Module-2-Consumer Behavior Analysis

Consumer Behaviour Analysis: Meaning and Characteristics, Importance, Factors

Influencing Consumer Behaviour, Consumer Purchase Decision Process, Buying Roles,
Buying Motives, Buyer Behaviour Models.

Consumer Behaviour:
Consumer behavior is the study of how individuals, groups and organizations select, buy, use
and dispose of goods, services, ideas or experiences to satisfy their needs and wants.

Eg. In order to overcome the problem of low involvement of the end customers in the purchase
process of steel, Tata Steel launched an organized retail store ―steel junction‖ in Kolkata. Houses
a wide variety of products made from steel and has four distinct departments. Home
construction and solution department – bathroom and door fittings, hardware items, lightings,
locks, garden tools etc. A furniture department includes indigenous and imported steel furniture
and kitchenware and lifestyle departments that have items like cutlery, jewelry and decorative
pieces. Ambience of the shop encourages families and women to step in. Presence of a cafeteria
and books, journals and magazines on various grades of steel and their usage.
Success of this unique initiative reflects the company‘s ability to anticipate and respond to the
changing preferences and lifestyles of customers.

Characteristics of Consumer Behaviour:

1. Influenced by various factors:

The various factors that influence the consumer behaviour are as follows:
a. Marketing factors such as product design, price, promotion, packaging, positioning and dis-
tribution.

b. Personal factors such as age, gender, education and income level.

c. Psychological factors such as buying motives, perception of the product and attitudes towards
the product.

d. Situational factors such as physical surroundings at the time of purchase, social surroundings
and time factor.

e. Social factors such as social status, reference groups and family.

f. Cultural factors, such as religion, social class—caste and sub-castes.

2. Undergoes a constant change:

Consumer behaviour is not static. It undergoes a change over a period of time depending on the

nature of products. For example, kids prefer colourful and fancy footwear, but as they grow up as

teenagers and young adults, they prefer trendy footwear, and as middle-aged and senior citizens
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they prefer more sober footwear. The change in buying behaviour may take place due to several
other factors such as increase in income level, education level and marketing factors.

3. Varies from consumer to consumer:

All consumers do not behave in the same manner. Different consumers behave differently. The

differences in consumer behaviour are due to individual factors such as the nature of the

consumers, lifestyle and culture. For example, some consumers are technoholics. They go on a
shopping and spend beyond their means.

They borrow money from friends, relatives, banks, and at times even adopt unethical means to

spend on shopping of advance technologies. But there are other consumers who, despite having

surplus money, do not go even for the regular purchases and avoid use and purchase of advance
technologies.

4. Varies from region to region and country to county:

The consumer behaviour varies across states, regions and countries. For example, the behaviour

of the urban consumers is different from that of the rural consumers. A good number of rural
consumers are conservative in their buying behaviours.

The rich rural consumers may think twice to spend on luxuries despite having sufficient funds,

whereas the urban consumers may even take bank loans to buy luxury items such as cars and

household appliances. The consumer behaviour may also varies across the states, regions and
countries. It may differ depending on the upbringing, lifestyles and level of development.

5. Information on consumer behaviour is important to the marketers:

Marketers need to have a good knowledge of the consumer behaviour. They need to study the
various factors that influence the consumer behaviour of their target customers.
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The knowledge of consumer behaviour enables them to take appropriate marketing

decisions in respect of the following factors:

a. Product design/model

b. Pricing of the product

c. Promotion of the product

d. Packaging

e. Positioning

f. Place of distribution

6. Leads to purchase decision:

A positive consumer behavior leads to a purchase decision. A consumer may take the decision of

buying a product on the basis of different buying motives. The purchase decision leads to higher

demand, and the sales of the marketers increase. Therefore, marketers need to influence
consumer behavior to increase their purchases.

7. Varies from product to product:

Consumer behaviour is different for different products. There are some consumers who may buy
more quantity of certain items and very low or no quantity of other items. For example, teenagers

may spend heavily on products such as cell phones and branded wears for snob appeal, but may

not spend on general and academic reading. A middle- aged person may spend less on clothing,
but may invest money in savings, insurance schemes, pension schemes, and so on.

