Unit no 1st Notes MBA 3rd Semester Consumer Behaviour

Topic: - Overview on Consumer Behaviour.

What is Consumer Behaviour - Meaning and Concepts?
Before understanding consumer behaviour let us first go through few more terminologies:

Who is a Consumer?
Any individual who purchases goods and services from the market for his/her end-use is
called a consumer.

In simpler words a consumer is one who consumes goods and services available in the
market.

Example - Tom might purchase a tricycle for his son or Mike might buy a shirt for himself. In
the above examples, both Tom and Mike are consumers.

What is consumer Interest?

Every customer shows inclination towards particular products and services. Consumer
interest is nothing but willingness of consumers to purchase products and services as per their
taste, need and of course pocket.

Let us go through the following example:

Both Maria and Sandra went to the nearby shopping mall to buy dresses for themselves. The
store manager showed them the best dresses available with him. Maria immediately
purchased two dresses but Sandra returned home empty handed. The dresses were little too
expensive for Sandra and she preferred simple and subtle designs as compared to designer
wears available at the store.

In the above example Sandra and Maria had similar requirements but there was a huge
difference in their taste, mind set and ability to spend.

What is Consumer Behaviour?

Consumer Behaviour is a branch which deals with the various stages a consumer goes
through before purchasing products or services for his end use.

Why do you think an individual buys a product?

 Need
 Social Status
 Gifting Purpose

Why do you think an individual does not buy a product?

 No requirement
 Income/Budget/Financial constraints
 Taste
When do you think consumers purchase products?

 Festive season
 Birthday
 Anniversary
 Marriage or other special occasions

There are in fact several factors which influence buying decision of a consumer ranging from
psychological, social, and economic and so on.

The study of consumer behaviour explains as to:

 Why and why not a consumer buys a product?

 When a consumer buys a product?
 How a consumer buys a product?

During Christmas, the buying tendencies of consumers increase as compared to other months.
In the same way during Valentines week, individuals are often seen purchasing gifts for their
partners. Fluctuations in the financial markets and recession decrease the buying capacity of
individuals.

In a layman’s language consumer behaviour deals with the buying behaviour of individuals.

The main catalyst which triggers the buying decision of an individual is need for a particular
product/service. Consumers purchase products and services as and when need arises.

According to Belch and Belch, whenever need arises; a consumer searches for several
information which would help him in his purchase.

Following are the sources of information:

 Personal Sources
 Commercial Sources
 Public Sources
 Personal Experience

Perception also plays an important role in influencing the buying decision of consumers.

Buying decisions of consumers also depend on the following factors:

 Messages, advertisements, promotional materials, a consumer goes through also

called selective exposure.
 Not all promotional materials and advertisements excite a consumer. A consumer
does not pay attention to everything he sees. He is interested in only what he wants to
see. Such behaviour is called selective attention.
 Consumer interpretation refers to how an individual perceives a particular message.
 A consumer would certainly buy something which appeals him the most. He would
remember the most relevant and meaningful message also called as selective
retention. He would obviously not remember something which has nothing to do
with his need.
Relationship between Consumer Behaviour in Marketing
Consumer Behaviour refers to the study of buying tendencies of consumers. An individual
who goes for shopping does not necessarily end up buying products. There are several stages
a consumer goes through before he finally picks up things available in the market. Various
factors, be it cultural, social, personal or psychological influence the buying decision of
individuals.

Marketers need to understand the buying behaviour of consumers for their products to do
well. It is really important for marketers to understand what prompts a consumer to
purchase a particular product and what stops him from buying.

What marketers need to understand?

The psychology of consumers (what they feel about a particular product and their brand on
the whole).

How consumers are influenced by their immediate surroundings, family members, friends,
co-workers and so on.

What a consumer thinks when he goes out for shopping?

A marketer needs to first identify his target consumers and understand their lifestyles,
psychologies, income, spending capabilities, mentalities to offer them the right product.

Individuals from lower income group would never be interested in buying expensive and
luxurious products. He would first fulfil his basic physiological needs like food, air, water
etc. Trying to sell a Mercedes or a Radio watch to someone who finds it difficult to make
ends meet would definitely be a disaster.

Kellogg’s K special would hardly find any takers in the low income group. In this segment,
individuals would be more interested in buying fresh fruits, vegetables, pulses which are
necessary for their survival rather than spending on health supplements.

It is really essential for the marketers to understand the needs of consumers. Find out what
they are actually looking for?

There are ideally two different ways which enable marketers to understand their consumers.

