C ONSUMER

BEHAVIOUR

I NTRODUCTION TO CONSUMER BEHAVIOUR

The main object of buyers behaviour studies to

understand the buyer, and create a customer through
this understanding. Every buyers study has unfolded
some new dimension of discipline.

The buyers behavior has been approached and

analyzed from different angels and under different
premises. Different inferences have been drawn. But
the subject, too complex to beat, still remains a
theorem without an evidence.

Consumer behaviour is the study of when, why,

how, and where people do or do not buy a product.
It blends elements from psychology, sociology, social
anthropology and economics. It attempts to
understand the buyer decision making process, both
individually and in groups. It studies characteristics
of individual consumers such as demographics and
behavioural variables in an attempt to understand
people's wants. It also tries to assess influences on
the consumer from groups such as family, friends,
reference groups, and society in general.

D EFINITION

CONSUMER BEHAVIOUR
Buyers behaviuor is defined as all psychological, social
and physical behaviour of potential customer as they
become aware of purchase, consumes, and tell others
about products and services.
i.

Buyers behaviour involves both individual (psychological) processes

and group (social) processes.

ii.

Buyers behaviour is reflected from awareness right through post

purchase evaluation indicating satisfaction or non satisfaction from
purchases.

iii.

Buyers behaviour includes communication, consumption and

purchasing behaviour.

iv.

Buyers behaviour is basically social in nature. Hence, environment

plays an important role in shaping the buyers behaviour.

v.

Buyers behaviour includes both consumer and business buyers

behaviour.

N EED

FOR STUDY OF

C ONSUMER (B UYER ) B EHAVIOR

The need of study of (consumer ) buyers can be explained with the help
of following point:

Production Policies: The Buyers behavior give an inside into the

various factor which promote him to purchase. If it is know that it is
packing or habit or fashion which attract the buyer then the producer will
pay social attention to these attribute in this produce and thus consumer
behavior deal in formulating production policies.

Price polices: The buyers behaviors is equally important in framing

price policy. The buyer of some product purchase only because particular
product are cheaper then the competitive product can not be raised.

On the other hand some other products are purchase because, it

enhances the prestige and social status of person. The price such thing
can easily be raised or fixed higher. Garment are purchased who think
themselves and the followers of Gandhi price of product purchase under
emotional motives can also be raised.

Decision regarding Channels of Distribution: The product

which are purchased and sold on the basis of low price
must have cheap and economic distribution channels. In
the case of those product which require after sale services
such as T.V sets , refrigerator etc. must have different
channel of distribution. Thus decision of channel of
distribution are taken on the basis of consumer behaviour.

Decision Regarding Sale and Promotion: A study of buyers

behavior are also vital in making decision regarding sales
promotion. It enables the producer to know what motive
promote the buyer to make purchase and the same are
utilized in advertising. Media to awaken the desire of
society to purchase. The marketers take decision
regarding brand, packaging, discount, gifts, etc. on the
basis of buyers behavior for promoting sales of the
product.

PARTICIPANTS IN CONSUMER BUYING DECISION

It is important for any marketing man, to know who makes the

decisions to purchase consumer durables or a nondurable
product; generally, for ordinary household products, family
members use their knowledge and experience to decide to buy
a particular brand or type depending upon quality and price,
whereas men are normally involved to make decisions to
purchase utility items and costly goods.

There are certain products like music system, color TV, video,
camera, electronic equipments, washing machines, scooters,
cars, etc., which are decided to purchase not by a single
member of the family but by all members of the family. Men
take decision in 2/3rd cases, for costly and durable consumer
products whereas in Western countries all family members are
rarely consulted. This situation is somewhat better in middle
class or upper class in Indias urban society.

Hence, it is necessary to know the characteristics of a

family which will be helpful in locating who makes
the purchase decision. P.G.Herbst in his work,
Conceptually Framework for Studying the Family in
Early 50s, has observed four types of families such as:

1. Automatic where the equal number of separate

decisions are made by each parameter,
(2) family where husband takes decision or he
dictates the decision (3) wife dominated family
where wife takes major decision; and (4) Syncratic
where most decisions are joined taken, i.e., everyone
is consulted before taking decision.

