Consumer Behaviour Module-I

CONSUMER
BEHAVIOUR
MODULE-I
A. INTRODUCTION…
 “Consumer is the king”- is an important statement, everybody
knows. As because he is the person on whose decision, demand of
any product or service is dependent.
 And the study of consumer behaviour implies how and why a

particular consumer or groups react to decisions of producers.
 Definition:-
Consumer Behaviour is defined as-
“the behaviour that consumer display-
in searching for,
purchasing,
using,
evaluating and
disposing of-
products, services and ideas that will-
-satisfy their needs.
4
Study of CB…
 The study of consumer behaviour is concerned with learning

the specific meanings that products hold for consumers.
Or
 The study of consumer behaviour is concerned not only with
what consumers buy, but also with why they buy it, when, how
and where they buy it, also how often they buy it.
Or
 After study of consumer behaviour through market research or
otherwise manufacturer tries to find out how sales can be
pushed of existing products, what changes are required in
existing products, what changes are required to get larger
market share.
5
Buying roles at buying process…
 Generally, consumer plays five different roles at the time of buying,
such as-
- Initiator,
- Influencer,
- Decider,
- Buyer
- and User.
Types of Buying Behaviuor…
High Involvement Low Involvement 6
I. Complex II. Variety-

Variety-seeking
Significant Differences buying behaviour
Between Brands buying behaviour
Few Differences III. Dissonance-

Dissonance-reducing IV. Habitual
between Brands buying behaviour buying behaviour
Black box model of consumer
behaviour…
 This model is suggested by Phillip Kotler, which is an

input-output model to explain the buyer behaviour
/consumer behaviour. The inputs are the different
marketing stimuli/other stimuli and the outputs are the
buyer’s decision and the process is as the different
characteristics the buyer shows in his decision process.
8
The nature of consumer
Behaviour…
External Influences
DECISION
Culture PROCESS
Subculture Experiences & Acquisition
Demographics Problem
Social status Recognition
Reference groups.
Family
Information Search
Marketing Activities. SELF
CONCEPT
Alternative
AND Evaluation and
Internal Influences LIFE STYLE selection
Perception
Learning Outlet selection and
Motivation purchase
Attitudes
Personality
Emotions Experiences & Acquisition Post-purchase
Feelings Process
Beliefs
10
THE APPLICATION OF CONSUMER
BEHAVIOUR PRINCIPLES TO STRATEGIC
MARKETING:-
I. MARKET ANALYSIS
- COMPANY
-COMPETITORS
-CONDITIONS
-CONSUMERS
II. MARKET SEGMENTATION

V. OUTCOMES
-IDENTIFY PRODUCT RELATED -INDIVIDUAL
NEEDSETS. -FIRM
-GROUP CUSTOMERS WITH -SOCIETY
SIMILAR NEEDSETS
-DESCRIBE EACH GROUP
-SELECT ATTRACTIVE SEGMENTS
TO TARGET
IV. CUSTOMER DECISION PROCESS
- PROBLEM RECOGNITION
- INFORMATION SEARCH
- ALTERNATIVE SEARCH
III. MARKETING MIX STRATEGY
- PURCHASE
- PRODUCT, PRICE, PLACE AND - USE
PRICE RELATED DECISIONS - EVALUATION
11
WHAT IS MARKETING
STRATEGY?...
 A marketing strategy is the design, implementation and control of a
marketing plan to influence exchanges to achieve organizational
objectives.
 In consumer markets, marketing strategies are typically

designed to increase the chances that consumers will have
favourable thoughts and feelings about particular products, services
and brands.
 Marketing strategies involve developing and presenting

marketing stimuli directed at selected target markets to influence
what they think, how they felt and what they do?
 The applications of consumer behaviour focus on the

development, regulation or effects of marketing strategy.
12
Customer value…
 To survive in a competitive market, an organization must provide
target customers more value than is provided by its competitors.
 “Customer Value is the difference between all the benefits

derived from a total product and all the costs of acquiring these
benefits.”
 And providing superior customer value requires the organization

to do a better job of anticipating and reacting the customer needs
than the competition does.
OUR TOTAL OUTPUT
CONSUMER SUPERIOR VALUE PERCEIVED VALUE

