Consumer Behaviour

An Introduction

What is Consumer Behaviour?

Those activities directly involved in
obtaining , consuming and disposing
of products and services, including
the decision processes that precede
and follow these actions

This study draws on concepts

from various other disciplines

Psychology
Sociology
Anthropology
Economics
Marketing

Need to study ?
You cannot take the consumer for granted
any more
Therefore a sound understanding of
consumer behaviour is essential for the
long run success of any marketing program

Perspectives
Logical Positivism
1. Understanding and predicting consumer
behaviour
2. Cause and effect relationships that govern
persuasion and/or education
Post Modern to understand consumption
behaviour without any attempt to
influence it

Why is this important?

Out of 11000 products launched by 77
companies, only 56% are present five years
later Kuczmaski & Associates
Only 8% of new product concepts offered
by 112 leading companies reached the
market. Out of this 83% failed to reach
marketing objectives Group EFO Ltd., Marketing
News, Feb 1, 1993, Pg 2

MEET THE NEW

CONSUMER
and smile when you do because
she is your boss. It may not be
the person you thought you
knew. Instead of choosing from
what you have to offer, she tells
you what she wants. You figure it
out how to give it to her.
-Fortune Editor

A new product must satisfy

consumer needs, not the needs
and expectations of management.

Understanding and adapting to

consumer motivation and behaviour
is not an option it becomes a
necessity for competitive survival

Consumer sovereignty presents a

formidable challenge but skilful
marketing can affect both motivation
and behaviour if the product or
service offered is designed to meet
consumer needs and expectations
A sales success occurs because demand
either exists already or is latent and
awaiting activation by the right marketing
offering

Dominant forces shaping Consumer

Research
Factors that move an economy from
Production-driven to Market-driven
Level of sophistication with which human
behaviour is understood in psychology and
other behavioural sciences

Environmental factors that affect the

marketing challenge
Extent to which the supply of valid products and
services exceed consumer demand
Ability to communicate with customers quickly
and accurately
Existence of multiple avenues of distribution
quickly and economically
Extent to which marketers can influence to induce
distributors to comply with overall marketing
strategy
Economic growth, both nationally and globally

Motivational Research
It seeks to learn what motivates people in
making choices. The techniques are such as
to delve into the conscious, subconscious
and the unconscious.
women dont buy cosmetics, they buy
hope.
women bake cakes out of the unconscious
desire to give birth

The advice to footwear salesmen

should be Dont sell shoes sell
lovely feet
Marketers must contend with small
changing segments of highly selective
buyers intent on receiving genuine value at
the lowest price

All managers must become astute

analysts of Consumer motivation
and Behaviour
Three foundations for marketing decisions
Experience
Intuition
Research

Enhancing Consumer Value-added

Marketers have to constantly innovate after
understanding their consumers to strip out
costs permanently by focusing on what
adds value for the customer and
eliminating what doesnt.

Individualised Marketing
A very personal form of marketing that
recognises, acknowledges, appreciates and
serves individuals who become or are
known to the marketer.
Data based marketing; DM
Customized marketing

Variables involved in
understanding consumer
behaviour
Stimulus ads, products, hungerpangs
Response physical/mental reaction to the
stimulus
Intervening variables mood, knowledge,
attitude, values, situations, etc.

Overall Model of Consumer Behaviour

External Influences
Culture
Subculture
Demographics
Social status
Reference groups
Family
Marketing Activities Self-Concept
&
Learning
Internal Influences
Perception
Learning
Memory
Motives
Personalit
yEmotions
Attitude
s

Decision Processes
Problem Recognition
Information Search
Alt Eval & Selection
Outlet select &
Purchase
Postpurchase
Processes

Consumer Decision Processes

You cant assume that people

know what they want
You cant assume that people will tell you the
truth about their wants and dislikes, even if they
know them. What you are likely to get are answers
that will protect the informants in their steadfast
endeavour to appear to the world as really
sensible, intelligent rational beings

Nature of Decision Processes

Purchase options
Consumption options
Divestment options

Purchase options

Whether to buy or save?