8. Improves standard of living:

The buying behaviour of the consumers may lead to higher standard of living. The more a person
buys the goods and services, the higher is the standard of living. But if a person spends less on
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goods and services, despite having a good income, they deprives themselves of higher standard
of living.

9. Reflects status:
The consumer behaviour is not only influenced by the status of a consumer, but it also reflects it.

The consumers who own luxury cars, watches and other items are considered belonging to a
higher status. The luxury items also give a sense of pride to the owners.

Factors influencing Buying Behaviour:

Reference Motivation
groups Social Factors Psychological Perception
Family Cultural Factors Factors Learning
Role and Status Memory

Marketing Mix
Product Personal  Age and Stage in
Price Factors the Life cycle
Place  Occupation and
Promotion Economic
Circumstances
 Personality and
Lifestyle

Cultural Factors – Culture, subculture and social class are particularly important influences on
consumer buying behavior. . Marketing people look for cultural shifts to find out new products
that may be demanded. Concern about health and fitness is a cultural shift which created a
market for health equipment, health drinks, slimming centres etc. Similarly, the shift towards
western culture created demand for casual clothing like jeans, T-shirts, tops etc.

Social Factors – Reference groups, family and social role and status.
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 Reference groups – All the groups that have a direct or indirect influence on their
attitudes or behavior. Groups having a direct influence are called membership groups.

o Primary Groups – Person interacts fairly continuously and informally, such as family,
friends, neighbors and coworkers.

o Secondary Groups – More formal and require less continuous interaction, such as
religious, professional and trade union groups.

o Roles and Status - People choose products that reflect and communicate their role and
actual or desired status in society. Vice president of a company has more status than a
sales manager and sales manager has more status than an office boy. They choose the
products according to their status.

Personal Factors

 Age and Stage in the life cycle – Taste in food, clothes, furniture and recreation is often
age-related. Marketers should also consider life events like marriage, childbirth, illness,
relocation, divorce, career change; widowhood as giving rise to new needs .Young boy
demands Jean and T-shirt whereas a senior citizen person needs walking stick.

Bachelors spend more in bikes whereas married couples look for cars.

 Occupation and economic circumstances – A blue collar worker will buy work clothes,
work shoes and lunch boxes. A company president will buy dress suits, air travel and
country club members. Doctors will buy stethoscope, whereas a lecturer purchases
marker pens and laptops.

 Personality –Brands also have personalities and consumers are likely to choose brands
whose personalities match their own.
Levi‘s – Ruf n Tuf, MTV – excitement, CNN – competence.
 Lifestyle and values : Life style of the people are changing. They are looking for ready
to eat meals, yoga, fitness centres and organic foods. Consumers can be –
Money constrained – Create low cost products and services.
Eg . Walmart – Everyday low prices, Low cost Airlines
Time constrained – Convenient products, Shopping Malls, Maggi Noodles

Maslow’s Theory of Motivation

Abraham Maslow sought to explain why people are driven by particular needs at particular
times. According to Maslow, human needs are arranged in a hierarchy, from the most pressing to
the least pressing. In their order of importance, they are physiological needs, safety needs, social
needs, esteem needs and self-actualization needs. People will try to satisfy their most important
needs first. When a person succeeds in satisfying an important need, that need will cease being a
current motivator, and the person will try to satisfy the next-most important need. For example, a
starving man (need 1) will not take an interest in Yoga, Meditation (need 5), nor in how he is
 Module-2-Consumer Behavior Analysis

viewed by others (need 3 or 4), nor even in whether he is breathing clean air (need 2), But when
he has enough food and water, the next most important need will become salient.

Maslow’s Hierarchy of needs

Self-actualization needs (self-

development and realization)

Esteem needs (self esteem, recognition, status)

Social needs (sense of belonging, love)

Safety Needs (security, protection)

Physiological needs (food, water, shelter)

Perception

A motivated person is ready to act. How he or she acts is influenced by his or her view of the
situation. Perception affects consumer‘s actual behavior. Perception is influenced due to:

Selective Attention – People exposed to 150 ads a day. Screen most stimuli out and pay
attention to only few – selective attention. Marketers must work hard to attract consumer‘s
notice.

