1. Consumer Behavior

2. Unit 2. Consumer Behavior
Analysis
Meaning and Characteristics, Importance,
Factors, Influencing Consumer Behavior,
Consumer Purchase Decision Process, Buying
Roles, Buying Motives, Buyer Behavior Models.

3. Definitions of CB
“CB refers to the actions & decision process of
people who purchase goods & services for
personal consumption.”
OR
Consumer Behavior is defined as the behavior
that consumers display in searching for,
purchasing, using, evaluating, and disposing of
products and services that they expect will
satisfy their needs.

4. Impotence of CB
• Consumer behavior focuses on how individuals make decisions to spend their
available resources (time, money, effort) on consumption-related items.
• The decisions include- What they buy, why they but it, when they buy it, where
they buy it, how often they buy it, how often they use it, how they evaluate it
after the purchase, the impact of such evaluations on future purchases, and
how they dispose of it.
• In order to succeed in today’s business marketers need to know everything
they can about consumers– What they want, what they think, how they work,
how they spend their leisure time.
• They need to understand the personal and group influences that affect
consumer decisions and how these decisions are made.

5. Consumers’ Impact on Marketing
Strategy
• Understanding consumer behavior is important
part of business.
– Firms exist to satisfy consumers’ needs, so
– Firms must understand consumers needs to satisfy
them.
• The Process of Marketing Segmentation:
– Identifies Groups of Consumers Who are Similar to
One Another in One or More Ways, and
– Devises Marketing Strategies that Appeal to One or
More of These Groups.

6. Characteristics of CB contd..
• CB comprises both physical & mental activities of buyer
• It covers both visible & invisible activities of buyer
• Buyer behavior is very complex
• Buyer behavior is very dynamic
• Individual behavior is influenced by internal & external factors
• It is an integral part of Human behavior
• It is influenced by number of marketing stimuli offered by
marketer
• It involves both Psychological & social process
• Consumers are heterogeneous in nature
• Consumers often act emotionally rather than rationally

7. Difference between Consumer and
Customer
• A consumer buys goods and
services for his or her own use,
for the use of his household.
• 2 types- personal consumer
organizational consumer
• Here the person who purchases
is the final end-user.
• Example: If a person purchases a
tooth paste and he uses it then
he becomes the consumer as he
is using it.
• A customer may be the one who
just make a purchase- he may or
may not be the consumer.
• Here the person who purchase is
not the final end-user.
• Example: If a person purchases
toys and he gives it to his child to
play with it, then he becomes
just a customer and the child
becomes the consumer.

8. Scope of Consumer Behavior
• Marketing Mix Decisions
• Target Market Selection
• Product Development
• Consumer Behavior & Government Decisions
• Production Policies
• Price Policies
• Channel Distribution decisions
• Identifying Consumer Preferences
• Product Launching
• Packaging Policies

9. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Influences on
the consumer
purchase
decision
process

10. External Influences
The External Influences are:
1. Social Class
2. Culture & Sub culture
3. Reference Groups
4. Family
5. Personal Factors/Influences

11. Social Class
• The division of members of a society into a
hierarchy of distinct status classes, so that
members of each class have either higher or
lower status than members of other classes.
OR
• Social class is defined as the relatively
permanent, homogeneous divisions in a society
into which people sharing similar values,
interests, and behavior can be grouped.

12. • Characteristics of Social Class
– Is hierarchical
– Is a natural form of segmentation
– Provides a frame of reference for consumer behavior
– Reflects a person’s relative social status
• Social Class and Social Status
– Status is frequently thought of as the relative
rankings of members of each social class
– wealth
– power
– prestige

13. • Culture:- Is the common shared values and
actions of the society. It is the way of life it
includes material objects, attitudes, beliefs,
norms, customs, behavior patterns, dressing,
eating habits, symbols & language ….
• Sub culture:- Subgroups with in the larger or
national, culture with unique values, ideas and
attitudes are referred to as subcultures

14. • Reference Groups: Reference groups are
people to whom an individual looks as a basis
for self appraisal or as a source of personal
standards.
• Family Life cycle: The life cycle concept
describes the distinct phases that a family
progresses through from formation to
retirement.

15. Personal
Factors
Lifestyles
Occupation &
Economic
Constraints
Personality
Age & Stage in the
Life style

16. Psychological Factors /
Internal Factors
Motivation
Learning Beliefs
Personality Perception
Attitudes

17. Motivation
Basics of Motivation:
• Motivation is the driving force within individuals that impels
them to action.
• This driving force is produced by a state of tension, which
exists as the result of an unfulfilled need.
• Individuals strive both consciously and subconsciously to
reduce this tension through behavior that they anticipate
will fulfill their needs and this relieve them of the stress they
feel.

