Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

Consumer Behaviour
Introduction
All of us are consumers. We consume things of daily use; we also consume and buy these products according to our needs, preferences and buying power. These can be consumable goods, durable goods, specialty goods or, industrial goods. What we buy, how we buy, where and when we buy, in how much quantity we buy depends on our perception, self concept, social and cultural background and our age and family cycle, our attitudes, beliefs values, motivation, personality, social class and many other factors that are both internal and external to us. While buying, we also consider whether to buy or not to buy and, from which source or seller to buy. In some societies, there is a lot of affluence and, these societies can afford to buy in greater quantities and at shorter intervals. In poor societies, the consumer can barely meet his barest needs. The marketer therefore tries to understand the needs of different consumers and having understood his different behaviours, which require

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

an in-depth study of their internal and external environment, they formulate their plans for marketing.

Management is the youngest of sciences and oldest of arts and consumer behaviour in management is a very young discipline. Various scholars and academicians concentrated on it at a much later stage. It was during the 1950s, that marketing concept developed, and thus the need to study the behaviour of consumers was recognized. Marketing starts with the needs of the customer and ends with his satisfaction. When everything revolves round the customer, then the study of consumer behaviour becomes a necessity. It starts with the buying of goods. Goods can be bought individually, or in groups. Goods can be bought under stress (to satisfy an immediate need), for comfort and luxury in small quantities or in bulk. For all this, exchange is required. This exchange is usually between the seller and the buyer. It can also be between consumers. Consumer behaviour can be defined as the decision-making process and physical activity involved in acquiring, evaluating, using and disposing of goods and services. This definition clearly brings out that it is not just the

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

buying of goods/services that receives attention in consumer behaviour but the process starts much before the goods have been acquired or bought. A process of buying starts in the minds of the consumer, which leads to the finding of alternatives between products that can be acquired with their relative advantages and disadvantages. This leads to internal and external research. Then follows a process of decisionmaking for purchase and using the goods, and then the post purchase behaviour which is also very important, because it gives a clue to the marketers whether his product has been a success or not.

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

Meaning / Concept of Consumer Behaviour:The term consumer behaviour is defined as the behaviour that consumer display in searching for purchasing, using, evaluating and disposing of product and services that they expect will satisfy their needs. Consumer behaviour focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption related items. This includes what they buy, why they buy it, when they buy it, where they buy it, how often they buy it, how often they use it, how they evaluate it after the purchase and the impact of such evaluation on future, and how they dispose of it. In another words, consumer behaviour can be define as the behaviour of individuals in regards to acquiring, using, and disposing of products, services, ideas or experiences. Consumer behaviour also includes the acquisition and use of information. Thus, communication with consumers and receiving feedback for them is a crucial part of consumer behaviour, which is of great interest to marketers.

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

Definition of Consumer Behaviour:We define consumer behaviour as the mental and physical activities undertaken by consumers to acquire and consumer products to fulfill their needs and wants. Our definition of consumer behaviour has several elements worth noting. Let us discuss these one by one.

Mental and Physical Activities

First, consumer behaviour includes both mental and physical activities. Mental activities are acts of the mind, and they relate to what we think, feel, and know about products. Physical activities are, in contrast, acts of the human body, and they relate to what we physically do to acquire and consume products.

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

Features/Nature of consumer behaviour:(1) Consumer behaviour involves individual aspect as well as social aspect. It is generally a purposive, decisionmaking process. (2) It is reflected through satisfaction or dissatisfaction on the part of consumers after actual purchase of product. (3) Consumer behaviour is the result of interaction of consumer with the environmental forces. The buyer behaviour is influenced by the buyers environment. (4) Consumer behaviour is the net result of various external/environmental factors. Such factors are mainly social and psychological in character. (5) Consumer behaviour of includes consumer behaviour goods, of

consumers/buyers

consumer

durables and industrial products. Organizational buying behaviour also comes within the scope of consumer behaviour. (6) Consumer behaviour is always uncertain as the thinking process in human mind is uncertain.

