Transcript File - Sheetal`s Education Center

CONSUMER BEHAVIOUR
BY
PROF. SHEETAL CHHABRA
DEFINATION
Consumer behavior can be
defined as:
"The decision process and
physical activity engaged in when
evaluating, acquiring, using or
disposing of goods and services."
WHO IS CONSUMER?
A "consumer" is anyone who typically
engages in any one or all of the activities
described in our definition.
A "customer" is one who actually
purchases a product or service from a
particular organization or shop.
Some Consumer Behavior Roles
Role Description
Initiator The person who determines that some need or
want is not being met.
Influencer The person who
intentionally/unintentionally influences the decision
to buy the actual purchase and/or use of product or
service.
Buyer The person who actually makes the purchase.
User The person who actually uses or consumes the
product or service.
DECISION PROCESS
example of a father, we call Mr. Bannerjee. buying a TV for his family.
It is possible that the consumer behavior involving mental processes and activities
may have taken place in the following sequence and manner.
Mr. Bannerjee's teenage daughter sees a new colour TV at her friend's house.
She then raises the issue of buying a colour TV to replace then existing
black and white TV. The next day Mr. Bannerjee discusses the matter with his friend
and colleague, Mr. Chandra. He also finds out more about the various brands, prices
and quality of different brands, from her sister who recently purchased a colour TV.
In the next few days the entire Bannerjee family makes it a point to carefully study any
advertisements of colour TV that appear in the newspaper, magazine or TV.
The dealer offered them a special five per cent discount and a free antenna
along with free installation. The information that this company would soon he offering a
VCR at a reasonable price clinched the decision in favour of other TV.
The activity and thought process which resulted in the final purchase of TV started
well before the actual purchase took place and was
spread over a period of two to three weeks. This entire process forms part of
consumer behavior.
SCOPE OF CONSUMER BEHAVIOUR
This framework is made up of three main sectionsthe decision process as represented by the innermost circle, the individual determinants on the
middle Circle and the external environment which is
represented by the outer circle. The study of all
these three sections constitutes the scope of
consumer behaviour.
Problem recognition thus occurs when the
consumer recognizes that he has an
unfulfilled need. The desire to fulfil this
need triggers off the other steps of
information; search and evaluation and
finally result in the purchase process.
However, not all situations of problem
recognition automatically lead to the next
step of information search and evaluation.
A consumer may recognize the need for a
vehicle to cover the long distance from his
home to office and back. But if he doesn't
have the means to buy a vehicle for himself,
then his need would remain a need, and
despite his recognition of the problem, the
ensuing steps will not take place. The
constraints can be lack of availability or lack
of ability to buy.
Only if there are no constraints preventing further
behavior, the consumer will set out to search for
information relevant to the problem. The
information search can take place without the
consumer even being aware of it or it may take the
form of a deliberate, prolonged search. To replenish
the stock of toothpaste, a regular customer knows
from memory and past experience the brand, the
package size he wishes to buy, and the place from
where he would like to buy. Of course, if it is a first
time customer for toothpaste then he, would
search for information from the external
environment, such as his friends, shopkeepers, and
advertisements

