INTRODUCTION TO CONSUMER BEHAVIOUR_______________________________________________ __ All of us are consumers.

We consume things of daily use, we also consume and buy these products accordingto our needs, preferences and buying power. These can be consumable goods, durable goods, speciality goodsor, industrial goods. What we buy, how we buy, where and when we buy, in how much quantity we buy depends on our perception, self concept, social and cultural background and our age and family cycle, our attitudes, beliefs, values, motivation, personality, social class and many other factors that are both internal and external to us. While buying, we also consider whether to buy or not to buy and, from which source or seller to buy. In some societies, there is a lot of affluence and, these societies can afford to buy in greater quantities and at shorter intervals. In poor societies, the consumer can barely meet his barest needs. Consumer behaviour can be defined as the decision-making process and physical activity involved in acquiring, evaluating, using and disposing of goods and services. This definition clearly brings out that it is not just the buying of goods/services that receives attention in consumer behaviour but, the process starts much before the goods have been acquired or bought. A process of buying starts in the minds of the consumer, which leads to the finding of alternatives between products that can be acquired with their relative advantages and disadvantages. This leads to internal and external research. Then follows a process of decision-making for purchase and using the goods, and then the post-purchase behaviour which is also very important, because it gives a clue to the marketeers whether his product has been a success or not. The marketeers therefore tries to understand the needs of different consumers and having understood his different behaviours which require an in-depth study of their internal and external environment, they formulate their plans for marketing.

Consumer generally refers to any one engaging in any one or all of the activities stated in our definition. The traditional viewpoint was to define consumers strictly in terms of economic goods and services and purchasers of products offered for sale. The view now has been broadened. It now also holds that monetory change is not essential for the definition of consumers. Few potential adopters of free services, or even philosophic ideas can be encompassed by this definition. Sometimes, the goods are bought by the father and the children use it. The children ultimately become the consumer. A packet of coloured crayons bought by the father and used by his children in school. The father buys a refrigerator and the user is the entire household. Therefore, we study certain consumer behaviour roles. Table 1.1 Some consumer behaviour roles Roles Descriptions Initiator The individual who determines that certain need or want is not being fulfilled and purchases a product to fulfill the need. Influencer A person who by some intentional or unintentional word or action influences the purchase decision. Buyer The individual who actually makes the purchase transaction mostly is the head of the family. User The person or persons who consume or use the purchase product. To understand the consumer, researches are made. Sometimes, motivational research is handy to bring out hidden attitude, uncover emotions and feelings. Many firms send questionnaire to customers to ask about their satisfaction, future needs and ideas for a new product. On the basis of the answers received a change in the marketing mix is made and advertising is also streamlined.

REASONS FOR STUDYING CONSUMER BEHAVIOUR The most important reason for studying consumer behaviour is the role that it plays in our lives. We spend a lotof time in shops and market places. We talk and discuss with friends about products and services and get lot ofinformation from T.V. This influences our daily lives. Consumer decisions are affected by their behaviour. Therefore, consumer behaviour is said to be an applied discipline. This leads to the microperspective and societal perspective. Micro Perspective. It involves understanding consumer for the purpose of helping a firm or organization to achieve its objectives. All the Managers in different departments are keen to understand the consumer. They may be Advertising Managers, Product Designers, Marketing and Sales Managers and so on. Societal Perspective is on the macro level. Consumers collectively influenced economic and social conditions within a society. Consumers strongly influence what will be product, what resources will be used and it affects our standard of living. Management is the youngest of sciences and oldest of arts and consumer behaviour in management is a very young discipline. Various scholars and academicians concentrated on it at a much later stage. It was during the 1950s, that marketing concept developed, and thus the need to study the behaviour of consumers was recognised. Marketing starts with the needs of the customer and ends with his satisfaction. When everything revolves round the customer then the study of consumer behaviour becomes a necessity. It starts with buying of goods. Goods can be bought individually, or in groups. Goods can be bought under stress (to satisfy an immediate need), for comfort and luxury in small quantities or in bulk. For all this, exchange is required. This exchange is usually between the seller and the buyer. It can also be between consumers.