DECISION EXPECTED SALES DELIVERED
PROCESS
COMPETITOR’S TOTAL
OUTPUT
CUSTOMER
SATISFACTION
13
Outcomes…
 Finally, the consumer behaviour principles are applied to different

outcomes such as-
i). Firm Outcomes: -

The most basic outcome of a firm is its product position (means an
image of the product/brand in the customer’s mind relative to
competitor’s brand/product).
Next outcome of a firm is sales – sales are a critical outcome, as they

produce the revenues necessary for the firm to continue in business.
The other outcome of a firm is customer satisfaction. Here a greater

understanding of consumer behaviour is essential. Because the firm has
to put stress upon two outcomes i.e. superior value expected by the
customer and perceived value delivered by the firm itself.
18
ii) Individual outcomes:-
- means the need satisfaction of individuals. Here two key

processes are involved such as- the actual need fulfillment and
the perceived need fulfillment.
iii) Society outcomes: - such as-
- The cumulative impact of consumer’s purchase decisions is a

major determinant of the state of a given country’s economy.
- Consumers make decisions that have a major impact on the
physical environments of both their own and other societies.
- Consumer decisions affect the general social welfare of a
society.
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B. CONSUMER DECISION MAKING
 What is a decision?
A decision is the selection of an opinion from two

or more alternative choices.
And for that, a choice of alternatives must be

available.
21
Levels of consumer decision-making…
 Extensive problem solving:-
When consumers have no established

criteria for evaluating a product category or
specific brands in that category or have not
narrowed the number of brands they will
consider to a small, manageable subset, their
decision making efforts can be classified as
extensive problem solving.
22
Extensive problem solving parameters
• Highly priced products

• Infrequent purchases
• More customer participation
• Unfamiliar Product Category
• Extensive research and time
 Limited Problem solving :
At this level, consumers already have

established the basic criteria for evaluating
the product category and the various
brands in the category.
 Routinized Response Behaviour :
At this level, consumers have experience

with the product category and well-
established set of criteria with which to
evaluate the brands they are considering.
23
Stages in the Buying decision
process…
 1). PROBLEM RECOGNITION
 2). INFORMATION SEARCH
 3). EVALUATION OFALTERNATIVES
 4). PURCHAGE DECISION
 5). POST-PURCHASE BEHAVIOUR
33
Factors Influencing Consumer Behavior:-
Personal
Social Age & Life- Psychological
Cultural Cycle Stage
Reference Motivation
Culture Groups Occupation Perception
Subculture Family Economic Learning
Social Class Roles & Situation
Status Beliefs &
Lifestyle Attitudes
Personality
& Self-
Concept
34

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CONSUMER

 And the study of consumer behaviour implies how and why a

 The study of consumer behaviour is concerned with learning

Types of Buying Behaviuor…

High Involvement Low Involvement 6

I. Complex II. Variety-

Few Differences III. Dissonance-

 This model is suggested by Phillip Kotler, which is an

II. MARKET SEGMENTATION

IV. CUSTOMER DECISION PROCESS

 In consumer markets, marketing strategies are typically

 Marketing strategies involve developing and presenting

 The applications of consumer behaviour focus on the

 “Customer Value is the difference between all the benefits

 And providing superior customer value requires the organization

CONSUMER SUPERIOR VALUE PERCEIVED VALUE

 Finally, the consumer behaviour principles are applied to different

i). Firm Outcomes: -

Next outcome of a firm is sales – sales are a critical outcome, as they

The other outcome of a firm is customer satisfaction. Here a greater

- means the need satisfaction of individuals. Here two key

iii) Society outcomes: - such as-

- The cumulative impact of consumer’s purchase decisions is a

A decision is the selection of an opinion from two

And for that, a choice of alternatives must be

 Extensive problem solving:-

When consumers have no established

• Highly priced products

At this level, consumers already have

 Routinized Response Behaviour :

At this level, consumers have experience

 1). PROBLEM RECOGNITION

 2). INFORMATION SEARCH

 3). EVALUATION OFALTERNATIVES

 4). PURCHAGE DECISION

 5). POST-PURCHASE BEHAVIOUR

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