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

(7) Consumer behaviour gives answer to various questions such as why, what and how consumers purchase goods and services. (8) Study of consumer behaviour is a must in the case of marketing of goods and services as such study brings success to marketing efforts.
(9)

Consumer buying behaviour is a challenge and an opportunity to a market. Large-scale marketing is possible only when consumer behaviour is anticipated accurately.

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

Factors Affecting Consumer Behaviour:Consumer behaviour refers to the selection, purchase and consumption of goods and services for the satisfaction of their wants. There are different processes involved in the consumer behaviour. Initially the consumer tries to find what commodities he would like to consume, then he selects only those commodities that promise greater utility. After selecting the commodities, the consumer makes an estimate of the available money, which he can spend. Lastly, the consumer analyzes the prevailing prices of commodities and takes the decision about the commodities he should consume. Meanwhile, there are various other factors influencing the purchases of consumer such as social, cultural, personal and psychological. The explanation of these factors is given below.

1. Cultural Factors
Consumer behaviour is deeply influenced by cultural factors such as buyer culture, subculture, and social class.

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

a. Culture
Basically, culture is the part of every society and is the important cause of person wants and behaviour. The influence of culture on buying behaviour varies from country to country therefore; marketers have to be very careful in analyzing the culture of different groups, regions or even countries.

b. Subculture
Each culture contains different subcultures such as religions, nationalities, geographic regions, racial groups etc. Marketers can use these groups by segmenting the market into various small portions. For example, marketers can design products according to the needs of a particular geographic group.

c. Social Class
Every society possesses some form of social class, which is important to the marketers because the buying behaviour of people in a given social class is similar. In this way, marketing activities could be tailored according to different social classes. Here we should note that social class is not only

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

determined by income but there are various other factors as well such as wealth, education, occupation etc.

2. Social Factors
Social factors also impact the buying behaviour of consumers. The important social factors are reference groups, family, role and status.

a. Reference Groups
Reference groups have potential in forming a person attitude or behaviour. The impact of reference groups varies across products and brands. For example if the product is visible such as dress, shoes, car etc then the influence of reference groups will be high. Reference groups also include opinion leader (a person who influences other because of his special skill, knowledge or other characteristics).

b. Family
Buyer behaviour is strongly influenced by the member of a family. Therefore, marketers are trying to find the roles and influence of the husband, wife and children. If the buying

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

decision of a particular product is influenced by wife then the marketers will try to target the women in their advertisement. Here we should note that buying roles change with change in consumer lifestyles.

c. Roles and Status

Each person possesses different roles and status in the society depending upon the groups, clubs, family,

organization etc. to which he belongs. For example, a woman is working in an organization as finance manager. Now she is playing two roles, one of finance manager and other of mother. Therefore, her buying decisions will be influenced by her role and status.

3. Personal Factors
Personal factors can also affect the consumer behaviour. Some of the important personal factors that influence the buying behaviour are lifestyle, economic situation, occupation, age, personality and self-concept.

a. Age and life cycle

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

Age and life cycle have potential impact on the consumer buying behaviour. It is obvious that the consumers change the purchase of goods and services with the passage of time. Family life cycle consists of different stages such young singles, married couples, unmarried couples etc, which help marketers to develop appropriate products for each stage.

b. Occupation
The occupation of a person has significant impact on his buying behaviour. For example, a marketing manager of an organization will try to purchase business suits, whereas a low-level worker in the same organization will purchase rugged work clothes.

c. Economic Situation
Consumer economic situation has great influence on his buying behaviour. If the income and savings of a customer is high then he will purchase more expensive products. On the other hand, a person with low income and savings will purchase inexpensive products.

d. Lifestyle

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

Lifestyle of customers is another import factor affecting the consumer buying behaviour. Lifestyle refers to the way a person lives in a society and is expressed by the things in his/her surroundings. It is determined by customer interests, opinions, activities etc and shapes his whole pattern of acting and interacting in the world.

e. Personality and self concept

Personality changes from person to person, time to time and place to place. Therefore, it can greatly influence the buying behaviour of customers. Actually, Personality is not what one wears; rather it is the totality of behaviour of a man in different circumstances. It has different characteristics such as dominance, aggressiveness, self-confidence etc which can be useful to determine the consumer behaviour for particular product or service.