18. Characteristics of Motivation
 One of the most important factors that lead one to their
goals is the drive. This drive is known as motivation.
 It is a enthusiasm and determination with a kind of
excitement that leads one to persevere to reach greater heights,
in no matter what avenue of their life; be it – personal or
professional.
 The drive may come from an internal or external source.
The individual determines this.

19. Positive & Negative Motivation
Motivation can be positive or negative in direction. Needs, wants, or
desires may lead to goals that can be positive or negative.
• Positive Goal: It is the one toward which behavior is directed. Thus it is
often referred to as an approach object.
• Negative Goal: A negative goal is one from which behavior is directed
away and is the results of motivated behavior.

20. Personality
Basics of Personality
• Personality can be defined as those inner psychological characteristics that
both determine and reflect how a person responds to his or her
environment.
• Personality is made up of the characteristic patterns of thoughts, feelings
and behaviors that make a person unique. In addition to this, personality
arises from within the individual and remains fairly consistent throughout
life.
• The study of personality, has been approached by theorists in a variety of
ways.
• Some believe that personality is created by heredity & early childhood
experiences.
• Some other say that personality is built by social & environmental
influences and it develops continuously with time.

21. Personality
Marketing Significance of Personality:
• The personality of people are likely to influence the individual’s product
choices.
• Personality affects the way consumers respond to marketer’s
promotional efforts, and when, where and how consumers consume
particular products or services.
• Therefore, the identification of specific personality characteristics
associated with consumer behavior has proven to be highly useful in the
development of a firm’s market segmentation strategies.

22. Nature of Personality
The study of personality has 3 distinct properties of central importance:
• Personality reflects individuals differences:
No two individuals are exactly alike. All have different traits and based on these
common traits consumers can be segmented by the marketers.
• Personality is consistent and enduring
An individual’s personality tends to be both consistent and enduring. Marketers
can attempt to appeal to the relevant traits inherent in their target group of
consumers.
• Personality can change
Under certain circumstances personalities change. Major events change the
personalities or some psychological, socio-cultural environment, and situational
factors sometimes change the personality.

23. Perception
Basics of Perception:
• Perception is defined as the process by which an individual selects,
organized, and interprets stimuli into a meaningful and coherent picture
of the world.
• Two individuals may be exposed to the same stimuli under the same
apparent conditions, but how each person recognizes, selects, organizes,
& interprets these stimuli is highly different.
• Every individuals has his own needs, values, & expectations based on
which his perception towards any marketing stimulus changes.
Subliminal Perception:
means that you see or hear messages without being aware of them.

24. Marketing Implications of Perception
• Perception has strategy implications for marketers because
consumers make decisions based on what they perceive
rather than on the basis of objective reality.
• Consumer make decisions and take actions based on what
they perceive to be reality and not on the basis on objective
reality (what is actually true).
• Thus, to the marketers, consumer’s perceptions are much
more important than their knowledge of objective reality
(what is actually true).

25. Elements of Perception
Individuals are very selective as to which stimuli they
“recognize”; they subconsciously organize the stimuli they
do recognize according to widely held psychological
accordance with their personal needs, expectations, and
experiences. The dynamics of perception is based on 3
things:
• Perceptual Selection
• Perceptual Organization
• Perceptual Interpretation

26. Attitude
• Basics & Nature of Attitude
• In Consumer Behavior context, an attitude is learned predisposition
(tendency) to behave in a consumer favorable or unfavorable way with
respect to a given object.
• Consumer researchers assess attitudes by asking questions or making
inferences from behavior.
• Example: If a researcher determine from questioning a consumer that he
consistently buys Secret deodorant and even recommends the product to
friends, the researcher is likely to infer that the consumer possesses a
positive attitude towards this brand of deodorant.
• The attitudes are not directly observable but must be inferred from what
people say or what they do.

27. Models of Attitude
1. Tri-Component Model of Attitude
• According to this model, attitudes consist of 3 major components:
cognitive component, an affective component, and a conative
component.
• Cognition: The cognitive component is developed by previous experience
& related information about a product.
• Affect: A consumer’s emotions or feeling about a particular product or
brand constitute the affective component of an attitude.
• Conation: The conative component is concerned with the likelihood or
tendency that an individual will undertake a specific action. Ex: It is
consumer’s intention to buy.
Conation
Cognition
Affect

28. Learning
• Consumer Learning is defined as the process by which individuals acquire the
purchase & consumption knowledge & experience that they apply to future
related behavior.
• For learning to happen, certain basic elements must be present, such as –
Motivation, Cues, Response, & reinforcement.
Elements of Consumer Learning
• Motivation: It is important for learning because it is based on needs & goals. Ex:
Losing weight (is the aim)
• Cues: Cues are the stimuli that give direction to these motives. Ex: Bicycle riding
reduces weight
• Response: How individuals react to a cue- constitute their response.
• Reinforcement: By reinforcement a specific cue can be strengthened. Ex:
Reinforcement of Micro-Max mobile.