To understand the likes and dislikes of the consumer, extensive consumer research studies are being conducted. These researches try to find out: Whatthe consumer thinks of the companys products and those of its competitors? How can the product be improved in their opinion? How the customers use the product? What is the customers attitude towards the product and its advertising? What is the role of the customer in his family? The following key questions should be answered for consumer research. A market comes into existence because it fulfils the needs of the consumer. In this connection, a marketeer has to know the 70s framework for consumer research. Taking from an example of soap. Table 1.2 Who constitutes the market? Parent, child, male, female Occupants What does the market buy? Soap, regular, medicated, with glycerine, Objects Herbal what brand, what size Who participates in buying? Parent, child, male, female Organisations How does the market buy? Cash, credit, mail-order etc. Operations When does the market buy? Monthly, weekly etc. prescribed by doctor Occasions (medicinal) Where does the market buy? Supermarket, retail store etc. Outlet

Why does the market buy? For cleansing, bathing, fresh feeling etc. Objectives Consumer behaviour is a complex, dynamic, multi-dimensional process, and all marketing decisions are based on assumptions about consumer behaviour. Marketing strategy is the game plan which the firms must adhere to, in order to outdo the competitor or the plans to achieve the desired objective. In formulating the marketing strategy, to sell the product effectively, costbenefit analysis must be undertaken. APPLYING CONSUMER BEHAVIOUR KNOWLEDGE (1) Consumer behaviour knowledge is applied in Marketing Management. A sound understanding of the consumer behaviour is essential to the long-term success of any marketing programme. It is the corner stone of marketing concept which stress on consumer wants and needs, target market selection, integrated marketing and profits through the satisfaction of the consumers. (2) Consumer behaviour is also important in non-profit and social organizations. Such organizations are govt. agencies, religious organizations, universities and charitable organizations

These days even car outlets are giving free trials and rides to prospective customers to make their new models of cars diffuse faster. 6. Fulfilment of felt need: The faster a need is satisfied or fulfilled by a product, the greater is the rate of its diffusion. 7.Co mp at ib ilit y: The more the product is compatible with the beliefs, attitudes and values of the individual or group the faster the diffusionvegetables soup for vegetarians, ordinary microwave, no roasting.

Fig. 9.2 Rapid rate of diffusion 8. Relevant advantage: The advantage could be of price, quality, ease of handling product quality. To have quick diffusion, the product must offer either a price advantage or a performance advantage. Washing machine is expensive, but a labour saving device. 9.Co mp le xity: If the product is complex (difficult to understand and use) the diffusion is slower. The product may be complex but it must be easy to understand. Complexity may be because of many attributes (attributes complexity which are difficult to understand). The other complexity may be trade off complexity. The trade off takes place between cost of purchase and economy. Convenience vs. space or speed of cooking vs. quality of cooking, as in microwave ovens. 10.Ob se rvab ilit y: The more easily the positive effects of the products can be observed, the more discussion takes place and faster the diffusion process,e. g. , cell phones. Classification of Adopters Adopters can be classified into five groups based on the time when they adopt: Innovators: The first 2.5 per cent to adopt innovation. Early adopters: The next 13.5 per cent to adopt. Early majority. The next 34 per cent to adopt. Late majority: The next 34 per cent to adopt. Laggards: The final 16 per cent to adopt. Innovators (2.5%) Innovators are venture some risk takers. They are younger, more educated and socially mobile. They have thecapacity to absorb risk associated with the new product. They are cosmopolitan in outlook, are aware and makeuse of commercial media, and eager to learn about new products, are progressive, ready to use new products. Early adopters (13.5%) They take a calculated risk before investing and using new innovations. They are opinion leaders and provide information to groups, but they are also concerned about failure. Therefore, they weigh advantages and disadvantages of the product before plunging in for a purchase. Early majority (34%) They tend to be more continuous and use the product after the innovators and early adopters seem to be satisfied with it. They are elders, well educated and less socially mobile.

