlified vendors
or the supplier may flot an enquiry or seek proposals from only a few
prequalified vanders.

Evaluating the proposals

The proposals are evaluated for their technical content and capability to meet
the customers’ requirements.

Selecting the vendor

Onece the technical evalution is complete and vendors shortlisted for final
selection. The proposal is commercially evaluated. Vendors too are now
assessed more closely on their competence in meeting customer requirements.
This is the stage where negotiations often take place. Having evaluted and
negotiated. The vendor is then selected. In actual practice the buyer generally
selects two vendors so as to ensure uninterrupted supplies. He apportions the
order between the two.

Determination of order size and placement of order

During this stage the buyers determines the size of the order lot. In case the
product in question is a raw material or any other consumble. This stage will
invovle determining specific quantities the customer wants at specific time
intervals. But if the customer has selected two or more suppliers. He may choose
to adoption the order among them at this stage. Actual placement of order is
also a part of this stage.

Review and feedback

This is a very critical stage for the seller. Generally the buyer reviews the
performance of the vendor and also obtain a feedback from all the departments
using the suppliers’ products. The buyers then gives a feedback to the seller by
either repeating his purchase, reducing or increasing the quality of material
purchased. Or may flot a subsequent enquiry only to those suppliers who have
lived up to his expectations. Since the repeat purchase is going to the based on
these reviews, it is important that vendor gets a positive feedback.

 MODELS OF CONSUMER BEHAVIOUR

• Economic model

Under economics , it is assumed that man is a rational human being , who will
evaluate all the aiternatives in terms of cost and value received and select that
product/service which gives him/her 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 limted purchasing power,
and a set of needs and tasteds, a consumer will allocate his/her expenditure
over different products at given prices so as to maximise utility.
The law of equimarginal utility enables him to secure maximum utility from
limited purchasing power.

Economic model of consumer behaviour is unidimensional. This means that

buyin g decisions of person are governed by the concept of utility. Being a
rational man he will make his purchase decision with the intention of maximising
the utility/benefits.

Economic model is based on certain predictions of buying behaviour. 1. Price

effect- lesser the price of the product, more will be the quantity purchased, 2.
Lesser the price of the sudstitute product, lesser will be the quantity of the
original product bought 3. More the purchasing power, more will be the quantity
purchased.

• Learning model

Unilike the economists, classical psychologists have been interested in the

formation and satisfaction of needs and tastes. They argued that living beings
were influenced by both innate need such as the primary needs of hunger, thirst,
sex shelter and learned needs like fear & guilt. A drive which when directed
towards a drive redusing object becomes a motive. The various product or
services will act as stimuli to satisfy drives.

In marketing context, ‘lerning’ help marketers to understand how consumers

learn to respond in new marketing situations, or how they have learned and
responded in the past in similar situations. Very often it is observed that
consumer’s experiece with one product from a firm is likely to be generalised to
the other products of the firm.conversely, consumers also learn to
discriminationate and this information will be useful in working out different
marketing strategies. Simply stated this learning model will help marketers to
promote associations of products with strong drives cues and positive re-
inforcements.

• Psychoanalytic model

This model is based on the work of psychologists who were concerned with
personality. They were of the view that human needs and movies operated at
the conscious as well as sub conscious levels. This theory was developed by
sigmund frued. According to him human behaviour is the outcome of 1) ‘id’ –
the source of all psychic energy which drives us as action 2) ‘super ego’ – the
internal reprentation of what is approved by the society 3) ‘ego’ – the conscious
directing ‘id’ impulses to find gratification in a socilly accepted manner. Thus, we
can say that human behaviour is directed by a complex set of deep seated
motives.

From marketing point of view this means that buyers will be influenced by
symbolic factors in buying a product. Marketers have been using this appoach to
generate for developing product – design, features, advertising and other
promotional techniques.

• Sociological model

According to this model the individual buyer is a the institution called society.
Since he is living in a society, he gets influenced by it and it turn also influences
it in its path of development. He is playing many roles as a part of various formal
and informal associations or organisations.
Intimate groups comprising of family, friend and close colleagues exercise a
strong influnce on the life style and the buying behaviour of an individual
member. The peer group plays a very important role in acting as an influencing
factors especially in adopting particular life styles and buying behaviour
patterns. The group generally has an informal opinion leader, whose views are
respected by the group. This leader is able to influence the members life style
and buying decisions.

The marketers through a process of market segmentation can work out on the
common behaviour patterns of a specific class and group of buyers and try to
influence their buying pattern.

• The howard sheth model of buying behaviour

This model basically serves two purposes:

1) It indicates how complex the whole question of consumer behaviour really

is.
2) It provides the frame work for including various concept like learning,
perception, attitutes etc…..which play a role in influencing consumer
behaviour.

Inputs: in the howard-sheth theory, the most significant stimulus affecting the
buying behaviour are the information cues about characteristics of the product.
These cues may be significative if it comes to the buyer from the product itself
when he is invovled in a shopping activity. A similar set cues, which are symbolic
in nature may also act as information sources.

Both these significant and symbolic information cues represent the firms
marketing efforts. The product or broad characteristics acting as
information cues are quality, price, distinctiveness, service and
availability. These are impersonal source like media communication and
advertising, over which the firm has no control. However, the information
source also include sales and service personnel who can add help the
marketing efforts of the firm. The third source is social infor,mation cues
which could affect buying behaviour towards the product or brand and
these include family, friends or other members of the groups with whom
buyer comes onto contact or to which he aspires to be in. this social
source is personal and the company/ marketer has no control over this
source.
Name: Reema Kansagra
Consumer behaviour:
Introduction
Submitted to: Priti Mam