Principles of Marketing | Richa Saxena
SESSION 7
INTRODUCTION TO
CONSUMER
BEHAVIOUR
Applied Marketing 7.1: Changing Consumer Needs
A new study which shows the interaction of
online and offline shopping platforms in a
consumer’s purchase journey, revealed that
the lines between online and offline shopper’s
behaviours are blurring. The study, conducted
by Google, in association
with research firm IPSOS attempts to
understand the impact of growing Internet
penetration and changes in buying behaviour
of shoppers in India.
The report was compiled by IPSOS after
speaking to a total of 6600 recent shoppers
covering 4 metros and 4 non metro cities,
NCCS A to C (New Consume Classification
system, used to classify households in India. It
classifies households on two variables -
education of the chief wage earner and the
number of consumer durables owned by the
household from a predefined list) men and
women of various age groups to have an
adequate representation of the Indian urban
shopper. A range of categories ranging from a
very frequently bought category like apparel
to a category bought once in a couple years like
computer were covered. Apparel (men and
women separately), accessories (watches,
sunglasses and jewellery), skin care, baby
care, make up, home decor and computer were
covered.
Urban offline shoppers are using the Internet
in varied ways for all their product purchases,
including researching online when they are at
an offline store influencing their final
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purchase decision. The new Google study
titled ‘Shopper Path-2-Purchase’ compiled by
IPSOS reveals four distinct stages in the
urban Indian shopper’s purchase – trigger,
pre-purchase, in-store, and post purchase. All
four stages see interaction with online
platforms.
The trigger stage includes the moment when
the consumer is inspired or motivated to make
a purchase. This is even before the research
stage. The trigger stage is essentially the
dreaming stage where the intent to buy is
established. This could be because the
consumer saw a product while consuming
some online content, or they saw an
advertisement about it.
The report reveals that in the pre-purchase
phase the internet is now established as a
natural go to place for any kind of information
needs of the users. Moreover, this behaviour is
now also consistent for offline shoppers even
for smaller value product categories, a distinct
shift from research online and buy offline
behaviour that was seen for mainly high value
product categories just a few years ago.
The report underlines that the online habit
has been already created, even for the offline
shopper and they are now going online to find
information even when they’re in store before
making the final purchase. In the pre-
purchase phase, for example, 55% urban
offline shoppers turn to digital in the case of
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Home decor or baby care and 62% in the case
of men’s apparel.
The report highlights that the in-store
purchase phase is an extension of the
exploration during the pre-purchase phase
where offline shoppers engage with different
touch-points for further verification and
validation. In-store cues like visual
merchandising, point of sales material and
promotion definitely have an impact on offline
purchase decision, but shoppers continue to
compare prices, explore discounts and
promotional offers for their chosen product via
online touch points while in-store. The
internet is also leveraged to gain further
information or validate for new inputs
| Richa Saxena
received at the store.
The report says that 40% urban Indian
shoppers look up information while in the
store making a purchase. This could range
from checking reviews of a product to finding
a better deal elsewhere. This means that
marketers have now started incorporating a
digital element in their layouts. For example,
a lot of stores now come equipped with tablets
that allow the shopper to compare prices. In
the post-purchase stage, shoppers tend to
share their experience about the product
(review) online. According to the report, 1 in 3
shoppers is seen engaging with the category
online after making a purchase (Malvania,
Urvi@ET Brand Equity, 2019).

Marketing Deals with Maintaining Profitable

Customer Relationships
Changes in environmental factors hugely influence consumers. Hence all marketing strategies are
designed keeping in mind what the consumers wants, when do they want and how do they want.
Study of consumer behaviour helps marketer in understanding different needs and wants and acts
as an important basis for segmentation.

Consumer buyer behaviour is study of how individuals, groups and organizations

select, buy, use and dispose of goods, services, ides or experiences to satisfy their
needs and wants

The study of consumer behaviour is crucial for planning marketing strategy (Kotler & Keller, 2018).
Not all consumers have same approach towards buying. We have already discussed about different
types and levels of needs. These differences results in different buying approaches. For example, in
some parts of India, washing machine is even used for making milk products like lassi and butter.

The study of consumer behaviour is important as unlike traditional approach to marketing, modern
marketers focus on product’s customer perceived value, as well as the need it satisfies (Schiffman,
Kanuk, & Kumar, 2014, p. 14). Marketers, therefore aims at meeting needs and make products
around them.

Q 7.1 What are consumers really purchasing when they buy the following five items?
(a) A pair of sneakers
(b) Lipsticks
(c) A life insurance policy
(d) A MG Hector Car
(e) Levis jeans

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Factors Affecting Consumer Behaviour

Holistic marketing orientation requires complete understanding of customers – gaining a 3600 view
of both their daily lives and changes occur during their lifetime so the right products are always
marketed to the right consumers in the right way.

