Consumer Behaviour

Meaning
It is the study of consumer’s choice during search, evaluating, purchasing and using products & services that
they believe would satisfy their needs.
Consumer Behaviour explains how people decide to spend their money, time, effort on goods that marketers
offer for sale and describes which products and brands consumer’s select and why when, where they purchase
them.
Needs for studying CB
1. Knowledge of consumer helps in marketing strategies consumer reaction.
2. It gives knowledge of Who, What, Why, How, When, Where of consumer buying behaviour.
3. It helps to know the need, motive, drive, intention, goal, attitude of a consumer
4. To know how consumers decision making process

Customer value
It is the ratio between customer’s perceived benefit (economic, functional, and psychological) and the
resources (money, time, effort, psychological) they use to obtain those benefits.
Customer satisfaction
It refers to the customer’s perception of the performance of the product or service in relation to their
expectation. Customers have drastically different expectation for different products & services.
Customer retention
It involves turning individual consumer transaction into long term customer relationships by making it in the
best interests of the customers to stay with the company rather that switch to another firm.
Benefits of Customer retention
1. Potential to sell new products to Loyal customers
2. Loyal customers are less price sensitive
3. Lower cost to serve Loyal customers
4. Loyal customers spread word of mouth
Consumer research process
1. Defining the objectives of the research
2. Collecting & evaluating secondary data
3. Designing primary research study
a. Quantitative research design
i. Observational research – watching consumers
ii. Experimentation
iii. Survey
b. Qualitative research design
i. Depth interview – unstructured interview
ii. Focus group – to know interest, attitude, motive, feelings about product
iii. Projective technique – to uncovwer hidden thoughts about product
iv. Metaphor analysis – Using Metaphor statements to explain the product & its attributes
4. Collecting primary data
5. Analyzing the data
6. Preparing report on the findings

Model of consumer decision making

Culture & Consumer behaviour
Culture is the sum total of learned beliefs, values & customs that directs the Consumer behaviour of members
of a particular society.
Characteristics of culture
1. Culture is learnt response
2. Culture includes inculcated values, norms
3. Culture is a social phenomena
4. Culture shapes the behaviour of people
5. Culture is shared
Subculture
It is defined as a distinct cultural group that exists as an identifiable segment within a larger, more complex
society. The members of a specific sub culture possess beliefs, values, customs that set them apart from other
members of the same society.
Cross Culture marketing
It is defined as an effort to determine to what extent the consumers of two or more nations are similar or
different. Thus will facilitate marketers to understand the psychological, social & cultural aspects of foreign
consumers they wish to target so as to design effective marketing strategies fort each of the specific national
markets involved.
Research on Cross Culture analysis (Difference is analyzed of the following)
1. Language
2. Consumption pattern
3. Perceived benefit of product
4. Economic, cultural, social, family.
Measurement of culture
1. Content Analysis – Analyzing existing advertisements.
2. Consumer fieldwork – Researcher Observes of consumers in real world
3. Participant observers – Researcher acts as sales men to help consumer
 4. Survey

Reference Groups
Meaning of Groups
Two or more persons who are interacting with one another in such a manner that each person influences and
is influenced by the other.
Meaning of Reference Group
The type of group that an individual uses as point of reference in determining his own judgements, preference,
beliefs & behaviour. Hence Reference Group may have direct or indirect influence over a consumer.
Application of reference groups
1. Information influence
a. Real expert spokes person
b. Actor spokes person
2. Comparative influence
3. Normative influence

Family Decision making

Types of families in western society
Married couple Nuclear family Extended family
Role of family members
Influencers Gatekeepers Deciders Buyers
Preparers Users Maintainers Disposers
Family life cycle
Bachelorhood – Just married Parenthood Post Parenthood Dissolution

Consumer Motivation
Motivation produced by a state of tension, by having a NEED which is UNFULFILLED.
Motivation acts as the driving force within individuals. Unfulfilled needs cause tension and tension in turn
reinforces the driving force. Individual reduce tension by fulfilling their needs. The specific goals that
consumers wish to achieve and the course of action they take to attain these goals are selected on the basis of
their thinking process (cognition) and previous learning.

Selection of goals
For any given need, there are many different & appropriate goals. Individual’s select goals on the basis of their
personal experiences, physical capacity, cultural norms, values & social environments. People are conscious
about the physiological needs that the psychological needs.

