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Introduction

As a consumer we are all unique and this uniqueness is reflected in the consumption pattern
and process of purchase. The study of consumer behaviour provides us with reasons why
consumers differ from one another in buying using products and services. We receive stimuli
from the environment and the specifics of the marketing strategies of different products and
services, and responds to these stimuli in terms of either buying or not buying product. In
between the stage of receiving the stimuli and responding to it, the consumer goes through
the process of making his decision.
Major Concepts in Marketing
A course in Consumer Behaviour uses certain terms repeatedly. It would be desirable
therefore that you learn their meaning from the beginning itself.
Needs and Wants
The satisfaction of buyers needs is at the heart of a market economy, and is the core theme of
Marketing. To put it more simply, a need is a feeling of being deprived of something
desirable.
You may be in a state in which you are not feeling satisfied (say you are feeling hungry). So
you visualizea more desirable (but unattained, yet) state, that of having a full stomach.
Hence there is a gap between your current state (hunger) and desirable state (satiated palate).
This gap leads to a need being felt. To take another example, if you had been happy with your
already attained qualifications, you would not have enrolled for this course!
Wants are somewhat different. While needs are basic to human beings, (since nobody ever
needs to tell us that we need to feel hungry, thirsty, etc.) wants are not. Later in our life when
we become part of various informal and formal groups (family, friends, school, club,
workplace, etc) we develop the concepts of friendship social approval, beauty, and so on.
These are our acquired needs. The product concept that adequately satisfies our biogenic or
acquired needs becomes successful. Infact the job of the marketer is to identify unfulfilled /
inadequately
fulfilled / partially fulfilled need. But then today a need can be met in a number of alternative
ways. A variety of products can satisfy the same need. Wants exist for those objects that can
potentially satisfy a need. A visually impaired person can either wear spectacles, contact
lenses, or now he can go in for corrective surgery.
At this point we must also note that a consumers behaviour is conditioned by the perception
about a marketers offering. This perception may or may not match reality. For example, in
India a common perception is that ready to eat food items lack that home touch; they are cold
and clinical. Home made foods in contrast are warm and live unless this perception is
changed, acceptance of such products is likely to be limited.

Consumer Focused Marketing


Once a marketer identifies an unfulfilled need, or partially fulfilled one, he has an opportunity
to exploit. To this end he has to determine the appropriate marketing mix. According to
Stanton: Marketing Mix is the term used to describe the combination of the four inputs that
constitute the core of a companys marketing system: the product, the price structure the
promotional activities, and the placement system. The marketer has to track the consumer
behaviour constantly and adjudge an optimal combination of these marketing mix factors so
that best sales are generated. Any mistake or delay can cost a marketer dear.

Product
We as customers view a product as a bundle of satisfaction and not merely the physical
object. We gives importance to both the tangible and intangible attributes of a product.
Intangibles provide psychological and social benefits for the buyer. If product attributes dont
benefit a customer, they have no significance for him. That is why during 2000-2001 midsize
cars had a better sales growth rate than smaller cars; Maruti-800 sales actually declined.
Branding
A firm brands its product to provide it a distinct identity. A brand carries brand equity, i.e.,
reputation. Losing brand equity means losing sales. For example, this happened to Limca at
the time of the BVO controversy.
Packaging

For the customer packaging is both a protective and a promotional device: Package is the
message, as it is called. Packaging facilitates brand identification and may even motivate a
person to buy a product (like perfume). It serves as a critical reminder at that critical moment
when the customer is choosing from among several competing brands. Infact whenever a
customer visualizes about a product, its packaging is the first thing that he sees in his mental
eyes.
As a test, just think about Pepsi or Coke right now. The first thing you will do is visualizing
the distinctive shape of the bottle!
Product Life Cycle
Like us human beings, products also take birth through introduction, develop (grow), age
(mature), and eventually decline (die). In the first phase, a newly developed product is
introduced in the market, which finds relatively few customers. If it is an innovative product
(say a perfumed fabric) then the marketer stimulates primary demand by educating the
customer.
In the growth stage, more and more customers start buying. But new brands also enter the
market. Hence the marketer has to talk about differentiating features of his brand.
In maturity the brand competes with other successful brands for selling in a stagnant market.
So price cuts, exchange offers or add-ons are used to woo the customers.
Communication is image based attempting to perfect and reinforce the brand loyalty. Finally,
many products face a phase of obsolescence. Some products may of course have a cyclical
demand pattern. They bounce back after a gap. For example, in 2001 larger frame sunglasses
have comeback. The marketer may even reformulate/reposition a product to begin a new life
like Dabur Honey or Milkmaid. On the other hand some products have a stillborn fate or
may die an infantile death, like Real Value Vacuumizer.
Pricing
Price has to be fixed in such a manner as on one hand it is lower or equal to the value
delivered by the product, and on the other hand it should cover at least all manufacturing and
post manufacturing (transportation, warehousing, promotional) costs plus the targeted level of
profit margin. Actual price fixing of course depends on the functional features of the product
and the image of the brand. Then there is the degree of competition that dictates the price of a
brand vis--vis its competing brands-. That is why you would find Pepsi and Coke priced at
same level.
Price can also act as a communication tool. For example price package may give the message
of affordability, exclusiveness, etc. Cartier watches, for example.
Placement
Physical distribution is the third dimension of marketing activity. Place convenience is
needed to make purchase. A marketer has to decide about two things: Keeping in mind

