Chapter 7:

Consumer Behaviour
and Brand Buying
Decisions
 Contents
• Concept of consumer behaviour (CB) with respect to
branding
• Brand perception
• Changing demographic trends and lifestyles
• Model of consumer brand buying decision process
• Various factors affecting consumer behaviour
• Various factors affecting brand loyalty
 Introduction
According to Davis (2000) “... to maximize the
customer-brand relationship, a company must
understand how customers think, act, perceive,
and make purchase decisions”.
This highlights the necessity of understanding the
consumer’s brand purchase behaviour by the
brand managers
 Definition
“The behaviour that consumers display in
searching for, purchasing, using, evaluating, and
disposing of products and services that they expect
will satisfy their needs”
(Schiffman and Kanuk 2004).
 Importance of CB
• The post modern study of consumer behaviour is not to predict and manipulate
consumer behaviour but to better understand consumer behaviour.
• The focus of marketers should not be objective reality but instead consumer
perceptions.
• The net result of the changing role of the consumer is that companies can no
longer act independently. They need to understand how the consumer is
behaving, how they are gathering information, their major considerations while
purchasing the brand, and the factors influencing the purchase behaviour.
• Learning about how the customer finds and executes the optimum solution in a
given market makes it easier for an organization to earn their long-term trust,
purchases, and loyalty.
• It is believed that knowledge of the factors that influence consumer behaviour
can, with practice, be used to develop sound marketing strategies.
• These marketing strategies need to be integrated with the brand development
activity for holistic development of the firm in the long term.
 Consumer behaviour and the role of branding

• The last decade has seen the marketplace flooded with brands both national and
international. The customer has a number of options to choose from and their
attitude towards a brand is very influential in the purchase decision-making process.
• Some brands are purchased ‘not once but repeatedly, in many cases in predictably
regular patterns; hence the truth of the saying that when we build brands we are
making customers and not just sales.
• It has been studied that ‘two-thirds of buyers normally buy (with varying degrees of
irregularity) more than one brand. This introduces the extremely important concept
of the repertoire of brands.
• This consistent habit of repeat purchase in most of the markets highlights the need to
build strong brands.
• Brand name serves as “shorthand” for quality by providing consumers with a bundle
of information about the product.
• A brand promises the consumer quality and value and communicates a distinct
advantage to the consumer. Companies recognize the value of having strong brands in
their portfolio as it helps them build a loyal customer base
 Brand evaluation and perception by customers
Brand evaluation / perception

Functional /utilitarian Symbolic / expressive

Components
component component

Evaluation Rational and practical Emotional evaluation of

evaluation of brand brand
of the brand

Evaluation of performance capabilities Taste

Perception Usage effectiveness Pride
about Value for money Self expression
Reliability Belongingness to a group
Availability Sense of prestige
Social approval

Benefits Intrinsic Extrinsic

 Brand gap
• Brand image is defined as ‘the customer’s perception of brand
identity.’
• Brand identity portrayed by the organization can be same or different
from the brand image formed by customers on the basis of their
experience.
• If the brand image is the same as the brand identity then no brand
gap exists.
• For this to happen companies need to have an understanding of the
attitude and purchase process of the consumers
 The Indian consumer
Changing demographic trends and lifestyles
• The young Indian consumer
• Rising household income
• Spending habits and brand behaviour
• Rise of the Indian women as a consumer
• Changing consumer expectations
• Changing lifestyle
• Regional differences
Model of Consumer Decision Making
Stages Components Factors influencing

Marketing communications
Marketing effort of the firm (4Ps/7Ps
Brand equity
Input and brand name)
Cultural
Socio-cultural environment Culture
Sub-culture
Social
Reference group
Family role
Status

Consumer decision making Personal / Psychological factors

Need recognition Motivation
Beliefs
Process Information search Attitude
Personality
Evaluation of alternative Age and lifecycle stages
Occupation
Economic circumstances
Experience Lifestyle
Self concept
Perception
Learning and Memory
Post Purchase Behaviour
Purchase
Output Brand name
Post Purchase evaluation
Brand loyalty

Dissatisfaction Satisfaction

Divestment
Feedback
 Factors affecting consumer behaviour
• Socio-cultural environment
• Motivation
• Beliefs
• Attitude
• Personality
• Age and life-cycle stages
• Occupation and economic circumstances
• Lifestyle
• Self-concept and perception
• Learning and memory
• Role of the family
 Brand loyalty
• Brand loyalty is defined as the consumer’s commitment towards a
particular brand so much so that they are constantly looking out
for marketing activities associated with the brand and are
motivated to obtain the brand exclusively on every purchase.
• Research shows that
– a 1% increase in customer loyalty equals 10% cost reduction and
– 5% increase in customer loyalty increases the profitability of the
company by 40-95%
– Also, the cost of attracting a new customer is five times more than
the cost of retaining an existing customer
 Brand loyalty benefits
• Lowers vulnerability to competitors marketing strategies
• Increases marketing communication effectiveness and reduces
marketing costs
• Companies can charge higher margins
• Increases the probability of success in brand extension and licensing
opportunities
• Brand loyal customers are less price-sensitive. Thus they do not
readily shift over with the change in prices by the competitor brands.
• When a brand is promoted, non-loyal customers are likely to
purchase the promoted brand in small quantities but the brand loyal
customers are found to buy more of the promoted brand than they
would normally buy
• Brand loyalty has more influence on purchase decisions than price
promotions.
Factors affecting brand loyalty

Brand trust

Childhood Family ties

association

Brand
Loyalty
Customer Involvement
satisfaction

Perceived
Commitment
value
 Brand commitment
• The consumer’s commitment links them to the marketing
organization and is ‘the act of maintaining a relationship with a
commercial partner’.
• If a customer is committed towards a brand, it can be safely
presumed that the customer is brand loyal, frequently
purchases the brand, and has a favourable attitude towards
the brand.
• Commitment can be built by building brand communities
online or by forming clubs.
 Quick Recapitulation
• Concept of consumer behaviour with respect to
branding
• Brand perception
• Changing demographic trends and lifestyles
• Model of consumer brand buying decision process
• Various factors affecting consumer behaviour
• Various factors affecting brand loyalty
Questions?