29. Marketing Application of Learning Theories
• Repeating advertising messages about brands & their benefits,
rewarding people for purchase behavior by selling products that provide
superior benefits, getting consumers to make association among
different offerings under the same brand name, and developing brand
loyalty are all elements of consumer learning.
• How individuals learn is a matter of great interest and importance to
academicians, to psychologists, to consumer researchers, and to
marketers.
• Marketers want their communications to be noted, believed,
remembered, and recalled.
• For these reasons, they are interested in every aspect of the learning
process.

30. Situational influences
• Situational influences that have an impact on
the purchase decision process are:
(1) the purchase task,
(2) social surroundings,
(3) physical surroundings,
(4) temporal effects, and
(5) antecedent states

31. The Nature of Situational Influence
• The purchase decision & consumption process always occur in the
context of a specific situation.
• Before examining the decision process, we must first develop an
understanding of situations.
• Situational influence is defined as all those factors particular to a time
& place that do not follow from a knowledge of personal & stimulus
(choice alternative) attributes & that have an effect on current
behavior.
• The consumption process occurs within four broad categories or types
of situations:
1. The communication situation
2. The purchase situation
3. The usage situation
4. The disposition situation

32. The Nature of Situational Influence
1. The communication situation: The situation in which consumers
receive information has an impact on their behavior. Ex: Difficulty of
marketer communicating in situations like- final exams begin
tomorrow, you have flu, your favorite team just lost the most
important game of the year.
2. The purchase situation: Situations can also affect product selection in
a purchase situation. Ex: Shortage of time can affect store choice, or
brand choice, or buying that product totally. Marketers should
understand how purchase situations influence consumers in order to
develop marketing strategies that enhance the purchase of their
products.

33. The Nature of Situational Influence
3. The usage situation: What clothes would you prefer to wear in each of
the following usage situations.
• On a festival
• On a picnic with your friends
• On the college graduation day
Marketers need to understand the usage situations for which their
products are, or may become, appropriate. Knowing this will help the
position their products properly. Ex: Cadbury.
4. The disposition situation: Marketers should encourage socially
responsible disposition decisions. Disposition situation can create
situation social problems as well as opportunities for marketers. Ex:
What happens if there is no Dust Bin beside a bakery? Many customers
might avoid that bakery. Customers some times think about the
disposal problems while purchasing.

34. Consumer Decision-Making
Process
Postpurchase
Behavior
Purchase
Evaluation
of Alternatives
Information Search
Need Recognition
Cultural, Social,
Individual and
Psychological
Factors
affect
all steps

35. • Problem Recognition
• Pre Purchase Information Search
– Personal Sources
– Commercial Sources
– Public Sources
– Experimental Sources
• Evaluation of Alternatives
– Beliefs
– Attitudes
– Criteria
– Intentions
• Purchase Decision
• Post Purchase Behavior
– Post purchase satisfaction
– Post purchase actions
– Post purchase use & Disposal

36. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Consumer Buying Decision
Process
Successive Sets Involved in Consumer Decision Making

37. Evaluation of Alternatives
• Customers evaluate products as bundles of attributes
– Brand attributes
– Product features
– Aesthetic attributes
– Price
• Customers place different levels of importance on
attributes
• Important considerations in the evaluation stage:
– Products must be in the evoked set
– Consumers’ choice criteria must be understood
– Marketing programs must be designed to influence
consumers’ opinions about product or brand image

38. Purchase Decision
• Purchase intention and the act of buying are distinct
concepts
• Potential intervening factors between intention and
buying (car example):
– Unforeseen circumstances
– Angered by the salesperson or sales manager
– Unable to obtain financing
– Customer changes mind
• Key issues in the purchase decision stage:
– Product availability
– Possession utility

39. Postpurchase Evaluation
• Four possible outcomes in the postpurchase stage:
– (1) Delight
– (2) Satisfaction
– (3) Dissatisfaction
– (4) Cognitive Dissonance
• Firm’s ability to manage dissatisfaction and cognitive
dissonance is:
– A key to creating customer satisfaction
– A major influence on word-of-mouth communication

40. Buyer Roles: The Decision Making Unit
• Initiator: the person who first suggests or thinks of the idea of
buying a particular product or service.
• Influencer: a person whose views or advice carry weight in making
the final buying decision
• Decider: the person who ultimately makes the final buying decision
or any part of it
• Buyer: the person who makes the actual purchase
• User: the person who consumes the product or service
Other people often influence a consumers purchase decision.
The marketer needs to know which people are involved in the
buying decision and what role each person plays, so that
marketing strategies can also be aimed at these people.
(Kotler et al, 1994).
Note: teens are increasingly assuming more of these roles
Think about your past purchase– who was in which role?