customers requirements, first, what will be the channel of distribution; and, second, how will
the goods be actually distributed.
Physical distribution activities are related to the movement of products from the production
site to purchase point. While the buyer must get it in right shape and at right time, the sender
should be able to ensure availability at minimum cost to him. The marketer can either sell
directly to the customers or through middlemen. A typical distribution chain could include
movement of product from manufacturer to wholesaler to retailer to customer.
Promotion
Promotion is also called marketing communication. It aims at informing and persuading the
customer to buy whatever the marketer is offering. Since a customer can be reached through a
number of channels, companies undertake integrated communication, which is a combination
of personal selling, advertising, public relations, and sales promotion.
Diversity in Market Place
We as consumers differ in age, gender, education, occupation, marital status, activities &
interests, preferences, opinions, foods they eat and products we buy.
There is diversity among marketers; not only among producers but also sellers. Traditional
retailers, mass merchandisers, discount stores, and off-price stores. But there has been a shift
from mass marketing to niche marketing to direct marketing, from custom catalogs to
television shopping to cyber shopping.
There is a great diversity in advertising media. In addition to the traditional broadcast and
print media, we have ethnic media within a great variety of alternative media.
Recognizing the high degree of diversity among us, consumer research seeks to identify the
constants that exist among the people of the world.
Figure 1.3 below shows us how consumers have changed over
three decades. In fact, you can see in your own family, if you
take your parents as buyers and yourself as a buyer and then see
the difference in your behaviour.

Factors
Influencing
Buyer
Behaviour
Whenever

we

buy anything our


final decision, as
a consumer will
definitely

be

affected

by

certain factors. Some of these major factors are as given below:


1. Cultural
2. Social
3. Personal
4. Psychological
The first stage of understanding buyer behaviour is to focus on the factors that determine he
buyer characteristics in the black box. These can be summarised as follows:

Each of these
factors

is

discussed

in

more detail in
our

other

revision

notes

on buyer behaviour. The marketer must be aware of these factors in order to develop an
appropriate marketing mix for its target market. Now lets take a brief look at the various
factors that we have mentioned above.
2.1 Cultural Factors
Culture is the most fundamental determinant of a persons want and behaviour. The growing
child acquires a set of values; perceptions, preferences and behaviour through a process of
socialization involving the family and other key institutions. Cultural factors have a
significant impact on customer behaviour. Marketing are always trying to spot cultural
shifts
which might point to new products that might be wanted by customers or to increased
demand.
For example, today there seems to be a cultural shift towards greater concern about health
and fitness and that has created opportunities, now even industries, servicing customers who
wish to buy products like:
Health foods
Fitness club memberships
Exercise equipment
Activity or health-related holidays etc.
Similarly our increased desire for leisure time has resulted in increased demand for
convenience products and services such as microwave ovens, washing machines, ready-to-eat
meals and direct marketing service businesses such as telephone banking

and insurance.
Each culture contains sub-cultures groups of people, which share values. Sub-cultures
can include nationalities, religions, racial groups, or groups of people sharing the same
geographical location. Sometimes a sub-culture will create a substantial and distinctive
market segment of its own.
For example, the youth culture or club culture has quite distinct values and buying
characteristics from the much older grey generation
Similarly, differences in social class can create customer groups. In fact, the social classes are
widely used to profile and predict different customer behaviour. Social class is not just
determined by income. It is measured as a combination of occupation, income, education,
wealth and other variables. Social Classes are relatively homogeneous and enduring divisions
in a society which are hierarchically ordered and whose members have
similar values, interests and behaviour.
Social Factors
A customers buying behaviour is also influenced by social factors, such as the groups to
which the customer belongs and social status. In a group, several individuals may interact to
influence the purchase decision. The typical roles in such a group decision can be
summarised as follows:
Initiator
The person who first suggests or thinks of the idea of buying a particular product or service
Influencer
A person whose view or advice influences the buying decision
Decider
The individual with the power and/or financial authority to make the ultimate choice
regarding which product to buy
Buyer
The person who concludes the transaction
User
The one who actually uses the product or service.
The family unit is usually considered to be the most important buying organisation in
society. It has been researched extensively. Marketers are particularly interested in the roles
and relative influence of the husband, wife and children on the purchase of a large variety of
products and services.
There is evidence that the traditional husband-wife buying roles are changing. Almost
everywhere in the world, the wife is traditionally the main buyer for the family, especially in
the areas of food, household products and clothing. However, with increasing numbers of
women in full-time work and many men becoming home workers (or telecommuting) the
traditional roles are reversing.
The challenge for a marketer is to understand how this might affect demand for products and
services and how the promotional mix needs to be changed to attract male rather than female