Consumers buying perspective is affected by variety of factors. As individuals, they have different
income, tastes, preferences, needs, situations, cultures and beliefs. Thus, it is imperative for
marketers to study and identify factors that constitute and influence buying behaviour as they offer
product and services to these individuals.

Figure 7. 1 Factors affecting Consumer Behaviour

Cultural Factors
Culture is the most basic cause of a person’s wants and behaviour. Culture is the set of basic values,
perceptions, wants, and behaviour from family and other important
institutions. These are the norms and values carried forward by
generations and are distinctive from one entity to the other.

Culture is an outcome of learned norms and beliefs, but it is affected

by a person’s exposure with outside world.

Usually, the impact of culture is so natural and automatic that it

influences on behaviour is usually taken for granted. ING Vasya Bank
highlights the culture of “shagun” in India. Culture is learned from
our social environment as a set of belief. Marketing, also influences
cultural learning by providing the audiences with a model behaviour
Picture 7. 1 McDonalds in India
to imitate. In today’s world internet and mobile communication has
made culture very dynamic and fraternised. It is dynamic because it is highly influenced by others
and fraternise because it is hobnobbing and accommodating. For example - adaptation of fast food
culture in India.

To acquire a common culture, the members of a society must be able to communicate with each other
through a common language. To communicate effectively with their audiences, marketers use

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symbols, rituals and associated artifacts. To fulfil need gratifying role, culture continuously must
evolve if it is to function in the best interest of society (Schiffman, Kanuk, & Kumar, 2014).

Markers must closely attend to cultural values in every country to understand how to best market
their existing products and find opportunities for new products (Kotler & Keller, 2018, p. 167).

Q 7.2 Describe how a television series that you watched recently, transmitted cultural
beliefs, values, and customs.

Subcultures are groups of people with shared

value systems based on common life experiences
and situations. Some of the important bases of
subcultures are different nationalities, religions
and locations. In a country like India, where there
are number of religions, many products,
especially those linked with religious rituals and
festivals are targeted at these subcultures. For
example, sale during holy month of Ramadan,
special offers during Diwali and so on. Picture 7. 2 Lancome Marketing to subcultures
Geographic regions also give rise to distinctive
subcultures. Thus, Bengali, Gujarati, and Punjabi people (to name a few) form apparent subcultures
in India. Several products are offered to cater to the needs of individual subcultures.

Rural-urban differences are also immense in India.

Q7.3 Discuss the importance of subcultural segmentation to marketers of food products.

Explain why and how the marketing for food products should be varied across geographic
areas of India. (Take any four regions).

Social Classes are society’s relatively homogenous and enduring divisions in a society, hieratically
ordered and within members who share similar values, interests, and behaviours. Virtually, all
human societies exhibit social stratification in the form of relatively homogenous and enduring
divisions in a society. Social class is determined by combination of occupation, income, education,
wealth, and other variables.

Social Factors
A person’s behaviour is influenced by many small groups.

Reference groups are groups that form a

comparison or reference in forming attitudes or
behaviour. These are the strong source of
influence in buying behaviour. Groups having
direct influences are called membership groups.
Some of these are primary groups with whom the
person interacts fairly continuously and
informally, such as family, friends, neighbours,
and co-workers. People also belong to secondary
Picture 7. 3 Airtel focuses on group behaviour
groups, such as religious, professional, and
trade-

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 Principles of Marketing | Richa Saxena
union groups, which tend to be more formal and require less continuous interaction.

Reference groups influence members in at least three ways. They expose an individual to new
behaviours and lifestyle, they influence attitudes and self-concept, and they create pressure for
conformity that may affect product and brand choices.

Membership groups have a direct influence and to which a person belongs. For example, a student
is a member of a college, a class and a club or association that he or she joins.

Aspirational groups are groups to which an individual wish to belong. These are sought for
associations. Dissociative groups are those whose values or behaviour an individual reject.
Marketers closely observe these longings and create products and services that can help them
achieve those memberships. Many coaching classes use aspirations of students who desire to join
IIT or IIMs.

Where reference group influence is strong, marketers must determine how to reach and influence
the group’s opinion leaders. An opinion leader is the person who offers informal advice or
information about a specific product or product category, such as which of several brands is best or
how a particular product may be used. These groups may be formal or informal. Opinion leaders are
people within a reference group who, because of special skills, knowledge, personality, or other
characteristics, exert social influence on others. Internet and social networking sites are online
spaces where people socialize or exchange information and opinions.