Selective Distortion – Tendency to interpret information in a way that fits our preconceptions.
Often distorts information to be consistent with our favourite brand and product beliefs and
expectations.

Selective Retention – Don‘t remember much of the information to which we are exposed, but do
retain information that supports our attitudes and beliefs.

Learning
When we act, we learn.
 A person buys HP computer and her experience is very good. Later on when she buys a
printer, she purchases HP printer only assuming that as HP makes good computers, it also
makes good printers .( Generalize the response to similar stimuli.)
 But if she buys IBM printer, assuming that it is light weight, then its discrimination.

Memory
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All the information and experiences we encounter, as we go through life can end up in our long
term memory.
Levi’s Comfortable
Ruf n Tuf

Trendy

Consumer Purchase Decision Process:

Problem Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Post-purchase Decision

 Problem Recognition: The buying process starts when the buyer recognizes a problem
or need. The need can be trigged by internal or external stimuli. For eg. If a student is
finding difficulty in preparing notes in the absence of laptop, that can be considered as a
problem.
 Information search: At a milder level, person becomes more receptive to information
about the product. At the next level person starts looking for reading material, phones
friends and engages in other activities to learn more about the product.
Consumer information sources fall into four groups:
 Personal sources – Family, friends, neighbors, acquaintances.
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 Commercial sources – Advertising, salespersons, dealers, packaging, displays.

 Public sources – Mass media, consumer-rating organizations.
 Experiential sources – Handling, examining, using the product.
Search Dynamics

(Total set) of brands (Awareness set) (Consideration (Choice set)

Consumer will Decision
available to the set) Brands Strong
consumer come to know meeting initial contenders
only a subset of buying criteria
these brands

 Evaluation of alternatives – There is no simple and single evaluation process used by all
consumers or by one consumer in all buying situations.
Attributes of interest to buyers vary by product :
Hotels – location, cleanliness, atmosphere, price.
Mouthwash – Color, effectiveness, taste, germ killing capacity.

Expectancy Value Model – It can be calculated by multiplying the weight attached to each of the
shortlisted attribute (in percentage) by beliefs about each brand‘s attributes.

Customer‘s perceived value for each brand = Weight of the attribute (in percentage) x Beliefs
about each brand‘s attribute.

 Purchase Decision – The consumer forms preferences among the brands in the choice
set. The consumer may also form an intention to buy the most preferred brand.
Intensity of other person’s
negative attitude towards our
preferred alternative
Attitudes of others
Our motivation to comply with
Five purchase sub decisions – the person’s wishes

 Brand decision
 Vendor decision
 Quantity decision
 Timing decision
 Payment method decision
 Post purchase behavior – The marketer‘s job does not end when the product is bought
but continues into the post purchase period.
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 Post purchase satisfaction – If the product‘s performance falls short of customer

expectations, the customer is disappointed; if it meets expectations, the customer is
satisfied; if it exceeds expectations, the customer is delighted.
 Post purchase use and disposal – Marketers should study the product consumption rate-
the] more quickly buyers consume the product, the sooner they will repurchase it.
Provide customers with better information about either – i) when they first use the
product or need to replace it. Ii) Its current level of performance.
Batteries have built-in gauges to show how much power is left.
Brushes have color indicators to indicate when the bristles are worn.

Buying roles:
 Initiator – A person who first suggests or thinks of the idea of buying the product. Eg.
Patient
 Influencer – Person whose view or advice influences the decision. Eg. Doctor or
Chemist
 Decider – Decides on any component of a buying decision – whether to buy, what to
buy, how to buy and where to buy. Eg.Patient or his relative.
 Buyer – who makes the actual purchase.Eg. Patient or his relative
 User – who consumes or uses the product or service. Eg. Patient

Buying Motives:

A motive is simply a reason for carrying out a particular behaviour and not an automatic
response to a stimulus, whereas instincts are pre-programmed responses, which are inborn in the
individual and involuntary. Thus hunger is an instinct whereas desire to purchase pizza is a
buying motive. According to Prof. D. J. Duncan, ―Buying Motives are those influences or
considerations which provide the impulse to buy, induce action and determine choice in the
purchase of goods and services.‖ Buying motives are can be divided by the following way:

Emotional Product Motives:

1. Pride or Prestige:

Pride is the most common and strongest emotional buying motive. Many buyers are proud of
possessing some product (i.e., they feel that the possession of the product increases their social
prestige or status). In fact, many products are sold by the sellers by appealing to the pride
prestige of the buyers. For instance, diamond merchants sell their products by suggesting to the
buyers that the possession of diamonds increases their prestige or social status.