buyers. Consumer wants, learning, motives etc. are influenced by opinion leaders, persons
family, reference groups, social class and culture.
2.3 Personal
Personal factors are those factors, which are unique to a particular person including
demographic factors, Sex, Race, and Age etc.
Personal factors also include who in the family is responsible for the decision-making.
2.4 Psychological Factors
Psychological factors include:
MotivesA motive is an internal energizing force that orients a persons activities toward
satisfying a need or achieving a goal.
Actions are effected by a set of motives, not just one. If marketers can identify motives then
they can better develop a marketing mix.
MASLOW hierarchy of needs is the theory, which explains concept of motivation through
unfulfilled needs which could be any of the following:
Physiological
Safety
Love and Belonging
Esteem
Self Actualization
Need to determine what level of the hierarchy the consumers are at to determine what
motivates their purchases.
Perception
What do you see??
Perception is the process of selecting, organizing and interpreting information inputs to
produce meaning. This means we chose what info we pay attention to, organize it and
interpret it.
Information inputs are the sensations received through sight, taste, hearing, smell and touch.
Selective Exposure- This means we tend to select inputs to be exposed to our awareness. This
is more likely if it is linked to an event, and/or satisfies current needs.
Selective Distortion- This happens when we change or twist current received information,
which is inconsistent with our beliefs.
Selective Retention- In this case we remember only those inputs that support our beliefs, and
forget those that dont.
For instance, an average supermarket shopper is exposed to 17,000 products in a shopping
visit lasting 30 minutes-60% of purchases are unplanned and is also exposed to 1,500
advertisement
per day. Hence they cannot be expected to be aware of all these inputs, and certainly will not
retain many. Interpreting information is based on what is already familiar, on knowledge that
is stored in the memory.
Ability and Knowledge
Learning can be said to be changes in a persons behavior caused by information and
experience. Therefore to change consumers behavior about your product, you need to give

them new information regarding the product like free sample etc.mnWhen making buying
decisions, buyers must process information.
Knowledge is the familiarity with the product and expertise. Inexperience buyers often use
prices as an indicator of quality more than those who have knowledge of a product. Nonalcoholic Beer example: consumers chose the most expensive six-pack, because they assume
that the greater price indicates greater quality.
Learning is the process through which a relatively permanent change in behavior results from
the consequences of past behavior.
Attitudes
we can say that attitudes are knowledge and positive and negative feelings about an object or
activity. It maybe tangible or intangible, and living or non- living. Generally it seen that
attitudes drive perceptions We learn attitudes through experience and interaction with other
people. Consumer attitudes toward a firm and its products greatly influence the success or
failure of the firms marketing strategy.
For instance, Honda says, You meet the nicest people on a Honda, dispelling the unsavory
image of a motorbike rider, in the late 1950s. Changing market of the 1990s, baby boomers
aging, and Hondas market returning to hard core. To change this they have a new slogan
Come ride with us.Attitudes and attitude change are influenced by consumers personality
and lifestyle.
Again, we tend to screen information that conflicts with their attitudes and distort information
to make it consistent and selectively retain information that reinforces our attitudes. But, bear
in mind that there is a difference between attitude and intention to buy i.e., ability to buy.
Personality
One way of explaining personality is all those internal traits and behaviors that make a person
unique, keeping in mind the fact that uniqueness arrives from a persons heredity and
personal
experience. Examples include:
Workaholism
Compulsiveness
Self confidence
Friendliness
Adaptability
Ambitiousness
Dogmatism
Authoritarianism
Introversion
Extroversion
Aggressiveness
Competitiveness.
Traits affect the way people behave. Marketers try to match the store image to the perceived
image of their customers.
Lifestyles

You may have observed that recently trends in lifestyles are shifting towards personal
independence and individualism and a preference for a healthy, natural lifestyle. Lifestyles
are the consistent patterns people follow in their lives. For Example you buy healthy foods to
maintain a healthy lifestyle.