CONSUMER

BEHAVIOR IN
SERVICES
By-
Stuti Sachdeva
Priya Gupta
CONSUMER BEHAVIOUR

■ Consumer behaviour is the study of individuals,

groups, or organizations and all the activities
associated with the purchase, use and disposal of
goods and services, including the consumer's
emotional, mental and behavioural responses that
precede or follow these activities.
Maslow’s hierarchy of needs
Maslow’s hierarchy of needs
■ Abraham Maslow (1954) developed the hierarchy of needs model which
can help us understand the basis of human motivation. Maslow’s
hierarchy of needs is a motivation theory designed to account for most
human behaviour in general terms, stipulating a natural progression from
physiological needs to higher, self actualisation needs.

Level 1- PHYSIOLOGICAL: Food, water, sleep, and sex are physiological

motives. These motives need to be satisfied in order to achieve other levels
of the hierarchy.

Level 2- SAFETY: Seeking physical safety and security, stability, familiar

surroundings are signs of safety needs. They are aroused after physiological
motives are minimally satisfied and before other motives.
■ Level 3- BELONGINGNESS: These motives are reflected in a
desire for love, friendship, affiliation and group acceptance.
Activated after safety and physiological needs are satisfied.

■ Level 4- ESTEEM: Desires for status, superiority, self

respect and prestige are examples of esteem needs. these
needs relate to the individuals feelings of usefulness and
accomplishment.

■ Level 5- SELF-ACTUALISATION: This involves the desire for

self-fulfilment, that is, becoming all that one is capable of
becoming. This level is only activated when all others have
been satisfied. (Questar, et al. 2011, p.303)
EXAMPLE

■ The bottled water industry in Australia is a 6 million dollar industry.

That’s a lot of money we as consumers pay for something we can
essentially get for free. So then what is it that makes us want to
purchase bottled water? Convenience is an obvious answer but we
can go deeper. In its basic form water is a physiological need,
however marketers have applied Maslow’s hierarchy to push bottled
water into other needs further up Maslow’s hierarchy.

■ Mount Franklin marketing efforts appeals to consumers physiological

needs as well as safety needs, belonging needs and esteem needs. If
consumers feel that a product is meeting their needs on more than
one of Maslow’s levels then they are more likely to purchase that
product as it is fulfilling multiple needs
Maslow’s Hierarchy of Needs and Consumer
Buying Behavior
■ The first step in the buying process is problem recognition. Problem recognition refers
to the time when a consumer realizes that he/she has an unfulfilled need. Here comes
marketing’s goal, to convince consumers that a specific product meets their motivating
need. Traditional marketing achieves that through perception, distortion, and retention.
■ Perception
“Perception in marketing is described as a process by which a consumer identifies,
organizes, and interprets information to create meaning.” The way the audience
“interpret” your brand’s marketing information is psychological.
■ Distortion
Distortion literally means “giving a misleading impression of something.” Viewers tend to
distort the information they receive based on their own previous brand conception and
product beliefs.
For example, when asked about their opinion of how a product tastes, consumers gave
different answers when they did not know the brand of the product, than the ones they
gave when they knew the manufacturing brand. Sometimes marketers call this “blind
loyalty.”
■ Retention
Researchers estimate that the average person may be exposed to over
1,500 ads or brand communications a day. Viewers will forget most of the
advertisements they see during the day. However, as a message is being
repeated, it sticks into our memories.
For example: Or as the saying goes, “Repeat it, believe it.” Brands who
have been there for a while establish their brand awareness by
maintaining the same slogan for a long time, such as “I’m lovin’ it” or
“Just do it.” This helps consumers recognize and remember the brand
through repetition.
4 MAJOR FACTORS WHICH AFFECT THE
CONSUMER DECISION MAKING PROCESS:
■ Cultural factors:
Culture plays a very vital role in the determining consumer behaviour it is sub
divided in:
Culture
Culture is a very complex belief of human behaviour it includes the human
society, the roles that the society plays, the behaviour of the society, its
values customs and traditions. Culture needs to be examined as it is a very
important factor that influences consumer behavior .
Sub-Culture
Sub-culture is the group of people who share the same values, customs
and traditions. You can define them as the nation, the religion, racial
groups and also groups of people sharing the same geographic location
Social Class
Society possesses social class; in fact every society possesses one. It is important
to know what social class is being targeted as normally the buying behaviour of a
social class is quite similar.
■ Social Factors:
Social factors are also subdivided into the following
Reference groups
Under social factors reference groups have a great potential of influencing
consumer behaviour. Of course its impact varies across products and brands. This
group often includes an opinion leader. For example, the popularity of organic
food products would also influence other members to shift their focus, thus
influencing their buying decision.
Family
The behaviour of a consumer is not only influenced by their motivations and
personalities but also their families and family members who can two or more
people living together either because of blood relationship or marriage.
Role and status
People who belong to different organizations, groups or club members, families play roles
and have a status to maintain. These roles and status that they have to maintain also
influences consumer behaviour as they decide to spend accordingly. For example: an
individual from a high social class is likely to buy a luxury car, whereas a middle-class
individual would go for a budget car.
■ Personal factors:
The sub factors under personal factor are listed below.
Age and life cycle stage
With the age and the life cycle the consumers purchase options and the motive of purchase
changes, with his decisions of buying products change. Hence this stage does affect
consumer behaviour.
Occupation
Occupation of a consumer affects the goods and services a consumer buys. The occupations
group has above average interest in buying different products and services offered by
organizations. In fact organizations produce separate products for different occupational
groups. For example, consumers change their clothing style and brand as they grow older.
Financial or economic situations
Everything can be bought and sold with the help of money. If the
economic situation of a consumer is not good or stable it will affect his
purchase power, in fact if the consumers or the economy of a nation is
suffering a loss it defiantly affects the consumers purchase or spending
decisions.