2. Emulation or Imitation:
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Emulation, i.e., the desire to imitate others, is one of the important emotional buying motives.
For instance, a housewife may like to have a silk saree for the simple reason that all the
neighbouring housewives have silk sarees.

3. Affection:
Affection or love for others is one of the stronger emotional buying motives influencing the
purchasing decisions of the buyers. Many goods are purchased by the buyers because of their
affection or love for others. For instance, a husband may buy a costly silk saree for his wife or a
father buy a costly watch for his son or daughter out of his affection and love.

4. Comfort or desire for comfort:

Desire for comfort (i.e., comfortable living) is one of the important emotional buying motives. In
fact, many products are bought comfort. For instance, fans, refrigerators, washing machines,
cushion beds, etc. are bought by people because of their desire for comfort.

5. Ambition:
Ambition is one of the emotional buying motives. Ambition refers to the desire to achieve a
definite goal. It is because of this buying motive that, sometimes, customers buy certain things.
For instance, it is the ambition that makes many people, who do not have the facilities to pursue
their college education through regular colleges, pursue their education through correspondence
courses.

6. Desire for distinctiveness or individuality:

Desire for distinctiveness, i.e., desire to be distinct from others, is one of the important emotional
buying motives. Sometimes, customers buy certain things, because they want to be in possession
of things, which are not possessed by others. Purchasing and wearing a particular type of dress
by some people is because of their desire for distinctiveness or individuality.

7. Desire for recreation or pleasure:

Desire for recreation or pleasure is also one of the emotional buying motives. For instance,
radios, musical instruments, etc. are bought by people because of their desire for recreation or
pleasure.

8. Hunger and thirst:

Hunger and thirst are also one of the important emotional buying motives. Foodstuffs, drinks,
etc. are bought by the people because of this motive.

9. Habit:
Habit is one of the emotional considerations influencing the purchasing decision of the
customers. Many customers buy a particular thing because of habit, (i.e. because they are used to
the consumption of the product). For instance, many people purchase cigarettes, liquors, etc.
because of sheer habit.
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B. Rational Product Buying Motives:

When a buyer decides to buy a certain thing after careful consideration (i.e. after thinking over
the matter consciously and logically), s/he is said to have been influenced by rational product
buying motives. Rational product buying motives include the following:

1. Safety or Security:
Desire for safety or security is an important rational buying motive influencing many purchases.
For instance, iron safes or safety lockers are bought by the people because they want to
safeguard their cash, jewelries etc., against theft. Similarly, vitamin tablets, tonics, medicines,
etc., are bought by the people because of this motive, i.e. they want to safeguard their health and
protect themselves against diseases.

2. Economy:
Economy, i.e. saving in operating costs, is one of the important rational buying motives. For
instance, Hero Honda bikes are preferred by the people because of the economy or saving in the
operating cost, i.e. petrol costs.

3. Relatively low price:

Relatively low price is one of the rational buying motives. Most of the buyers compare the prices
of competing products and buy things, which are relatively cheaper.

4. Suitability:
Suitability of the products for the needs is one of the rational buying motives. Intelligent buyers
consider the suitability of the products before buying them. For instance, a buyer, who has a
small dining room, naturally, goes in for a small dining table that is suitable, i.e. that fits in well
in the small dining room.

5. Utility or versatility:
Versatility or the utility of a product refers to that quality of the product, which makes it suitable
for a variety of uses. Utility of the product is one of the important rational buying motives.
People, often, purchase things that have utility, i.e. that can be put to varied uses.

6. Durability of the product:

Durability of the product is one of the most important rational buying motives. Many products
are bought by the people only on the basis of their durability. For instance, buyers of wooden
furniture go in for teak or rosewood table, though they are costlier, as they are more durable than
ordinary wooden furniture.

