CONSUMER

BEHAVIOUR
Prepared By:
Mrs. Gurpreet K Chhabra
Astt. Prof. MERI
 Overview
of
Consumer Behavior

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 Learning Objectives
1. To Understand What Consumer Behavior Is and the
Different Types of Consumers.
2. To Understand the Relationship Between Consumer
Behavior and the Marketing Concept, the Societal
Marketing Concept, as Well as Segmentation, Targeting, and
Positioning.
3. To Understand the Relationship Between Consumer
Behavior and Customer Value, Satisfaction, Trust, and
Retention.
4. To Understand How New Technologies Are Enabling
Marketers to Better Satisfy the Needs and Wants of
Consumers.

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Chapter One Slide
 Overview of Consumer Behavior
Definition 1: Consumer behavior:

The study of how individuals make

decisions:

On how to spend their:

 Available resources( time, money effort)
On various consumption- related items.

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 Overview of Consumer Behavior
Definition 2: Consumer behavior
 The behavior that consumers
display in :
 Searching for,
 Purchasing,
 Using,
 Evaluating,
 And disposing of products and
services
 That they expect will satisfy their
needs.

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 Type of Consumers
Personal Consumer :
The individual who buys goods and services for his
or her own use, for household use, for the use of a
family member, or for a friend.

Organizational Consumer :
A business, government agency, or other
institution (profit or nonprofit) that buys the goods,
services, and/or equipment necessary for the
organization to function.

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Why do we need to study
Consumer Behavior?

 Because no longer can we

take the customer/consumer
for granted.

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 Relevance of Consumer Behavior
The study of consumer behavior is very
relevant for marketers because:

 Information and knowledge of buyer

motives and habits will enable them to draft
suitable marketing programmes
accordingly.

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 Consumer Behavior & Decision
Making interdisciplinary
Consumer behavior as a new discipline
borrowed concepts from other scientific
disciplines such as:
Anthropology
Psychology
Economics
History and geography
Socio-psychology
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Anthropology
 The influence of the
culture (within and across)
& society on the
individuals.

 Emphasis on cross-
cultural differences

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 Psychology
 Study of human thinking
and behavior
 Some issues
 Personality
 Personal development
 Cognition (thinking),
perception
 Attention and its limitations
 “Learning”—e.g., acquired
tastes
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 Economics
 Basic economic issues
 Supply and demand
 Rational decision making
 Perfect information
 Emphasis on predicting behavior
 Complications in real life
 Behavioral economics—e.g.,
“mental accounting”

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 History and Geography
 Origins of behavior,
perspectives, and
traditions
 Impact of geography on
individuals
 Isolation
 Language development
 Climate
 Geographic determinism

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 Socio- Psychology
 Is the study of how persons
are influenced by groups.
 Cultural and interpersonal
influences on
consumption—e.g.,
 Fads, fashions
 Diffusion of innovation
 Popular culture

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 Dynamic Consumer Behavior
 Thinking, feelings, and actions of individual
consumers, targeted consumer groups, and
society at large are constantly changing.
 Requires ongoing consumer research and
analysis of important trends.
 Makes development of marketing strategies
difficult and exciting
 Shorter product life-cycle increases importance of
constant innovation

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 Marketing concepts

Production concept
Product concept
Selling concept
Marketing concept
Societal concept
 Shift of focus to better serve
consumers for major reasons
 Increased consumer interest in world markets.

 Dramatic increase in the quality of consumer and

marketing research.
Use of technology to identify and know customers personally
Ability to track consumer reactions

 Development of the Internet as a marketing tool.

E-marketing potential
Increased importance of consumer behavior research
Ability to conduct marketing research studies

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Successful Relationships

Customer Customer
Value Satisfaction

Customer
Retention

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 Impact of Digital Technologies

 Consumers have more power and access to

information.
 Marketers can gather more information about
consumers .
 The exchange between marketer and customers
is interactive and instantaneous and goes
beyond the PC.
 Marketers must offer more products and
services.
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 Consumer Research

 Consumer research has developed as an

extension to the field of marketing
research with emphasis on consumer
behavioral aspects.
 The initial thrust on studying CB by
marketers was done for two reasons:
 To determine as to why consumers made the
purchase decisions.
 To understand how consumers would react to
promotional messages. 20
Model of Consumer Behavior
Product Marketing and Economic
Other Stimuli
Price Technological
Place Political
Promotion Cultural