Characteristics of motivation
1. Needs are never fully satisfied
2. New needs emerge as old needs are satisfied
3. Success & failure influence goals
4. Substitute goals emerge when old goals fail
5. Frustration
6. Multiplicity of needs
7. Needs & goals vary are unique to each person

Types of Needs
1. Innate needs - Physiological needs for food, water, air, clothing, shelter, and sex. Also known as biogenic
or primary needs
2. Acquired Needs:
a. Need for Achievement: Desire to accomplish something difficult, master complex tasks and
surpass others
b. Need for Affiliation: desire to form close personal relationships, aviod conflict, and establish
friendships
c. Need for Power: desire to influence or control

Goals - Sought-after results of motivated behavior

Types of Goals
1. Generic Goals - General categories of goals that consumers see as a way to fulfill their needs. "I need a
car for transportation"
2. Product-Specific Goals - Specifically branded products or services that consumers select as their goals.
"I want my car to be a Honda"
How dormant needs are aroused
Types of Arousal
1. Physical (hunger)
2. Cognitive (read an ad)
3. Emotional (frustrated, Daydreaming)
4. Environmental (the weather, Smell from bakery)
Consumer involvement in decision making
Involvement is the embodiment of time,
effort, consideration given and the
enjoyment that is derived by consumer while choosing a product or service.
Low Involvement = Short life products = FMCG goods
Medium Involvement = Medium life products = Furniture
High Involvement = Long life products = Car, Insurance policy
Types of Involvement
Ego Involvement Commitment Communication
Purchase Importance Extent of information

Opinion Leadership
Opinion Leaders offer advice or information about a product, service and how a particular product may be
used.
It is the process by which one person (Opinion Leader) informally influences the actions or attitudes of others,
who may be distinguished as Opinion Leader. Individuals who actively seek information are called Opinion
seekers
Opinion Leadership become an opinion receiver when another product is brought up as part of the overall
discussion.
Characteristics of opinion leadership
1. Opinion Leaders are knowledgeable
2. Opinion Leaders are credible source
3. Provision of both positive & negative product information
4. Source of information & advice
5. Common traits between Opinion Leaders & seeker
Motivation behind Opinion Leadership
Self confirmation Product involvement Social involvement Message involvement
Advantages of Opinion Leadership
1. Easy to obtain new information
 2. Reliable information
3. Reduces perceived risk
4. Reduces search time
5. Approval from other – Social proof

Consumer Learning
According to Kotler’s Definition, learning involves changes in an individual’s behavior arising out of the
experience. Most of the human behavior is learned over time, out of the experience.
Features of consumer learning
 Consumer learning is a process, and thus it continuously changes and evolves as a result of newly
acquired knowledge
 This knowledge can be obtained from reading, discussing, observing, thinking, etc. Or from actual
experience.
 Both the newly acquired knowledge and personal experience serve as a feedback.4.This also serve as a
future behaviour in similar situations.5.Not all learning is deliberate. Learning can be :
o Intentional : acquired as a result of careful search for information with effort.
o Incidental : acquired as a result of accident or by the way, without much effort.
 The term “Learning” generally covers all ranges of learning from simple reflexiveresponses to abstract
concepts or complex problem solving capability

Theories of learning
Classical Conditioning :
This theory says that all living beings learn from or taught by “repetition”. This is referred to as “conditioning”
which means a kind of spontaneous response to a particular situation achieved by repeated exposure. Classical
conditioning or respondent conditioning pairs or connects one stimulus with another that has already
established a given response. Over repeated trials of exposure, the new stimulus will also begin to get the
same or similar response.
Example: In the context of Consumer Behaviour, unconditioned stimulus may be a well known brand(say Amul
milk and milk products) whose product quality is well known. This previouslyacquired perception of Amul is
the “unconditioned response”. The conditioned stimulus maybe a new product (Amul Ice-cream) having the
same brand name. And the “conditionedresponse” would be trying the Ice-Cream because of the belief that
the product may have thesame quality attributes as the Amul name is associated with.
Instrumental Conditioning :
B F SKINNER, an American psychologist was the first to develop this model of learning. This theory suggests
that living beings learn by a method of trial-and-error, and finding out the particular stimulus having the best
(or the most favourable / satisfactory) response. And subsequently this is formed as a habit with the rewards
received for certain response of behaviour.
Example:
This theory, named as instrumenta lconditioning was shown by an experiment by working with animals. He
made a box called the Skinner Box and placed a few small animals. The box was fitted with several keys /
levers. When an animal pressed the right lever, it got some food as reward. Pressing other levers didn’t get any
rewards. In the beginning the animals pressed the levers at random. But slowly the “discovered” the right one.
This kind of learning and teaching has wonderful and successful results. In the context of consumer behaviour,
this model is very important and applies to many common situations. It suggests that consumers learn by
means of trial-and-error method in which some purchase behaviours result in more favourable outcomes (i.e.,
rewards) than other purchase behaviours. Thus, a favourable experience becomes “instrumental” in teaching
the individual to repeat a specific behaviour.