There are five different participants in any consumer

buying decisions:

Initiator: Initiator is the person who first suggests the

needs of the idea or the need for a particular product
which should be brought for satisfying certain
requirements.

Influences: After the initiator has suggested the idea for

a particular product, the Influencer is the person who
gives more information or gathers more information
which will influence the decision of the purchase.

Decider : A decider is the person who ultimately decides

to buy a particular product depending upon the
situation. Decider is generally the dominating member of
the family or head of the family who carries out of the
role.

Buyer: The decision has been made for certain goods which
buyer goes to purchase from the shop, the actual purchase
made by the buyer will depend on the convenience of the
family members or of the group and it may depend on the
earning members of the family or it may depend upon the
dominating person in the group of family.

User: The user is generally one who actually consumes or

uses the product or services so that it is believed to satisfy
variety of needs like physiological, social, psychological or
spiritual. Any product or services offered by seller should give
maximum utility value to the consumer for which they have
paid. Marketers try to provide maximum consumer
satisfaction in terms of satisfaction of needs or requirements
for the product or service when the consumers buy the goods

B UYER S D ECISION P ROCESS

Problem Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Consumption

Post purchase behavior

P ROBLEM R ECOGNITION

In this information processing model, the consumer

buying process begins when the buyer recognizes a
problem or need. For example, Doug may realize that
his best suit doesnt look contemporary any more. Or,
Kathleen may recognize that her personal computer is
not performing as well as she thought it should. These
are the kinds of problem that we as consumers
encounter all the time. When we found out a
difference between the actual state and a desired
state, a problem is recognized. When we find a
problem, we usually try to solve the problem. We, in
other words, recognize the need to solve the problem.
But how?

13

PROBLEM/NEED RECOGNITION

From Internal Stimuli:

Hunger

Thirst

Fear

From External Stimuli:

Neighbors Purchases

Advertisements

Window Shopping

Newspapers & Magazines

SOURCE : PRINCIPLE OF MARKETING, PHILIP KOTLER

MARKETING

I NFORMATION SEARCH

Once the consumer has recognized a problem, they search for

information on products and services that can solve that
problem. Belch and Belch (2007) explain that consumers
undertake both an internal (memory) and an external search.

Sources of information include:

Personal sources

Commercial sources

Public sources

Personal experience

The relevant internal psychological process that is associated

with information search is perception. Perception is defined as
"the process by which an individual receives, selects,
organizes, and interprets information to create a meaningful
picture of the world".

INFORMATION SEARCH

15

From Personal Sources:

From Commercial Sources:

Family

Advertisements

Friends

Dealers

Neighbors

Salespersons

Acquaintances

Packaging

Displays

SOURCE : PRINCIPLE OF MARKETING, PHILIP KOTLER

MARKETING

16

INFORMATION SEARCH (CONTD)

From Commercial Sources:

Advertisements

Dealers

Salespersons

Packaging

Displays

SOURCE : PRINCIPLE OF MARKETING, PHILIP KOTLER

MARKETING

INFORMATION SEARCH
(CONTD)

17

From Public Sources:

From Experiential Sources:

Mass Media

Handling the Product

Chambers of Commerce

Examining the Product

Consumer Rating Magazines

Using the Product

SOURCE : PRINCIPLE OF MARKETING, PHILIP KOTLER

MARKETING

I NFORMATION EVALUATION

At this time the consumer compares the brands and

products that are in their evoked set. How can the
marketing organization increase the likelihood that their
brand is part of the consumer's evoked (consideration)
set? Consumers evaluate alternatives in terms of the
functional and psychological benefits that they offer.

The marketing organization needs to understand what

benefits consumers are seeking and therefore which
attributes are most important in terms of making a
decision. It also needs to check other brands of the
customers consideration set to prepare the right plan
for its own brand.