4. Psychological Factors
There are four important psychological factors affecting the consumer buying behaviour. These are perception,

motivation, learning, beliefs and attitudes.

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

a. Motivation
The level of motivation also affects the buying behaviour of customers. Every person has different needs such as physiological needs, biological needs, social needs etc. The nature of the needs is that, some of them are most pressing while others are least pressing. Therefore, a need becomes a motive when it is more pressing to direct the person to seek satisfaction.

b. Perception
Selecting, organizing and interpreting information in a way to produce a meaningful experience of the world is called perception. There are three different perceptual processes, which are selective attention, selective distortion and selective retention. In case of selective attention, marketers try to attract the customer attention. Whereas, in case of selective distortion, customers try to interpret the information in a way that will support what the customers already believe. Similarly, in case of selective retention, marketers try to retain information that supports their beliefs.

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

c. learning:
Learning relates to changes in individual behaviour that are caused by information and experience e.g., when a consumer buys a car and is satisfied with its performance, he will recommend this brand to others also. Through learning people shape their beliefs and attitudes.

d. beliefs:
Beliefs are based on knowledge, opinion, faith and

confidence. It is a descriptive thought that a person holds about certain things. Brand image is the result of beliefs, which eventually influences buying behaviour.

e. attitude:
An attitude is a persons favourable or unfavourable evaluation of a product/service. Attitude develops over a period of time. It is long lasting. Attitude influences buying behaviour of consumers e.g., a consumer having positive attitude will spend on luxuries because he considers it as an investment whereas another consumer may consider it waste of money.

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

The forces noted above are external force but they influence consumer behaviour considerably. The marketer has to consider his product and the satisfaction it offers to consumers. In addition, he has to see that his product is as per modern culture and life style. The marketer has to consider the social and cultural influences on consumers while designing his marketing strategy.

5. Economic Factors
Economic factors such as income and purchasing power affect buyer behaviour. A rich buyer may not be very alert about the price and may purchase a product with high price. A person from low-income group will be very sensitive/alert about the price and may not purchase the product even with limited price rise. The middle class buyers prefer to collect information on price from different sources and take appropriate buying decision. Buyer behaviour affected due to high or low purchasing power. Economic factors include:

a. Disposable Personal Income:

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

It refers to the money at the disposal of the consumer to spend e.g., in a small family where every member is earning the consumer will have higher disposable personal income. As against this where only one person is working and there are many more mouths to be fed, disposable personal income will be low.

b. Size of Family:
A small family is a happy family. It is possible to provide better quality life to the family members. In case of a large sized family demands are too many and economic means to satisfy them are highly restricted. The result is presence of dissatisfied needs.

c. Propensity to consume and save:

Saving for rainy days always helps the consumer. It does not mean he is not going to spend. He will lead his life within his source of income but make it a point to save. He strikes a balance between consumption and saving.

d. Consumer credit:

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

Availability of credit, other things remaining the same, improves the purchasing power of the consumers. They can look forward to possessing several things that ordinarily would have remained outside their reach such as house or car.

e. Discretionary income:
It refers to availability of additional income, which improves the economic status of a consumer. In order to have it, the consumer is required to put in extra efforts. Certainly, his economic status improves.

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

Buyer behaviour - The decision-making process

How do customers buy? Research suggests that customers go through a five-stage decision-making process in any purchase. This is summarized In the diagram below:

This model is important for anyone making marketing decisions. It forces the marketer to consider the whole buying

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

process rather than just the purchase decision (when it may be too late for a business to influence the choice!) The model implies that customers pass through all stages in every purchase. However, in more routine purchases, customers often skip or reverse some of the stages. For example, a student buying a favourite hamburger would recognize the need (hunger) and go right to the purchase decision, skipping information search and evaluation.