COGNITIVE LEARNING THEORY

There is another type of theory of learning, which doesn’t involve repeated trials or a connection between a
stimulus and response. This type of learning arises out of using the mental faculty of the individual to discover
things, perceive things, seeking knowledge, search for information, sudden impulsive learning, solving
problems, etc. Learning based on the mental activity is known as “cognitive learning”.
Human beings are the most evolved animals who have the most prominent characteristics of thinking,
deliberation and problem solving. Unlike behavioural theories, the cognitive theories involve a complex mental
processing of information, and emphasise the role of motivation and mental processes in producing the
desired response.
Example
WOLFGANG KOHLER’s experiment with a chimpanzee provides an interesting example to understand this
theory of learning. A chimp was placed inside a cage with a box in a corner of the cage and bananas hung from
the roof of the cage beyond reach. The chimp jumped several times and tried to reach the bananas, but in
vain. Suddenly by impulse, the chimp placed the box just under the bananas and jumped from it to reach the
bananas, and he got them. This suggests that the ape’s learning was not a result of repetition or trial-and-error,
but because of some thinking and a sudden insight into the problem solving method. The bananas in this
experiment are not rewards, but a kind of motivation to apply thinking and problem solving methods. In the
context of consumer behaviour, the individuals are considered to show problem solving behaviour and have
active understanding of situations confronting them. This view is therefore most important in understanding
how consumers learn which stores, method of shopping, or products will best meet their needs

Consumer Attitude (opinions = Like or Dislike)

Meaning
Attitude is defined as a mental, emotional or rational predisposition with regard to a fact, ‘state, person or an
object.
Characteristics of Attitude
1. Attitude results from beliefs, values, opinions
2. Attitude are object specific
3. Attitude learnt disposition
4. Attitude are consistent
5. Attitude occur within a situation

Factors affecting Attitude

1. Personal experience
2. Influence of family and friends
3. Marketing efforts
4. Mass media
5. Individual Personality factors
Models of Attitude
Tri-component Model − According to tri-component model, attitude consists of the following three
components.
1. Cognitive Component − The first component is cognitive component. It consists of an individual’s
knowledge or perception towards few products or services through personal experience or related
information from various sources. This knowledge, usually results in beliefs, which a consumer has, and
specific behavior.
 2. Affective Component − The second part is the affective component. This consists of a person’s feelings,
sentiments, and emotions for a particular brand or product. They treat them as the primary criteria for
the purpose of evaluation. The state of mind also plays a major role, like the sadness, happiness, anger,
or stress, which also affects the attitude of a consumer.
3. Conative Component − The last component is conative component, which consists of a person’s
intention or likelihood towards a particular product. It usually means the actual behavior of the person
or his intention.

Attitude
Change
Strategies.
Changing
attitudes
is
generally very difficult,
particularly when consumers suspect
that the marketer has a self-serving agenda in bringing about this change (e.g., to get the consumer to buy
more or to switch brands).
1. Changing affect.
a. One approach is to try to change affect, which may or may not involve getting consumers to
change their beliefs. One strategy uses the approach of classical conditioning try to “pair” the
product with a liked stimulus.
b. For example, the Pillsbury Doughboy does not really emphasize the conveyance of much
information to the consumer; instead, it attempts to create a warm, fuzzy image.
c. Although Energizer Bunny ads try to get people to believe that their batteries last longer, the
main emphasis is on the likeable bunny. Finally, products which are better known, through the
mere exposure effect, tend to be better liked--that is, the more a product is advertised and seen
in stores, the more it will generally be liked, even if consumers to do not develop any specific
beliefs about the product.