Cliques are small groups whose members interact frequently. Clique members are similar, and their
closeness facilitates effective communications but also insulates the clique from new ideas.
According to bestselling author Malcom Gladwell, three factors work to ignite public interest in new
ideas and as per “The Law of the Few”, three types of people help to spread an idea like and epidemic.
First are Mavens, people knowledgeable about big and small things, second are the Connectors, who
know and communicate with a great number of people. Third are Salesman, who possess natural
persuasive power.

Family is the most important consumer buying organization in society. In a family, buying roles
change with evolving consumer lifestyles. In India, the wife traditionally has been the main
purchasing influence for the family in the areas of food, household products, and clothing. But with
more and more women holding jobs outside the home and the willingness of husbands to do more of
the family’s purchasing, all this is changing. These changing trends are even more extreme in the
West. Children may also have a strong influence on family’s buying decisions.

The socialization of family members, ranging from young children to adults, is a central family
function. Consumer socialization is children is defined as process by which children acquire the
skills, knowledge, attitudes, and experiences necessary to function as a consumer.

Family of orientation consists of parents and sibling; affects consumption choices.

Family of procreation is the person’s spouse and children.

Q7.4 How does the family influence the consumer socialization of children? What role does
television play in consumer socialization?

Buying Roles
Buying decision is often influenced by the reference groups and family members. People around us
assume different roles as the buying process proceeds. However, one person may assume multiple
roles in decision making. Also, roles differ in different buying situations. These roles are:

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Initiator: The initiator feels the need for the product, and therefore, starts the discussion about the
purchase. For example, a teenager may feel the need for a two- wheeler or a housewife realizes a
need for high capacity refrigerator. Need may be initiated from outside sources also. For instance,
the neighbours or relatives may suggest you a change of paint for your walls.

Influencer: The influencer attempts to persuade others in the

decision-making process to influence the outcome. Reference
groups, role models have strong influence in decision-making.
Retailers at times also influence or change the decision.

Decision-maker: This is the person having ultimate choice

regarding which product to buy. A person may decide for oneself or
the decision might be taken by the person who is paying for the
product. Decision- making can also be done jointly.

Buyer: The buyer conducts the transaction, i.e. makes the payment
and takes delivery.
Picture 7. 4 Child's Education
Policy
User: The product may be used by an individual or by group of
people (Kumar & Meenakshi, 2018)

Q7.5 Discuss the buying roles with reference to your recent purchase.

Personal Factors
Age and Life-Cycle Stage: People change the goods and services they buy over their lifetimes. Our
taste in food, clothes, furniture, and recreation is often related to our age. Consumption is also
shaped by the family life cycle and the number, age, and gender of people in the household at any
point in time. In addition, psychological life-cycle stages may matter. Adults experience certain
passages or transformations as they go through life.

RBC (Royal Bank of Canada) Royal Bank has identified five life-stage segments: Youth—younger
than 18 years, Getting started—18-35 years,
Builders—35-50 years, Accumulators—50-60 years,
Preservers—over 60 years

Marketers are increasingly catering to a growing

number of alternative, non-traditional stages such
as unmarried couples, singles marrying later in life,
childless couples, same sex couples, single parents,
and others.

Occupation: A person’s occupation affects the goods

Picture 7. 5 Planning for future stage
physicians.
and services bought. Students buy more of casuals
whereas working professionals have more of
formals. Marketers try to identify the occupational
groups that have above-average interest in their
products and services and even tailor products for
certain occupational groups: Computer software
companies, for example, design different products
for brand managers, engineers, lawyers, and

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Economic Situation: A person’s economic situation will affect product choice. Consumer low on
resources will buy more basic product. As resources increase, consumers look for value addition and
more frills. Both product and brand choice are greatly affected by economic circumstances like
spendable income (level, stability, and pattern over time), savings and assets (including the
percentage that is liquid), debts, borrowing power, and attitudes toward spending and saving.

Personality and Self-Concept Personality refers to the unique psychological characteristics that lead
to relatively consistent and lasting responses to one’s own environment. By personality, we mean a
set of distinguishing human psychological traits that lead to relatively consistent and enduring
responses to environmental stimuli including buying behaviour. We often describe personality in
terms of such traits as self-confidence, dominance, autonomy, deference, sociability, defensiveness,
and adaptability.

The basic self-concept premise is that people’s possessions contribute to and reflect their identities;
that is, “we are what we have.” Consumers often choose and use brands with a brand personality
consistent with their actual self-concept (how we view ourselves), though the match may instead be
based on the consumer’s ideal self-concept (how we would like to view ourselves) or even on others’
self-concept (how we think others see us).