Buyer’s Characteristics
Decision Buyer’s Black Box Affecting
Process Consumer
Behavior

Product Choice Purchase

Buyer’s Response Timing
Brand Choice
Purchase
Dealer Choice Amount
The Buyer Decision Process

Need Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Postpurchase Behavior
The Buyer Decision Process
Step 1. Need Recognition

Need Recognition
Difference between an actual state and a desired state

Internal Stimuli External Stimuli

• Hunger • TV advertising

• Thirst • Magazine ad
• A person’s normal
• Radio slogan
needs
•Stimuli in the
environment
The Buyer Decision Process
Step 2. Information Search
Personal Sources •Family, friends, neighbors
•Most influential source of
information

Commercial Sources •Advertising, salespeople

•Receives most information
from these sources

Public Sources •Mass Media

•Consumer-rating groups

•Handling the product

Experiential Sources •Examining the product
•Using the product
The Buyer Decision Process
Step 3. Evaluation of Alternatives
Product Attributes
Evaluation of Quality, Price, & Features

Degree of Importance
Which attributes matter most to me?

Brand Beliefs
What do I believe about each available brand?

Total Product Satisfaction

Based on what I’m looking for, how satisfied
would I be with each product?

Evaluation Procedures
Choosing a product (and brand) based on one
or more attributes.
The Buyer Decision Process
Step 4. Purchase Decision
Purchase Intention
Desire to buy the most preferred brand

Attitudes Unexpected
of others situational
factors

Purchase Decision
The Buyer Decision Process
Step 5. Postpurchase Behavior

Consumer’s Expectations of
Product’s Performance

Product’s Perceived
Performance

Satisfied Dissatisfied
Customer! Customer

Cognitive Dissonance
 CONSUMER DECISION
RULES
 Compensatory decision rule- On the basis of
this decision rule, a shopper evaluates store or
brand alternatives in respect of each salient
attribute and assigns weight for each store or
brand in a consideration set .The computed
value reflects the store’s relative edge as a
potential purchase choice . The proposition is
that the shopper will select the store or brand
that scores the highest among the options
evaluated. This rule is characterized by allowing
a positive evaluation of a store or brand on one
attribute to compensate or make for a negative
evaluation on some other attribute.
 Non- compensatory decision rule - on the basis of this rules
consumers do not balance positive assessment of store on one
dimension against a negative evaluation on other dimensions:
~ Conjunctive rule - Here the shopper establishes a specific, minimal
acceptable level as a cut off point for each dimension. If a particular
prospective store falls below the cut off point on any dimension
(evaluative criteria), it is dropped from the consideration set.
~ Disjunctive rule – Here a shopper sets up a specific ,minimal
acceptable level as a cut off point for each dimension . Acceptability
of a store depends if the store meets or exceeds the limit
established for any one dimension considered most important by the
customer.
~ Lexicographic decision rule – Here the shopper first ranks the
dimensions in terms of their perceived salience or importance .The
shopper then compares the various brand alternatives in terms of a
single attribute that is considered most important. If one brand
scores sufficiently high on this top-ranked dimension (regardless of
the scores on any other attributes) ,it is selected & process ends ,
else process continues with next highest alternative.
FISK’S CONCEPTUAL MODEL OF
DEPARTMENT STORE IMAGE
DIMENSION DETERMINANTS
Locational convenience 1) Access route
2) Traffic barrier
3) Travelling time
4) Parking availability

Merchandise suitability 1) Number of brands stocked

2) Quality of line
3) Breadth of assortment
4) Depth of assortment
5) Number of outstanding
departments in the store
Value for price 1) Price of a particular item in a particular
store
2) Price of same item in another store
3) Price of another item in the same store
4) Price of same item in the substitute
store
5) Trading stamps & discounts

Sales effort and store 1) Courtesy of sales clerks

2) Helpfulness of sales clerks
services
3) Reliability and usefulness of
advertising
4) Billing procedures
5) Adequacy of credit arrangements
6) Delivery promptness and care
7) Eating facilities
 1) Store layout
2) Store décor
Congeniality 3) Merchandise displays
4) Class of customers
5) Store traffic and congestion