2. Changing behavior.
a. People like to believe that their behavior is rational; thus, once they use our products, chances
are that they will continue unless someone is able to get them to switch. One way to get people
to switch to our brand is to use temporary price discounts and coupons; however, when
consumers buy a product on deal, they may justify the purchase based on that deal (i.e., the
low price) and may then switch to other brands on deal later.
b. A better way to get people to switch to our brand is to at least temporarily obtain better shelf
space so that the product is more convenient. Consumers are less likely to use this availability
as a rationale for their purchase and may continue to buy the product even when the product is
less conveniently located. (Notice, by the way, that this represents a case of shaping).
3. Changing beliefs.
 Although attempting to change beliefs is the obvious way to attempt attitude change, particularly when
consumers hold unfavorable or inaccurate ones, this is often difficult to achieve because consumers
tend to resist. Several approaches to belief change exist:
a. Change currently held beliefs. It is generally very difficult to attempt to change beliefs that
people hold, particularly those that are strongly held, even if they are inaccurate. For example,
the petroleum industry advertised for a long time that its profits were lower than were
commonly believed, and provided extensive factual evidence in its advertising to support this
reality. Consumers were suspicious and rejected this information, however.
b. Change the importance of beliefs. Although the sugar manufacturers would undoubtedly like to
decrease the importance of healthy teeth, it is usually not feasible to make beliefs less
important--consumers are likely to reason, why, then, would you bother bringing them up in the
first place? However, it may be possible to strengthen beliefs that favor us--e.g., a vitamin
supplement manufacturer may advertise that it is extremely important for women to replace
iron lost through menstruation. Most consumers already agree with this, but the belief can be
made stronger.
c. Add beliefs. Consumers are less likely to resist the addition of beliefs so long as they do not
conflict with existing beliefs. Thus, the beef industry has added beliefs that beef (1) is
convenient and (2) can be used to make a number of creative dishes. Vitamin manufacturers
attempt to add the belief that stress causes vitamin depletion, which sounds quite plausible to
most people.
d. Change ideal. It usually difficult, and very risky, to attempt to change ideals, and only few firms
succeed. For example, Hard Candy may have attempted to change the ideal away from
traditional beauty toward more unique self expression.

Consumer Personality
Personality refers to the inner psychological characteristics or traits of a person that determine, how a person
responds to his/her environment.
Inner psychological characteristics are specific qualities, attitudes, mannerism that differentiates one person
from another. The behavior of Consumers gets influenced by many factors internal and external. Personality is
the inner factor that influences an individual`s product choice and brand choice.
People generally choose the products that match their personality. Hence, marketers must associate a product
or broad with different personality traits to develop an effective marketing strategy for a type of personality.
Personality of a person may change gradually from time to time due to learning, personal experiences or major
life events.

Characteristics of Personality
 Personality is more of an internal factor
 It gets reflected in the pattern of response in humans
 It is a collection of mannerisms, attributes and factors which are unique to every human being
 It is associated with the psychological factors related to the human
 Conglomeration of many traits makes a personality
  Personality is a highly integrated structure which gets formed due to the rounded effort of all factors
concerned
 Personality serves its needs all by itself without much dependence on external factors
 The individualistic characteristics of personality is what differentiates one human being from the other
 Personality expresses itself in the form of behaviour by being overt
 Personality once established remains the same exhibiting high levels of consistency

Approaches to Personality
Psychoanalytic Approach
Psychoanalytic Approach relies upon Psychoanalysis which is an in depth study into the situations, events and
processes that has determined the personality factors. Known also as Freudian Psychology, Psychographic
Approach tends to make people understand the factors that have shaped their personality type. This helps
individuals cope up with their life events in a more efficient manner.
ID
First is the ID which relates to the desires of human beings triggered by the unconscious aspect of human
mind. This includes the intuitions that people get in frequent intervals. ID asks for immediate satisfaction and
works based on the principle closely related to Hedonism (pursuit of pleasure; sensual self-indulgence).
Satisfaction of pleasures matters the most to ID. Relating ID to consumer behaviour in a typical purchase
context, the unsatisfied desires of consumers which are more of fantasies creates frustration in their minds. It
tends to make consumers handle issues in a subjective manner rather than with objectivity
Ego
Second is the Ego which is nothing but the fully conscious self image. This is a highly practical aspect that
works with ID as its basics. Behaviors that appear more impulsive tend to get controlled by Ego. Ego is that
aspect of mind which seeks to experience pleasure that is desired by the ID aspect of the same. Ego being a
realistic one, in a typical consumer context, it tends to control the impulsive behaviours of consumers. It does
not get frustrated by dreams and fantasies and enjoys the same from a pleasure experiencing angle.
Superego
Superego which is that portion of mind that controls the behavior of human beings. This is the aspect of mind
that helps people seek perfection in all that they do. It sets moral and discipline codes which in turn control
the aggressive behaviour in human beings. A typical consumer who works from a Super Ego angle tends to be
highly matured in all their purchase related decisions.
Freud advocates that a proper balance in all the three above given aspects makes a person become rounded
personality. A consumer who has a balanced ID, Ego and Super Ego exhibits a balanced approach in all their
decision pertaining to purchase of products.