They rely heavily on inter-personal source of information. They constitute 34 per cent of the consumers. Late majority (34%) They are doubtful and sceptical about the innovation of new products. They tend to use the product not so much because of innovation, but because of other pressuresnonavailability of the product and social pressures. They have less social status, and are less socially mobile than previous group. They are average in age, education, social status, income. They make little use of media (Magazine etc.). They rely heavily on informal sources of information. Laggards (16% of a Market) They are more traditional. They possess limited social interaction and are oriented to the past. They adopt the innovations with great reluctance. They have the least education, lowest social status and income. They possess no opinion leadership and are in touch with other laggards and donot subscribe to many magazines. Market strategy related to diffusion There are differences in the early purchasers or innovators and late purchasers (Laggards). The strategy for the target market adopted, is a moving target market approach. First the general target market is selected, and then the focus shifts to innovators, early adopters, early majority, late majority and laggards. This takes place as the product keeps getting acceptance from the consumers. There is then a change in the media and advertising themes for different target groups. Adoption and Diffusion Through Marketing Strategy Marketeers have been trying to influence consumers to adopt new innovations. This is done through free samples and price promotions. Advertising is done extensively when the results are not found positive by distribution of free samples and promotions. Sometimes price promotions and free samples are backed by advertising techniques. Sometimes change agents are used to overcome resistance to adoption. For medical products, hospitals, clinics and physicians of repute are used as change agents. Rate of Diffusion. The rate of diffusion can be low or high. Marketeers have 2 options that can influence the

rate of diffusion. Skimming Strategy. This strategy used for major innovations and when the product is in great demand. Prices are set high and it has slow rate of diffusion. The strategy aims at skimming the cream of the marketi. e ., to take advantage and get the profits in abundance. The segment is small and specific. The segment is price insensitive. It has its own lifestyles and demographic characteristics, awareness and information advertising is used in this case. The distribution is done from selective outlets. Penetration Strategy. In this, there is rapid and widespread diffusion as the product is of low value and is within the reach of many. The product is sold to a General Market by an intensive campaign. The distribution isextensive and the product used is general. It is used in new products which are not major innovations like colddrink, health drinks, coffee etc. The advertising is widespread and other means of promotion are also used. The distribution is extensive and covering as many outlets as possible. The price is low and the product is available. The strategy keeps changing with its position on the diffusion curve. All electronic products of major innovation start with the skimming strategy and gradually move down to penetration strategy. The price of computers, television sets, microwave ovens etc., start with a high price and as the product is adopted and many more competitors come in the skimming strategy is changed to penetration strategies. Some products start with a penetration strategy and raise their prices with the widespread acceptance of the product in the market.

Table 9.4 Marketing strategies and rate of diffusion Rate of diffusion Slow Fast Marketing Strategy Skimming Penetration Price High

Low Market Segmentation Target market is specific and small Target market is large lifestyles and demographics are difficult to specify by considered lifestyles and . . demographics Promotion Information and Advertising backed Repetitive advertising use by personal selling and sales promotion of imagery and symbols Distribution Selection through prominent stores Intensive very large number of outlets Product Discontinuous Continuous Characteristics Innovations Innovatio

Internal Factors

Internal factors--also called personal factors--represent the consumer's ability to benefit directly from the product in question. A person's motivation to purchase or consume any given product is an internal factor, and it may rely on a person's desire to achieve goals related to other internal and external factors. Perception greatly determines a consumer's behavior, allowing them to justify one action or another based on the perceived outcomes. Use of perception to motivate a consumer can be as simple as showing young and attractive people who are obviously very happy and successful and who are using the product in question.

External Factors

Social norms are a prominent external factor influencing consumer behavior. The prevalence of brand-name clothing or new trends in design and fashion, for example, affects what any individual consumer will choose for themselves. Cultural values are an increasingly tapped factor in influencing consumers. Advertising campaigns that boast American-made or sweatshop-free products are a common example. Some companies have begun to include such ideals not only in their advertising but also as an aspect of the products themselves. Some examples of the inclusion of cultural values in ownership of a product include Tom's Shoes, who donate a pair of shoes to children for every pair of shoes purchased, and the Purina One Hope Network, which donates a portion of profits from pet food sales to pet adoption efforts. In those cases, consumers are not only purchasing a product but also engaging in social activism.

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