1) Satisfaction with good in use

Post-transaction 2) Satisfaction with returns and
satisfaction adjustments
3) Satisfaction with price paid
4) Satisfaction with accessibility to
store
 CUSTOMER VALUE
Customers are value maximisers,and they tend to take
rational purchase decisions
Concept of customer Delivered value/customer perceived
value-it is the difference between prospective custmer’s
evaluation of all the costs of an offering and the
alternatives.
Customer delivered value=total customer value-total
customer cost.
Total customer value-is the percieved monetary value of
the bundle of the bundle of economic,functional &
psychological benefits that customer expect from a given
market offering.
Total customer cost-is the bundle of costs,customers
expect to incur in evaluating,obtaining,using&disposing
off,the given market offering.
Customer satisfaction-S=P-E
S=SATISFACTION LEVEL
P=PERFORMANCE AS PERCIEVED BY CUSTOMER
E=PERFORMANCE AS ALREADY EXPECTED BY THE CUSTOMER.
Therefore,P<E, P=E, P>E.
 Consumer Buying Decision Process

Marketers Must Identify and Understand:

Who Makes the Buying Decision

Types of Buying Decisions

Stages in the Buying Process

 CONSUMER BUYING
BEHAVIOR
 BUYING ROLES:
 initiator--a person who first suggests the idea of

buying the product or service

 influencer--a person whose views or advice
influences the decision
 decider--a person who decides on any component of

a buying decision
 buyer--the person who makes the actual purchase

 user--a person who consumes the product/service.

Types of Buying Decisions

High Low
Involvement Involvement
Significant Complex Variety-
differences Buying Seeking
between
brands
Behavior Behavior
Few Dissonance- Habitual
differences Reducing Buying
between
Buying
brands Behavior Behavior
 VARIOUS TYPES OF BUYING
SITUATIONS
 Complex buying situation-purchasing a car, computer, house
etc.stress is on pre-purchase councelling.Involvement on marketer’s
part is very high because brands differ widely.
 Habitual buying situation-purchasing grocery items, low involvement
because brands differ marginally marketers job is to make it
available easily.
 Dissonance-reducing buying situation-purchasing carpets, I-tech
electric devices, personal computers etc.High involment is required
at post purchase level so as to reduce post purchase dissonance of
customers.
 Variety-seeking buying situation-purchasing
cookies,perfumes,cosmetics products,clothes,shoes etc.Low
involvement.stress is on attracting retailers& customers through
attractive offers, prompting them to ‘switch’ brands.
Levels of Consumer Decision
Making

Extensive Problem
Solving

Limited Problem
Solving

Routine Response
Behavior

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 Levels of Consumer Decision
Making
 Extensive Problem Solving
 A lot of information needed
 Must establish a set of criteria for
evaluation
 Limited Problem Solving
 Criteria for evaluation established
 Fine tuning with additional information
 Routinized Response Behavior
 Usually review what they already know
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Chapter Fifteen Slide
 •A search by the consumer to establish
the necessary product criteria to evaluate
knowledgeably the most suitable product
to fulfill a need.

•Problem solving occurs when

Extensive
Problem •buyers purchase more expensive
important or technically complicated
Solving
product/service for the first time.

•less frequently purchased products

in an unfamiliar product category
requiring information search &
evaluation
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 •A limited search by a consumer for a
product that will satisfy his or her
basic criteria from among a selected
group of brands.

•Problem solving occurs when buyers

Limited are confronted with an unfamiliar
Problem brand in a familiar product category.
Solving
•Often occurs when consumer
purchasing new, updated version of
something already purchased before.

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 •At this level, consumers have
experience with the product
category and a well-established
Routinized set of criteria to evaluate the
brands is considered.
Response
Behavior •Response behavior occurs
when buyers purchase low cost,
low risk, brand loyal, frequently
purchased, low personal
identification or relevance, items
with which they are familiar.
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 Types of consumer involvement
and decision making

Routine Limited Extensive

Involvement Short Low to High

moderate
Time Low Short to Long
moderate
Cost Short Low to High
moderate
Information Internal only Mostly Internal &
Search internal external
Number of one few many
alternatives
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