Brands also have personalities, and consumers are likely to choose brands whose personalities
match their own. Brand Personality is a specific mix of human traits that are attributed to a
particular brand. Jennifer Aaker has researched brand personalities and identified the following
traits:

Figure 7. 2 Aaker's Brand Personalities

Applied Marketing 7.2 How Your Brand Can Help Build

Gen Z's Curated Self
Like every generation of teenagers before
them, Generation Z (or Pivotals) obsesses over
their appearance and how others see them.
But unlike older generations, Pivotals are
working twice as hard to manage their online
personas in addition to their physical selves.
Through social media, they meticulously
curate their personal brand to reflect how they
want to be perceived. Unlike the millennial
generation, Pivotals only share specific
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stories, to specific people, on specific channels.
These social platforms must showcase
Pivotals’ unique personalities and
accomplishments, proving that they are
different but still relatable. They know the
right days and times to post to elicit maximum
engagement. Like companies, they aim for
virality and a consistent online reputation.
Pivotals are their own brand managers,
monitoring comments, likes and views to
measure brand value and success. In fact,
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their self-esteem depends on these metrics.
When it comes to Gen Z’s favourite brands,
there’s no brand as important as brand “me.”
(Fromm, 2017).
Businesses are constantly vying to capture the
attention of potential customers. It’s not easy
to do. People are inundated with different
brands as they stroll through the streets, scan
through their social media newsfeeds, and
binge television. A simple concept can help
businesses cut through the noise. It’s called
psychological ownership. That’s when
consumers feel so invested in a product that it
becomes an extension of themselves.
To build psychological ownership, companies
must use at least one of three factors: control,
investment of self, and intimate knowledge.
Enhancing customer control
One way is to allow customers a hand in
forming the product. Consider Threadless, the
t-shirt company. Founded in 2000, the online
firm allows users to submit t-shirt designs and
vote on the best ones. Threadless prints and
sells the winners.
This model has been extremely successful. By
2006, the company received 150 T-shirt
designs per day and had over 400,000 users
voting on shirts. That year, the company sold
60,000 t-shirts per month and boasted a profit
margin of 35%—much higher than many
traditional clothing retailers.
Encouraging “investment of self”
Businesses should strive to make products
customizable. When consumers can
personalize products, they buy more and are
happy to recommend those products to
friends.
Take Coca-Cola’s 2014 “Share a Tropicana found this out in 2009, when it
Coke”campaign. The company’s total volume
of soft drinks sold had fallen for 11 years
straight. So Coke decided to sell bottles and
cans labeled with hundreds of common names.
And consumers were invited to request their
own customized cans. Sales turned around,
rising 2.5 percent in just 12 weeks.
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| Richa Saxena
Or consider Great Britain’s tourism campaign.
The nation’s tourist authority, VisitBritain,
invited Chinese residents to name classic
British landmarks in Chinese. They
submitted more than 13,000 names and voted
on their favourites. The seaside resort
Blackpool, for example, was named “A place
that is happy to visit” and the famous
shopping street Savile Row was named
“custom-made rich people street.” Then
VisitBritain used these names on social media
and websites. The number of Chinese visitors
to the United Kingdom increased 27 percent.
Building intimate knowledge
This occurs when customers believe they know
every facet of a product or brand so well that
they have a special, unique relationship with
it. Think about a friend who claims to
“discover” a brand because they knew about it
before any of their peers. Or someone who
waits in line for hours for the next iPhone
because they want to get it first.
The dangers of psychological ownership
Star Wars fans are notorious for their
psychological ownership of a film franchise
they know intimately. Recently, a group of
these fans even launched a campaign to
entirely remake the latest sequel—The Last
Jedi—because they disliked what it did with
“their” brand. The general resentment
towards the film showed at the box office; the
movie’s sales fell about $200 million short of
several Wall Street analysts’ predictions.
As the irate Star Wars fans show, once
companies cultivate psychological ownership,
they need to respect it. Psychological owners
can get defensive—even territorial —about
“their” brands.
scrapped its iconic logo of a simple straw in an
orange. The redesign turned off a generation
of customers who had grown up with the
image and felt ownership over the original
design. In less than two months, Tropicana’s
sales plummeted 20%. Competitors’ sales
increased by double-digits. Tropicana soon
went back to its original design.
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Companies legally own their brand, but their psychologically. Businesses should cultivate
most devoted customers may own it this feeling—and then respect it (Kirk, 2018).