P URCHASE DECISION

Once the alternatives have been evaluated, the consumer

is ready to make a purchase decision. Sometimes purchase
intention does not result in an actual purchase. The
marketing organization must facilitate the consumer to act
on their purchase intention. The organization can use a
variety of techniques to achieve this.

The provision of credit or payment terms may encourage

purchase, or a sales promotion such as the opportunity to
receive a premium or enter a competition may provide an
incentive to buy now. The relevant internal psychological
process that is associated with purchase decision is
integration. Once the integration is achieved, the
organization can influence the purchase decisions much
more easily.

PURCHASE DECISION

20

Interfering Factors:

Attitudes of Others: Opposing and intense

opinions of family members, close friends
and acquaintances

Unanticipated situational factors: Changes

in income, job transfer, loss of
employment, change of priority e.g.
sudden payment of educational fees etc.
SOURCE : PRINCIPLE OF MARKETING, PHILIP KOTLER

MARKETING

P OST PURCHASE EVALUATION

The EKB model was further developed by Rice

(1993) which suggested there should be a
feedback loop, Foxall (2005) further suggests
the importance of the post purchase
evaluation and that the post purchase
evaluation is key due to its influences on
future purchase patterns.

22

POST PURCHASE BEHAVIOR

Post purchase Satisfaction:

Keep the Product

Store the Product

Convert to a Second Use

Post purchase Dissatisfaction:

Try to return the product/take legal recourse

Rent it

Get rid of it/Throw it

SOURCE : PRINCIPLE OF MARKETING, PHILIP KOTLER

MARKETING

FACTORS A FFECTING C ONSUMER B EHAVIOR

Consumer behavior 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 behavior. 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 behavior is deeply influenced by cultural factors such

as: buyer culture, subculture, and social class.

Culture

Basically, culture is the part of every society and is the important

cause of person wants and behavior. The influence of culture on
buying behavior varies from country to country therefore
marketers have to be very careful in analyzing the culture of
different groups, regions or even countries.

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.

Social Class

Every society possesses some form of social

class which is important to the marketers
because the buying behavior 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
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 behavior of

consumers. The important social factors are: reference
groups, family, role and status.

Reference Groups

Reference groups have potential in forming a person

attitude or behavior. 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).

Family

Buyer behavior 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 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.

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 behavior. Some of the
important personal factors that influence the buying behavior are:
lifestyle, economic situation, occupation, age, personality and self
concept.

Age

Age and life-cycle have potential impact on the consumer buying

behavior. 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

Occupation

The occupation of a person has significant impact on his buying

behavior. 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.

Economic Situation

Consumer economic situation has great influence on his buying behavior. 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.

Lifestyle

Lifestyle of customers is another import factor affecting the consumer buying

behavior. 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.

Personality

Personality changes from person to person, time to time and place to place.
Therefore it can greatly influence the buying behavior of customers. Actually,
Personality is not what one wears; rather it is the totality of behavior 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 behavior for particular product or service

4. Psychological Factors

There are four important psychological factors

affecting the consumer buying behavior. These are:
perception, motivation, learning, beliefs and
attitudes.

Motivation

The level of motivation also affects the buying

behavior 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.

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.

Beliefs and Attitudes

Customer possesses specific belief and attitude

towards various products. Since such beliefs and
attitudes make up brand image and affect consumer
buying behavior therefore marketers are interested in
them. Marketers can change the beliefs and attitudes
of customers by launching special campaigns in this
regard.

INF L UE NCE O F SO C IA L SC IE NCES O N B UY E R B E H A V IOR

All major social sciences like economics, psychology, sociology and anthropology
have influenced buyer behavior studies. It is essential to have an idea of the
nature of this influence.

Influence of Economics

Economists describe man as a rational buyer and view the market as a collection
of homogeneous buyers. Under a given set of conditions, all buyers behave in a
similar fashion and every buying decision is a logical process with the ultimate
intention of obtaining optimum value for the money spent. Price is regarded as
the strongest motivation for the economic man. The economic mans
behavior, in short, is rational.