However, the model is very useful when it comes to understanding any purchase that requires some thought and deliberation. The buying process starts with need recognition. At this stage, the buyer recognizes a problem or need (e.g. I am hungry, we need a new sofa, I have a headache) or responds to a marketing stimulus (e.g. you pass Starbucks and are attracted by the aroma of coffee and chocolate muffins). An aroused customer then needs to decide how much information (if any) is required. If the need is strong and there is a product or service that meets the need close to hand,

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

then a purchase decision is likely to be made there and then. If not, then the process of information search begins. A customer can obtain information from several sources: Personal sources: family, friends, neighbors etc

Commercial sources: advertising; salespeople; retailers; dealers; packaging; point-of-sale displays Public sources: newspapers, radio, television, consumer organizations; specialist magazines Experiential sources: handling, examining, using the product The usefulness and influence of these sources of information will vary by product and by customer. Research suggests that customers value and respect personal sources more than commercial sources (the influence of word of mouth). The challenge for the marketing team is to identify which information sources are most influential in their target markets. In the evaluation stage, the customer must choose between the alternative brands, products and services.

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

How does the customer use the information obtained?

An important determinant of the extent of evaluation is whether the customer feels involved in the product. By involvement, we mean the degree of perceived relevance and personal importance that accompanies the choice. Where a purchase is highly involving, the customer is likely to carry out extensive evaluation. High-involvement purchases include those involving high expenditure or personal risk for example buying a house, a car or making investments. Low involvement purchases (e.g. buying a soft drink, choosing some breakfast cereals in the supermarket) have very simple evaluation processes.

Why should a marketer need to understand the customer evaluation process?

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

The answer lies in the kind of information that the marketing team needs to provide customers in different buying situations. In high-involvement decisions, the marketer needs to provide a good deal of information about the positive consequences of buying. The sales force may need to stress the important attributes of the product, the advantages compared with the competition; and maybe even encourage trial or sampling of the product in the hope of securing the sale. Post-purchase evaluation - Cognitive Dissonance The final stage is the post-purchase evaluation of the decision. It is common for customers to experience concerns after making a purchase decision. This arises from a concept that is known as cognitive dissonance. The customer, having bought a product, may feel that an alternative would have been preferable. In these circumstances, that customer will not repurchase immediately, but is likely to switch brands next time.

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

Case study
Tata Nano: Consumers' Post-Purchase Behaviour
Abstract:
Hundred years ago, when Henry Ford unveiled Model T in US as the peoples car, many a company followed suit. Incidentally, after a century, history repeated itself when Ratan N. Tata (Ratan Tata), chairman of Tata Sons, the promoter company of the Tata group, announced his longcherished dream to produce the worlds cheapest car, Tata Nano, at an amazing price of INR 1lakh.

Introduction:
As Tata Nano vroomed to the customers on March 23rd 2009, few questions arose: How are the consumers receiving it? Has the dream of Ratan Tata come true? Set in early 2010, this case study focuses on the post-purchase behaviour of Tata Nano buyers. The post-purchase perceptions,

dissonance levels and moments of pride have been analysed with the help of primary data collected through video interviews conducted among 8 customers of Tata Nano in

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

Hyderabad, India, in mid-January 2010. The case study runs in the backdrop of the conceptualization of the Tata Nano car and the roadblocks that cropped up during its production. This case study, primarily positioned to discuss the dissonance levels in new products, offers valuable insights.

Pedagogical Objectives:

To understand the conceptualization of Nano car as the worlds cheapest car by Tata Motors and analyse the causes and concerns in taking the car from drawing board to board room to the shop floor

To understand the bottlenecks involved in the production of Tata Nano and critically examine the influence of those bottlenecks on the buying behaviour of the customers while purchasing Tata Nano, as well as on the brand Tata and its impact on the brand loyalty thereof

To raise a general debate on addressing all the possible cognitive dissonance touch points in the case of new products launched by either an existing and established company or a new company.

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management

Bibliography
Title Consumer Behaviour Author Atul Kr. Sharma Publisher Global Vision Publishing Ho,

2006ISBN8182201861, MHRM N.G. Kale, M. Ahmed

9788182201866Length183

pages Subjects Consumer behavior

Weblography
http://www.ehow.com/about_5162253_definitionconsumer-behavior.html#ixzz221r0k179 http://www.ehow.com/about_5162253_definitionconsumer-behavior.html http://www.aipmm.com/html/newsletter/archives/000434. php http://tutor2u.net/business/marketing/buying_decision_pr ocess.asp http://en.wikipedia.org/wiki/Buyer_decision_processes