Having gathered the relevant information, the
consumer needs to evaluate it to arrive at the
decision regarding which toothpaste best fulfils his
need.
Having arrived at the decision, he set's out to make
the purchase. At this point the consumer has to
make a choice regarding which outlet to by from.
After the purchase when the consumer uses the
product he either feels satisfied with-it and
concludes that he has made the right decision or
the feels dissatisfied and decides that his decision
was not correct. This dissatisfaction-set in motion a
search for alternative choices and fresh evaluation.
It is thus a continuing cycle of decision process.
INDIVIDUAL DETERMINANTS
The specific variables unique to each
individual, which influence his behavior
as a consumer. These variables are
psychological in nature
 Motivation and Involvement
 Attitude
 Personality and Self-concept
 Learning and Memory
 Information Processing
Motivation and Involvement
All of us are consumers, within a given
society all of us have the same alternatives
to choose from and yet no two consumers
may exhibit identical consumer behaviour.
The reason for this is that each one of us is a
unique individual with a unique set of needs,
desires and motivation. Motivation is that
internal force which arouses or activates
some need and provides direction of
behaviour towards fulfilment of the need.
Attitude
Attitudes are our learned predispositions towards
objects, people and events. Attitudes guide our
orientation towards these. It is our attitudes
which influence how we respond to different
products and services. Attitudes are not inborn or
innate in us. Rather they are learnt from people
around us.
 Till a few years ago most housewives had a
negative attitude towards frozen, dehydrated or
instant food. But today, with more women joining
the work force, such products are viewed as a
convenience and instant, quick to cook meals are
looked upon favorably.
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Personality and Self-concept
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Personality is the sum total of the unique
individual characteristics that make each one
of us what we are. It provides a framework
within which a consistent behaviour can be
developed. Self-concept or self-image is the
way we perceive ourselves in a social
framework. We always tend to buy only those
products and services which we think fit or
match with our personality.
Gwalior Suitings uses Nawab of Pataudi for
promoting its suitings, to project an image of
class and exclusivity and perceives that this
image would match well with the self-concept
of their target consumers.
Learning and Memory
Everyday we are exposed to a wide and diverse range of
information. But we can barely recall a small fraction of
it the next day.
 We only remember that which is of relevance and
importance to us, or where we have a motivation to
remember.
 Consider a situation where a family is viewing a TV
programme and the accompanying advertisements. Out
of the 15-20 advertisements, the seven year old
daughter may remember the advertisement for Barbie
dolls, the husband (who drives the car) may remember
the advertisement of radial car tyres and the wife may
remember the advertisement for a new model of mixergrinder.
 This is because each one of them has a motivation for
different products.

Information Processing
This refers to the process and activities
which consumers engage in while gathering,
assimilating and evaluating information.
 we only attend to selective information. The
manner in which we assimilate and evaluate
this selective information is determined by
our motives, attitudes and personality and
self-concept.
 A half-filled glass elicits the response "a
half-empty glass from, one consumer while
another reacts by saying it is "half-full".

EXTERNAL ENVIRONMENT
All the variables emanating from the society
within which an individual lives and
interacts and which bear a strong influence
on his consumer behaviour.
 Cultural Influences
 Sub-cultural Influences
 Social Class Influences
 Social Group Influences
 Family Influences
 Personal Influences
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Culture is defined as the complex, sum total
of knowledge, belief, traditions, customs,
art, morals, law and any other habits
acquired by people as members of a society.
Within a given culture, there are many
groups or segments of people with distinct
customs, tradition and behaviour, which set
them apart from other people. All Indians
share one common cultural heritage, but the
Hindu Brahmins of Tamil Nadu are very
different from the Hindu Bengalis of Calcutta
in the same way as Kashmiri Hindus are
different from the Hindus of Gujarat.
Social class is a group consisting of a number
of people who share more or less equal
position in a society. Within a social class
people tend to share same values, beliefs,
and exhibit similar patterns of behavior and
consumption.
 Social classes may be defined by parameters
such as income and occupation. The
belongingness to a social class influence
dicisions such as choice of residence, type of
holiday, means of entertainment and leisure.

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A social group is a collection of individuals
who share some common attitudes and a
sense of relationship as a result of
interaction with each other. Social groups
may be primary where face-to-face
interaction take place frequently, such as
families, work groups and study groups.
Secondary groups are those where the
relationship is a more formalized and less
personal in nature. Examples of primary
groups are associations of professionals
members of a political party, and social
groups such as Rotary, Lions, Jaycees etc.
Family is a social group which can be defined
as a primary group. It needs to be studied in
great detail as it is one of the strongest
sources of influences on consumer behavior.
 Each individual is influenced by the family,
social class, sub-cultural and cultural group
to which he belongs, and yet has his own
distinct personality which influences his
decisions and behavior as a consumer.