7. Convenience of the product:

The convenience of the product (i.e. the convenience the product offers to the buyers) is one of
the important rational product buying motives. Many products are bought by the people because
they are more convenient to them. For instance, automatic watches, gas stoves, etc., are bought
by the people because of the convenience provided by them.
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Patronage Buying Motives:

Patronage buying motives refer to those considerations or reasons, which prompt a buyer to buy
the product wanted by him from a particular shop in preference to other shops. In other words,
they are those considerations or reasons, which make a buyer, patronise a particular shop in
preference to other shops while buying a product.

Patronage buying motives also may be sub-divided into two groups viz. a) Emotional patronage
buying motives and b) Rational patronage buying motives.

A. Emotional Patronage Buying Motives:

When a buyer patronises a shop (i.e. purchases the things required by him from a particular shop)
without applying his mind or without reasoning, he is said to have been influenced by emotional
patronage buying motives. Emotional patronage buying motives include the following:

1. Appearance of the shop:

Appearance of the shop is one of the important emotional patronage buying motives. Some
people make their purchases from a particular shop because of good or attractive appearance of
the shop,

2. Display of goods in the shop:

Attractive display of goods in the shop also makes the buyers patronise a particular shop.

3. Recommendation of others:
Recommendation of others also constitutes one of the important emotional patronage buying
motives. Some people purchase their requirements from a particular shop because that shop has
been recommended to them by others, i.e., by their friends and relatives.

4. Imitation:
Imitation also is one of the emotional patronage buying motives influencing the purchases of
buyers. Some people make their purchases from a particular shop just because other people make
their purchases from that shop.

5. Prestige:
Prestige is one of the emotional patronage buying motives of the buyers. For instance, some
people consider it a prestige to take coffee from a five-star hotel.

6. Habit:
Habit is also one of the important emotional patronage buying motives. Some people make their
purchases from a particular shop for the simple reason that they have been habitually making
their purchases from that shop.

B. Rational Patronage Buying Motives:

When a buyer patronises a shop after careful consideration (i.e. after much logical reasoning and
careful thinking) he is said to have been influenced by rational patronage buying motives.
Rational patronage buying motives include the following:
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1. Convenience:
Convenient location proximity of a shop is one of the considerations influencing the purchases of
many buyers from a particular shop. Many buyers, usually, buy their requirements from a near-
by shop, as it is convenient to them to make their purchases.

Similarly, convenient working hours of the shop also influence the purchases of good many
buyers. For instance, if a shop works for a longer period of time every day and even on Sundays,
it will be very convenient to the buyers. As such, many buyers may make their purchases from
such a shop.

2. Low price charged by the shop:

Price charged by the shop also influences the buyers to patronise a particular shop. If the price
charged by a shop for a particular product is relatively cheaper, naturally, many people will make
their purchases from that shop.

3. Credit facilities offered:

The credit facilities offered by a store also influence the buying of some people from a particular
shop. People who do not have enough money to make cash purchases every time prefer to make
their purchases from a shop which offers credit facilities.

4. Services offered:
The various sales and after-sale services, such as acceptance of orders through phone, home
delivery of goods, repair service, etc., offered by a shop also induce the buyers to buy their
requirements from that shop. Rational buyers are, often, influenced by the various services or
facilities offered by the shop.

5. Efficiency of salesmen:
The efficiency of the salesmen employed by a shop also influences the people in patronising a
particular shop. If the employees are efficient and are capable of helping the buyers in making
their purchases, people naturally would flock to such a shop.

6. Wide choice:
Wide choice of goods offered by a shop is one of the rational considerations making the buyers
patronise a particular shop. People generally prefer to make their purchases from a shop, which
offers wide choice (i.e. wide varieties of goods).

7. Treatment:
The treatment meted out by a shop to the customers is one of the rational considerations
influencing the buyers to patronise a particular shop. Usually, people would like to purchase their
requirements from a shop where they get courteous treatment.