Trait Theory
It is defined as “any distinguishing, relatively enduring way in which one individual differs from another”
The trait which measures just one trait, such as self-confidence, the personality tests measure such traits as
consumer innovativeness, consumer materialism and consumer ethnocentrism, the explanation for this are:
1. Consumer innovativeness: The degree to which consumers are receptive to new products, new
services, or new practices

2. Dogmatism: A personality trait that reflects the degree of rigidity a person displays toward the
unfamiliar and toward information that is contrary to his or her own established beliefs
3. Social character: It has its origins in sociological research, which focuses on the identification and
classification of individuals into distinct sociocultural types. The personality trait ranges on a series from
inner-directedness to other-directedness.

4. Need for uniqueness: Consumers who avoid appearing to conform to expectations or standards of
others

5. Optimum stimulation level: A personality trait that measures the level or amount of novelty or
complexity that individuals seek in their personal experiences

6. Variety-novelty seeking: Measures a consumer’s degree of variety seeking

7. Need for cognition (NC) - Cognition measures a person's craving for or enjoyment of thinking,
researchers suggests that consumers who are high in NC are more likely to be responsive to the part of
an ad that is rich in product-related information or description; consumers who are relatively low in NC
are more likely to be attracted to the background or peripheral aspects of an ad, such as an attractive
model or well-known celebrity.

8. Visualizers versus verbalizers - People who are open to and prefer the written word as a way of
obtaining information are visualizers, and the people who are more likely to respond to and prefer
visual images or messages as source of information.

9. Consumer materialism - Materialism is a personality like trait which distinguishes between individuals
who regard possessions as essential to their identities and their lives those for whom possessions are
secondary. Researchers have found some characteristics of materialistic people, they are:
· -they value acquire and showoff possessions.
· -they are self centered and selfish people
· -they seek lifestyle full of possession
· -they are not satisfied with their possessions.

10. Consumer Ethnocentrism - Consumers who are highly ethnocentric are likely to feel that it is
inappropriate or wrong to purchase foreign made products because of resulting economic impact on
the domestic economy.

11. Self and self-image

o Consumers have a variety of lasting image of themselves; these images are associated with
personality in that individual’s consumption relates to self-image.
o One or multiple selves: A consumer who acts differently in different situations or with different
people, for instance a person is likely to behave in different ways at home, at work or with friends. It’s
normal that a person is likely to display different personality in different situations and social roles.
 o Extended self: It is an interrelationship between consumers self image and their possession. A
consumer’s possession may extend their self image in number of ways- Actually, Symbolically,
Conferring status or rank, Bestowing feelings of immortality, Endowing with magical powers.
o Altering the self: The consumers who try to modify their appearances to become a different or
improved self by using all kind of accessories, this is frequently done to express their individualism or
uniqueness by creating anew self and maintaining the existing self.

Non-Freudian or Socio-psychological Theory

Socio-Psychological Theory is also called as Non-Freudian Theory. It is based purely on relationships which are
considered as the reason for the development of different types of Personalities. Based on this consideration
the behaviour of consumers has been divided in to three types. The three types of consumer behaviors have
been grouped into one and termed as CAD. Under this model, individuals have been classified as:
(1) Compliant Individuals are the ones who are compassionate about being loved by others. They relish care
and attention given by others. They are highly compliant in all their activities and can be termed as
Conformists.
(2) Aggressive Individuals are those who act against the intention of others. They are highly manipulative.
They enjoy power and being at authoritative positions. Consumers who fall under this individual type go in
only for branded products owing to their desire to be noticed.
(3) Detached Individuals least care for brands. Freedom is important for them. They love to feel independent
and are mostly self reliant in their thinking a nd activities.

NICOSIA Model
In Nicosia Model the decision-making process is divided into four areas
Area 1 - includes consumer attitudes shaped by information from the market. In this area information flows
from the source of their creation to the recipient.
Area 2 - consumer is looking for information about specific products and gives them value. During the
evaluation the consumer allocates appropriate weight to each information piece. When the result of the
evaluation of a given product from the consumer's point of view is satisfactory, consumer is motivated to buy.
Area 3 - act of purchase. Motivation - established in advance by consumer prompts him to acquire the product.
Area 4 - feedback, as result of the consumption of the product, the consumer acquires a new experience and
base on it his new preferences (predisposition). This last step is not only the consumption of a product but also
a very important factor for the future decisions of the consumer. Feedback is also a very important factor for
the company, which acquires a new information that could be used in preparing future product policy, its
advertising and communications targeted to the consumer.
Howard Sheth Model

EBM Model
Information Search and Decision Making
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