41. Buying Motives of Consumer
• Motive is the inner urge that moves or prompts a
person to some action. Motive is an effectual desire
that prompts one to a definite action.
• Customers purchase any good as a result of certain
mental and economic forces that create desires or
wants. Motive can be strong desire, feeling an urge
from within, a drive, stimulus or emotions, which
plays a role in the consumer’s decision to purchase
product/service

42. Types of Buying Motives
• Desire for gain
• Fear of loss
• Comfort and convenience
• Security and protection
• Pride of ownership
• Emotional satisfaction

43. A Simple Model of Consumer Decision Making
Firm’s Marketing Efforts
1. Product
2. Promotion
3. Price
4. Channels of distribution
Socio-cultural Environment
1. Family
2. Informal source
3. Other noncommercial
sources
4. Social class
5. Culture and subculture
Need Recognition
Pre-purchase Search
Evaluation of Alternatives
Psychological Field
1. Motivation
2. Perception
3. Learning
4. Personality
5. Attitudes
Purchase
1. Trial
2. Repeat purchase
Experience
Post-purchase Evaluation
Input
Process
Output
External Influences
Consumer Decision Making
Post Decision Behavior

44. Post purchase Behavior
Can minimize through:
Effective Communication
Follow-up
Guarantees
Warranties
Underpromise &
overdeliver
Cognitive Dissonance
?Did I make a good decision?
Did I buy the right product?
Did I get a good value?

45. Engel-Kollat-Blackwell Model of
Consumer Behavior
Inputs Info Processing
Decis. making
Process
Decision.
Process.
Variables
External
Factors
StimuliofMarketersandOthers
Exposure
Attention
Yielding/
Acceptance
Retention
Comprehension
MEMORY
Problem
Recognition
Search
Alt. Eval.
Choice.
Outcomes
Satisf/Diss
Beliefs
Attitudes
Intentions
Evaluative
Criteria
Lifestyle
Normative
Compliance
Cultural
Norms
Group
Imfluence
Family
Influence
Unexpected
Circum-
stances

46. Engle-Kollatt-Blackwell CB Model
Highlights:
Focus is on the Decision Making Process
The Decision Process is Impacted by:
Inputs
How Information is Processed
Specific Decision Process Variables
External Influences

47. Marketing Strategy andConsumer BehaviorHoward-Sheth CB Model
Highlights:
Deals with three types of buying categories
Four General Factors
Inputs
Perceptual Constructs
Learning Constructs
Outputs (External or Internal)

48. Howard-Sheth CB Model of
Consumer Behavior
SITUATIONS
Problem
Recognition
Information
Search
Alternative Evaluation
and Selection
Outlet Selection
and Purchases
Post-purchase
Processes
SITUATIONS
EXTERNAL INFLUENCES
Culture
Subculture
Demographics
Social Status
Reference Groups
Family
Marketing Activities
INTERNAL INFLUENCES
Perception
Learning
Memory
Motives
Personality
Emotions
Attitudes
SELF-CONCEPT
and
LIFESTYLE
Desires
Experiences and Acquisitions
Experiences and Acquisitions
Needs

49. Complete model of consumer behavior
Search
Need
recognition
Alternative
evaluation
Purchase
Stimuli
(marketer
dominated,
other)
External
search
Memory
Internal
search
Exposure
Attention
Comprehension
Acceptance
Retention Outcomes
Dissatisfaction Satisfaction
Individual
differences
• resources
• motivation &
involvement
• knowledge
• attitudes
• personality,
values, lifestyle
Influences
• culture
• social class
• family
• situation
Start

50. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Persuasion Word Wall
Argument
What the author wants the audience to do or believe.
Issue
the topic
dispute
Points
Reasons to support the
argument
Counter-Argument
Arguments for the
opposing side
Call to Action
Specific things the author wants the audience to do to make
what the author is arguing a reality
Methods
The strategies
authors use to
develop their
arguments in
ways that are
appropriate
for their
audience.
 appeals to
emotion
 appeals to
logic / reason
etc.
Evidence
something that is used
to demonstrate truth
& Explanation
Rebuttal
Evidence &
Explanation
used to refute the
counter-argument
Types of
Evidence
• examples
• facts
• statistics
• testimony
etc.
Audience
the person
who the
author
believes has
the power to
make this
change