Though the model of economic man may help us understand certain aspects of
buyer behavior, it certainly cannot answer all the puzzles of buyer behavior. The
main problem with the concept of economic man is the assumption that buyers
are absolutely rational in their purchases and that markets are homogeneous.

Markets are actually a collection of heterogeneous buyers, differing from each

other in several characteristics. The marketing process is intended to match these
heterogeneous segments of demand with heterogeneous segments of supply.

Influence of Psychology

The next major influence on buyer behavior came from psychology.

According to psychologists, any human activity is directed towards
meeting certain needs. These needs have been categorized in
different ways by different psychologists.

Physiological needs are the basic needs: they include the need to
satisfy hunger, thirst, sleep, etc. For people who are well off,
physiological needs are met as a matter of routine, whereas for the
poor, a major part of their time is spent in striving to meet these
needs. Safety needs include needs relating to physical safety and
economic and social security.

Social needs come next and they include the need for love and the
need to belong. Esteem needs include the need for self-esteem, the
need for recognition by society and the need to be held in esteem by
others. Self-actualization needs include the need for selfdevelopment and the need to attain complete fruition of ones
capabilities and endowments. The actions of individuals are guided
by their need structure and need level.

Influence of Sociology and Anthropology

Sociology and anthropology lent further dimensions

to the subject of buyer behavior. According to
scholars in these fields, group pressure is the motive
force behind buying. Sociologists and anthropologists
have tried to establish a logical connection between
buyer behavior and the social environment of the
buyer. As a result, several new concepts like social
stratification, reference groups, role-orientation,
opinion leadership, etc., have come to be used for
giving causal explanations of buyers behavior.

I NDUSTRIAL M ARKET / ORGANIZATIONAL MARKET

Organizational /Industrial Market consist of

business firms (manufacturer, Wholesalers
and Retailers), governments (central, State
and Local)and organization (Universities and
Hospitals). Many purchase decision in the
industrial markets are made by groups. This
members of the buying centers, like the
members of the family, tend to assume
certain roles.

The classification based on this concept is given below,

Users Those in the organization who works with the

product purchased.

Buyers Individuals, often called purchasing agents with

the formal responsibility of placing orders.

Influencers Those who can affect the decision process

by assisting in evaluating alternative products.

Decider Managers with the authority to make the final

choice.

Gate Keepers organizational members who controls the

flow of information into the buying centers.

In organization buying behaviour, the personal needs and goals play a

secondary role. Here, the formal organization structure influences the buying
process. The process of organizational buying behaviour is complex. It is
carried out consciously and in a more formalized manner.

The organizational/industrial buying involves the following steps

1.

Determination of needs.

2.

Determination of quality.

3.

Determination of quantity.

4.

Quality description.

5.

Selection of suppliers.

6.

Analyzing quotation.

7.

Order Placing.

8.

Order Processing.

9.

Information feedback etc.

C HARACTERISTICS OF ORGANIZATIONAL MARKETS

Greater sales volume.

Smaller number of buyers.

Large volume of purchase.

Inelasticity demand.

Direct buying (Personal Buying).

Contract Buying by specification, standardization etc.

Negotiation Systems.

Make or buy or Lease Decisions.

Derived Demand.

C HARACTERISTICS

OF CONSUMER MARKETS

Every purchase in the consumer market is promoted by a motive or

combination of motives. Hence it is very necessary for the salesman
to know, what motive of purchaser prompt the buyers in the
consumer market to buy.

In the consumer market, the behaviour of every human being is

different because difference in heredity, education, environment,
training and experience.

In the consumer market, all customers are not one and the same.
There are different type of customers and each and every customers
have different needs.

In the consumer market, intensity of human being always change.

In the consumer market, buying motives is not one and the same for
all the persons (buyers).

The profit margin in the consumer market is low mainly due to high
competition exists in the market.