 Primary Research
 Secondary Research

Primary Research - Primary Research refers to a research methodology where marketers

interact with consumers directly and gather as much information as they can. Information is
generally collected through surveys, questionnaires, feedback forms, interviews etc.

Secondary Research - Secondary Research often refers to relying on information which has
been collected by others at some point of time.

The background and family status of an individual also influence his/her buying behaviour.
Selling a laptop to an individual who is not much educated would be pointless. Remember
consumers would show interest in your products only if they are of any use to them or their
immediate family members. A low grade worker would never be interested in purchasing
business suits or formal shirts.

Canned juices are a hit among middle and higher income group where individuals are really
conscious about their health and fitness. Individuals who live hand to mouth would never
spend on sugar free tablets, health supplements, or for that matter “Diet Coke”.

It is also important to give complete information to end-users. Do not hide anything from
them. It is not ethical. All tobacco products come with a warning. Individuals should be
familiar with not only the benefits but also the side effects of the products.

Marketers must also take into account:

 Age group of consumers

 Geographical location
 Lifestyle of consumers
 Social Status of consumers

Funky designs, loud colours would be a hit among teenagers whereas middle aged and
elderly people would prefer subtle colours and sophisticated designs.

Salwar Suits are extremely popular in North India whereas females prefer saris and skirt
blouses in eastern and southern parts of India.

Individuals from posh localities and good jobs would show keen interest towards buying
exclusive and unique products as compared to individuals who do not come from an affluent
background.

Nature of Consumer Behaviour

1. Complex Nature: Since every individual has different needs and desires, and marketers
have to target customers as per their needs. Therefore, it becomes a complex task for the
marketers to find the pattern of every individual.

2. Varies for different consumers: Different consumers have different needs and desires.
Hence, it is impossible for marketers to target each and every consumer for their products.
Therefore, Marketers try to identify their target consumers for the products and services.
 
3. Dynamic Nature: The behaviour and mentality of each consumer evolves with the time.
Therefore, the marketers may find any potential customer for their products and services who
once hated them.

4. Influenced by various factors: Consumer behaviour is also influenced by certain factors

like friends, family, culture, lifestyle etc.
EX: People promoting different products among their peers due to the satisfaction they
achieved by using it.

5. Important for Marketers: Consumer Behaviour is very important for marketers as they

have to develop their products as per the behaviour of consumers that whether they are
willing to purchase it or not.

6. Brand Loyalty: Consumers have a tendency to buy products and services from a certain
organization which they may like due to certain reasons. They develop a brand loyalty
towards these organizations and tends to buy only their products even if their rival is
performing better in the market.

Scope of Consumer Behaviour

1. Demand Forecasting:  Marketers can estimate the demand of their product if they know
how would a consumer behave and react after seeing their product. 
 
2. Marketing: Consumer Behaviour helps to identify the need, expectations and problems of
the consumers. Therefore, they can easily build the product having those functions which the
consumers exactly want.

3. Advertising: Different consumers may have different opinions and reactions on certain

form of advertisement. Therefore, Marketers can target the customers with most prominent
form of advertisement as per their behaviour.

4. Human Behaviour: If marketers are aware about the human behaviour of their consumers
and which factors influence their behaviour, then they can make their product 100%
compatible with the requirement of consumer.
              

Significance of Consumer Behaviour

 1. Implementation of the marketing concept: Consumer behaviour helps to implement the

modern marketing concept. The Modern marketing concept is customer driven which focuses
on solving the problems of customers and satisfying their needs. Consumer behaviour
identifies the same problems and needs and hence, helps is developing the product as per
customer requirement.
 
2. Planning product differentiation and Market Segmentation: After identification of
consumer behaviour, the product developed will the only one of its kind, because it has been
developed through proper research and consumer behaviour analysis, so the product will
automatically be different from all the products available in the market while satisfying the
consumer needs.
Again, to divide the target market into different segments to focus better on different
consumers, proper study of consumer behaviour is necessary.
 
3. Selection of distribution channels: Consumer Behaviour Analysis not only tells what
consumers want to buy but also from where they prefer to buy.
There may be different categories of consumers. First category only shops online, Second
category only want products from prestigious offline stores and the third category may settle
for the ordinary stores. Therefore, consumer behaviour also inform us how much we should
focus on a certain distribution channel. 
4. Designing promotional techniques: Promotional techniques include advertisement
messages, media, direct selling, online selling etc. Proper study of consumer behaviour will
show the psychology of consumer towards different promotional formats. It will tell how
much a consumers is influenced from a certain form of advertisement and promotion.