When to buy?
What to buy both category and brand?
Where to buy?
How to pay?

Consumption options
Whether to consume or not?
When to consume?
How to consume?

Divestment options
Disposal
Recycling
Remarketing

Consumer Problem Solving

Rational
Hedonic
In most cases it is a combination of the two

Consumer Decision Making

Stages

Need recognition
Search for information
Pre-purchase alternative evaluation
Purchase
Consumption
Post-purchase evaluation
Divestment

Variables that shape decision

making
Individual differences
Environment influences
Psychological processes

Individual differences

Consumer resources
Knowledge
Attitudes
Motivation
Personality, values, lifestyle

Environmental Influences

Culture
Social class
Personal influence
Family
Situation

Psychological Processes
Information Processing
Learning
Attitude and changes in behaviour

Information Processing

Exposure
Attention
Comprehension
Acceptance
Retention

Decision Process continuum

complexity
high

low
Degree of complexity
Extended
problem
solving

Habitual
decision
making

Extended Problem solving

Thought and evaluation precede the
act of purchase and use because of
the importance of making the right
choice

Limited Problem solving

Need recognition leads to buying
action, because the purchase does not
assume great importance

Factors influencing extent of

problem solving
Degree of involvement personal factors,
product factors, situations
Alternatives are differentiated time
availability, consumer mood
Sufficient time for deliberation

Impulse buying
It does not have the indifference that accompanies LPS. A
high sense of emotional involvement and urgency short
circuits the reasoning process and motivates immediate
action
A sudden and spontaneous desire to act accompanied by
urgency
State of psychological disequilibrium in which a person
can feel out of control
Onset of conflict and struggle that is resolved by
immediate action
Minimal objective evaluation
Lack of regard for consequences

Variety Seeking

Acivation of seeking variety as a motive

Similar alternatives
Frequent brand shifts
High purchase frequency

Consumer Decision Processes

You cant assume that people

know what they want
You cant assume that people will tell you the
truth about their wants and dislikes, even if they
know them. What you are likely to get are answers
that will protect the informants in their steadfast
endeavour to appear to the world as really
sensible, intelligent rational beings

Nature of Decision Processes

Purchase options
Consumption options
Divestment options

Purchase options

Whether to buy or save?

When to buy?
What to buy both category and brand?
Where to buy?
How to pay?

Consumption options
Whether to consume or not?
When to consume?
How to consume?

Divestment options
Disposal
Recycling
Remarketing

Consumer Problem Solving

Rational
Hedonic
In most cases it is a combination of the two

Consumer Decision Making

Stages

Need recognition
Search for information
Pre-purchase alternative evaluation
Purchase
Consumption
Post-purchase evaluation
Divestment

Variables that shape decision

making
Individual differences
Environment influences
Psychological processes

Individual differences

Consumer resources
Knowledge
Attitudes
Motivation
Personality, values, lifestyle

Environmental Influences

Culture
Social class
Personal influence
Family
Situation

Psychological Processes
Information Processing
Learning
Attitude and changes in behaviour

Information Processing

Exposure
Attention
Comprehension
Acceptance
Retention

Decision Process continuum

complexity
high

low
Degree of complexity
Extended
problem
solving

Habitual
decision
making

Extended Problem solving

Thought and evaluation precede the
act of purchase and use because of
the importance of making the right
choice

Limited Problem solving

Need recognition leads to buying
action, because the purchase does not
assume great importance

Factors influencing extent of

problem solving
Degree of involvement personal factors,
product factors, situations
Alternatives are differentiated time
availability, consumer mood
Sufficient time for deliberation

Impulse buying
It does not have the indifference that accompanies LPS. A
high sense of emotional involvement and urgency short
circuits the reasoning process and motivates immediate
action
A sudden and spontaneous desire to act accompanied by
urgency
State of psychological disequilibrium in which a person
can feel out of control
Onset of conflict and struggle that is resolved by
immediate action
Minimal objective evaluation
Lack of regard for consequences

Variety Seeking

Acivation of seeking variety as a motive

Similar alternatives
Frequent brand shifts
High purchase frequency