APPLICATIONS OF CONSUMER
BEHAVIOUR
Analyzing Market Opportunity.
 Selecting the target Market.
 Determining the Product Mix.
 Use in non profit and social networking.
 CBRM UNIT1(PDF) PG 10

Pre-Purchase Process:
Need Recognition
Search for Information
Pre-Purchase Evaluation of Alternatives
Purchase
Consumption
Post-Consumption Evaluation
Divestment
Pre-Purchase Process:
Need Recognition
Search for Information
Pre-Purchase Evaluation of Alternatives
Purchase
Consumption
Post-Consumption Evaluation
Divestment
Pre-Purchase Process: Need Recognition
Memory
Need Recognition
Influences
Culture
Motivation
Social Class
Knowledge
Family
Attitude
Situation
Personality
Pre-Purchase Process: Search For Information
Culture
Social Class
Need Recognition
Family
Search
Situation
Motivation
Memory
Knowledge
Attitude
Personality
Pre-Purchase Process: Information Processing
Exposure
Attention
Comprehension
Acceptance
Retention
Exposure
Exposure is the first step of communication.
 Once exposure occurs one or more senses is
activated and preliminary processing begins.

Attention

After exposure, the next step is to allocate or not
allocate information processing capacity to the
incoming information.
Comprehension (understanding)

If attention is attracted the message is further
analyzed against categories of meaning stored in
memory.
Acceptance

Once comprehension occurs the message can be
accepted.
Retention

Finally new information to be accepted and
stored in memory.
Examples

Chocolate Chantico Increases Starbucks Appeal to
non coffee drinkers.

New product innovations can activate need
recognition by changing consumers desired state
(iPod).

Colgate Total advertisement activates selective
need recognition.

Colgate Total advertisement activates selective
need recognition.
Post-Purchase Process:
Dissonance
Nonuse
Purchase
Usage
Complaint
Evaluation
Satisfaction
Repeat
Purchase
Repeat
Purchase
Increased Use
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Post purchase dissonance is consumption guilt.
It occurs when negative emotions or guilt feelings are
aroused by the use of a product or a service.
For many products and services, the decision to purchase
and to consume are made simultaneously.
A person who orders a meal in a restaurant is also deciding
to eat the meal at that time. However a decision to
purchase food at a supermarket requires a second decision
to prepare and consume the food. Thus nonuse can occur
because the situation or the purchaser changes between
the purchase and the potential usage occasion.
Advertisements can encourage purchases, consumption of
previously purchased items, or both.
Perceived Performance
Relative to Expectation
Expectation Level
Below Desired
Performance
Above Desired
Performance
Better
Satisfaction
Satisfaction /
Commitment
Same
No satisfaction
Satisfaction
Worse
Dissatisfaction
Dissatisfaction
Determinants of Satisfaction & Dissatisfaction

Core Service Failure
◦ Dry cleaners ruined wedding dress.

Service encounter failure
◦ Heterogeneous services.
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Pricing
Inconvenience
Responses to service failure.
Attraction by Competitors.
Switching
Three types of Consumption Experiences
Positive Reinforcement
 Negative Reinforcement
 Punishment

POSITIVE REINFORCEMENT
Purchase Need
Product
Purchase
Product
Consumption
Positive Reinforcement
Receive
Positive
Outcomes
NEGATIVE REINFORCEMENT
Purchase
Need
Product
Purchase
Product
Consumption
Negative Reinforcement
Avoiding /
Reducing
PUNISHMENT
Purchase
Need
Product
Purchase
Punishment
Product
Consumption
Avoiding /
Reducing
Ethnography
Ethnography involves describing and
understanding consumer behavior by interviewing
and observing consumers in real world situations.
 Ethnographic techniques used by IDEO, a design
firm.
 Shadowing: Observing People using products,
shopping.
 Behavioral Mapping: Photographing people within
a space such as a hospital waiting room.