Life style
People originating from different cultures, sub cultures, occupations and
even social class have different styles of living. Life style can confirm the
interest, opinions and activities of people. Different life styles affect the
purchase pattern of consumers.

Self concept and personality

Every individual is different and have different and distinct personalities.
Their distinct personalities and distinct physiology effects their buying
■ Psychological factors:
Motivation
Motivation is activating the internal needs and requirements of the
consumer. It can also be described as goals and needs of the consumers.
Motivation arouses and directs the consumers towards certain goals
Learning and experience
Learning is the research of products and services before the consumer
takes the decision of buying a product. Learning and self educating these
days is done online and also in groups. Experience is taking a lesson
from the past experiences of a product and service.
Attitude and beliefs
Attitude is a consumer’s favorable and unfavorable emotional condition
or emotional feeling, also its tendency of reaction to certain actions and
behaviours. Beliefs of people that are the belief that people assume the
products to be as make the specifications of the products
Consumer decision making
model
Consumer decision making
model
Example
■ Tim went to a nearby retail store to buy a laptop for himself. The store manager
showed him all the latest models and after few rounds of negotiations, Tim
immediately selected one for himself. In the example Tim is the consumer and the
laptop is the product which Tim wanted to purchase for his end-use. it was actually
Tim’s need to buy a laptop which took him to the store.
The Need to buy a laptop can be due to any of the following reasons:
■ His old laptop was giving him problems.
■ He wanted a new laptop to check his personal mails at home.
■ He wanted to gift a new laptop to his wife.
■ He needed a new laptop to start his own business.
The store manager showed Tim all the samples available with him and explained him the
features and specifications of each model. This is called information. Tim before buying
the laptop checked few other options as well. The information can come from various
other sources such as newspaper, websites, magazines, advertisements, billboards etc.
Difference between consumer buying behavior
and organizational buying behaviour
Consumer buying Organizational
behaviour buying behaviour
■ In CVV, one or two people are ■ In OBB, several people are
involved in the buying involved in the buying
process. process.
■ In CVV, the process is ■ In OBB, the process is
relatively simple but informal. complicated and formalized
and depending on nature of
■ There is no set formula to
purchase.
buying behavior.
■ There is a systematic
■ The pattern of buyer depends
sequence to buying behavior.
upon learned and observed
behavior. ■ The pattern of buyer here is
professional and requires
■ In CVV, the buyer and seller
training.
Thank you!