Lifestyle and Value is a person’s pattern of living as expressed in his or her psychographics.
Lifestyles are determined by AIO statement. AIO dimensions are activities (work, hobbies,
shopping, sports, social events), interests (food, fashion, family, recreation), and opinions (about
themselves, social issues, business, products). People from the same subculture, social class, and
occupation may adopt quite different lifestyles. A lifestyle is a person’s pattern of living in the world
as expressed in activities, interests, and opinions.

Consumer decisions are also influenced by core values, the belief systems that underlie attitudes
and behaviours. Core values go much deeper than behaviour or attitude and at a basic level guide
people’s choices and desires over the long term. Marketers who target consumers on the basis of
their values believe that with appeals to people’s inner selves, it is possible to influence their outer
selves—their purchase behaviour.

Q7.6 Which variable—occupation, education or income—is the most appropriate

segmentation base for: (a) expensive vacations, (b) OTT Video channel subscriptions, (c)
People magazine subscriptions, (d) fat-free foods, (e) personal computers, (f) Concert/Shows,
and (g) health clubs?

References
Fromm, J. (2017, June). How Your Brand Can Help Build Gen Z's Curated Self. Retrieved from
Forbes: https://www.forbes.com/sites/jefffromm/2017/06/28/how-your-brand-can-help-build-
gen-zs-curated-self/#17b5199a7c7a
Kirk, C. P. (2018, September). How Customers Come to Think of a Product as an Extension of
Themselves. Retrieved from Forbes: https://hbr.org/2018/09/how-customers-come-to-think-
of-a-product-as-an-extension-of-themselves
Kotler, P., & Keller, K. (2018). Marketing Management. Pearson.
Kumar, A., & Meenakshi, N. (2018). Marketing Management. Vikas.
Malvania, Urvi@ET Brand Equity. (2019, November). Google IPSOS study explores how urban
India shops. Retrieved from ET Brand equity:
https://brandequity.economictimes.indiatimes.com/news/digital/google-ipsos-study-
explores-how-urban-india-shops/72215667
Schiffman, L. G., Kanuk, L. L., & Kumar, R. S. (2014). Consumer Behaviour. Noida: Pearson.
Singh, J. (2019). Microsoft Sees India's Diversity as a Boon for Its AI Efforts. Retrieved from
NDTV: https://gadgets.ndtv.com/internet/features/microsoft-sees-indias-diversity-as-a-
boon-for-its-ai-efforts-1977582

Trivia 7.1 Fill in the Blanks

1. Joe is a computer service technician. People in his neighbourhood usually depend on his
suggestions for purchasing any computer accessory or hardware, as they believe that he has access
to far more information on computer technology than the average consumer. The neighbours are
also aware that Joe has the required knowledge and background for understanding the technical
properties of the products. Within this context, Joe can be called a(n) ________.

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2. For a high school student, Tim is highly concerned about environmental issues. He is a strong
supporter of the garbage recycling and afforestation campaigns taken up by the environmental
activists in his neighbourhood. He wants to become a full time volunteer for their upcoming wildlife
protection program and has even saved money to contribute to the cause. This group of
environmental activists can be categorized under __________________ groups.

3. When Gary was a high school student, he enjoyed rock music and regularly purchased hip clothing
sported by his favourite rock band. However, five years later, when Gary became an accountant, his
preference shifted toward formal clothing. Which of the following personal characteristics is likely
to have had the most influence on Gary's preferences during his high school days? ________________.

4. Ford Motors uses the ad caption "Magnify the Adventure" to promote its latest SUV, the Ford
Endeavour. The ad features the car traveling through an uneven, rocky terrain. Within the context
of Jennifer Aaker's brand personality analysis, Ford Endeavour is most likely to be strong on
__________________trait of brand personality.

Trivia 7.2 Match the following

Match the given rituals with the symbols most frequently used to mark them.

Selected Rituals Typical Symbols

1. Weddings (a) Gift voucher
2. Birth of a child (b) Towel, water, iPod
3. Birthday (c) Get haircut, buy new clothing
4. 50th wedding anniversary (d) Sarees, lehangas, jewellery, flowers
5. Graduation (e) Food, fancy dress
6. New year’s eve (f) Catered party
7. Going to the gym (g) Plaque
8. Starting a new job (h) Cake with candles
9. Getting a job promotion (i) Pen, wristwatch
10. Retirement (j) Silver spoon

1______ 2_________ 3_______ 4______ 5_______ 6______ 7_______ 8_______ 9_______ 10________

Assignment 7.1 #ICA

As a marketing consultant, you were retained by the Walt Disney
Company to design a study investigating how families make vacation decisions. Whom,
within the family, would you interview? What kind of questions would you ask? How
would you assess the relative power of each family member in making vacation-related
decisions? Date of Submission______________________________

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