Ethnography
Consumer Journey: Keeping track of all the
interactions a consumer has with a product,
service or space
 Extreme user interviews: Talking to people who
really know or know nothing about a product or
service and evaluating their experience using it.

Post Consumption Evaluation
 It influences repeat buying.
 It shapes word of mouth.
High
Customer
Satisfaction
Low
Level of Price
High
Satisfaction
Product Performance
 Consumption Feeling
 Expectations.

CB - Model
Howard –Sheth Model. (PDF File)
 Nicosia Model. (Word File)
 Engel- Blackwell & Miniard Model. (Word
File)

Demographics
Demographics defined as the size, structure and
distribution of a population.
 According to David Foot “ Demographics explain
two thirds of everything. They help predict
which products will be in demand and which
type of crime can be expected to increase.”
 Marketers use demographic analysis in two
ways as Market Segment Descriptors and in
Trend Analysis.

Demographic Analysis & Social Policy
Demographic analysis is useful in analyzing policy
question related to Macro marketing, the
aggregate performance of marketing in society.
 Macro marketing evaluates marketing from
society’s perspective and seeks to understand the
consequences of marketing actions & transactions
in a society.
 How much food will be required to feed the
population of a country in the future? If tax cut is
proposed how will it affect consumer spending?
Should consumers be encouraged to buy
remarketed homes & cars instead of new.

Demographic Breakdown
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25 would be living on $ 1 a day.
47 would be living on $ 2 a day.
46 would live in urban area.
17 would live in substandard housing
41 would be without basic sanitation
14 would not be able to read
13 would be malnourished
4 would be internet users
8 would be personal computer users
2 would be college graduate.
How long will people live
Life expectancy has increased.
 Today white females have the longest life
expectancy at 79.9 years and black males the
shortest at 68.8 years.
 As people live longer the need for in home health
care , senior activity centers and special products
increases.

Occupation
Someone’s occupation provides status and income.
 Occupation is strongly associated with education
and income.
 The type of work one does and the type of
individual works with over time also directly
influence one’s values, lifestyle and all aspect of
consumption process.
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Occupation influence on consumption
% of Workers
Occupation Category
Males
Females
Professional, Technical related works
3.4
3.9
Administrative, Executive and managerial
1.3
0.2
Clerical
4.0
1.4
Sales Workers
7.0
1.7
Farmers, Fishing related works
63.8
81.3
Production & Related Works
17.4
9.0
Education
Education influences what one can purchase by
partially determining one’s income and
occupation.
 It also influences how one thinks make decisions
and relate to others.
 Families in the lower income categories are also
sending their children to school which to some
extent the growth in literacy.

Environmental: Culture
Culture provides people with a sense of identify
and understanding of acceptable behavior within
society.
 Characteristics influenced by culture:
1. Communication & Language
2. Dress & Appearance
3. Food Habits
4. Relationship (Family, organizations and so on)
5. Values & Norms
6. Beliefs & Attitudes
7. Work Habits & Practices

Influence of culture
Culture affect the need, search and alternative
evaluation stage of how individuals make purchase
decision in a variety of way.
 North American households used to contain one
television around which family members gathered
to watch live shows.
 Now consumers often buy several television for
one household and having television in bedroom,
kitchen has become the culture norm.

Influence of culture
Some wealthy consumers may think low price is
most important attribute not because they lack
money but because a culture value influence their
choice. A poor consumer may purchase an
expensive pair of shoes because of personal or
group values that persuade the individual to follow
a fashion trend, perhaps believing that other
people will regard them as part of higher social
status than might otherwise be conferred.
 (Income, Education, religious influence etc)

Cross Culture
McDonald’s adapts its products as appropriate
adding fried eggs to burgers in Japan and offering
Samurai Pork Burgers with a sweet barbecue
sauce in Thailand.
 Its most dramatic changes were made when it
entered India, instead of all-beef the menu
featured the mutton Maharaja Mac.
 McDonald’s also adapts its store layout ; separate
sections for families and singles are provided in
Muslim countries.
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