8. Reputation of the shop:

Reputation of the shop for honest dealings is also one of the rational patronage buying motives.
Usually, people would like to make their purchases from a store having reputation for fair
dealings.
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Consumer Behaviour Models:

Maslow’s Theory of Motivation

Abraham Maslow sought to explain why people are driven by particular needs at particular
times. According to Maslow, human needs are arranged in a hierarchy, from the most pressing to
the least pressing. In their order of importance, they are physiological needs, safety needs, social
needs, esteem needs and self-actualization needs. People will try to satisfy their most important
needs first. When a person succeeds in satisfying an important need, that need will cease being a
current motivator, and the person will try to satisfy the next-most important need. For example, a
starving man (need 1) will not take an interest in Yoga, Meditation (need 5), nor in how he is
viewed by others (need 3 or 4), nor even in whether he is breathing clean air (need 2), But when
he has enough food and water, the next most important need will become salient.

Maslow’s Hierarchy of needs

Self-actualization needs (self-

development and realization)

Esteem needs (self esteem, recognition, status)

Social needs (sense of belonging, love)

Safety Needs (security, protection)

Physiological needs (food, water, shelter)

Economic Man Model
In this model, consumers follow the principle of maximum utility based on the law of
diminishing marginal utility. Economic man model is based on the following effects −

 Price Effect − Lower the price of the product more will be the quantity purchase.

 Substitution Effect − Lower the price of the substitute product, lower will be the utility
of the original product purchase.

 Income Effect − When more income is earned, or more money is available, quantity
purchased will be more. The economic theory of buyer‘s decision-making was based on
the following assumptions −

As consumer resources are limited, he would allocate the available money which will maximize
the satisfaction of his needs & wants.

Consumers have complete knowledge about the utility of each product and service, i.e., they are
capable of completing the accurate satisfaction that each item is likely to produce.
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As more units of the same item are purchase the marginal utility or satisfaction provided by the
next unit of the item will keep on decreasing, according to the law of diminishing marginal
utility.

Price is used as a measure of sacrifice in obtaining the goods or services. The overall objective
of the buyer is to maximize his satisfaction out of the act of purchase.

Learning Model
This model suggests that human behavior is based on some core concepts − the drives, stimuli,
cues, responses and reinforcements which determine the human needs and wants and needs
satisfying behavior.

 Drive − A strong internal stimulus which compels action.

 Stimuli − These are inputs which are capable of arousing drives or motives.

 Cues − It is a sign or signal which acts as a stimulus to a particular drive.

 Response − The way or mode in which an individual reacts to the stimuli.

If the response to a given stimulus is ―rewarding‖, it reinforces the possibility of similar

response when faced with the same stimulus or cues. Applied to marketing if an informational
cue like advertising, the buyer purchases a product (response); the favourable experience with
the product increases the probability that the response would be repeated the next time the need
stimulus arises (reinforcement).

The Psychoanalytic Model − The model suggests that human needs operate at various levels of
consciousness. His motivation which is in these different levels, are not clear to the casual
observer. They can only be analyzed by vital and specialized searching.

Sociological Model − This is concerned with the society. A consumer is an element of the
society and he may be a member of many groups and institutions in a society. His buying
behavior is influenced by these groups. Primary groups of family friend‘s relatives and close
associates extract a lot of influence on his buying. A consumer may be a member of a political
party where his dress norms are different from different member. As a member of an elite
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organization, his dress needs may be different, thus he has to buy things that confirm to his
lifestyle in different groups.

The Nicosia Model-The Nicosia Model and Howard Sheth Models are two important ones in
this category.Both of them belong to the category called system model,where the human being
is analysed as a system with stimuli as the input to the system and behavior as the output of the
system.

Francesco Nicosia,an expert in consumer motivation and behavior put forward his model of
buyer behavior in 1966.The model tries to establish the links between a firm and its consumer.-
how the activities of the firm influence the consumer and result in his decision to buy. The
messages from the firm first influences the Predisposition of the consumer towards the
product.Depending on the situation,he develops a certain attitude towards the product.It may
lead to a search for the product or an evaluation of the product.If these steps have a positive
impact on him,it may result in a decision to buy.This is the sum and substance of the ―activity
explainations‖in the Nicosia Model.

The Howard-Sheth Model:

John Howard and Jagdish sheth put forward the Howard and sheth model in 1969,in their
publication entitled ―The theory of Buyer Behaviour‖The logic of the model runs like this:
There are inputs in the form of stimuli.There are outputs beginning with attention to a given
stimulus and ending with purchase.In between the inputs and the outputs,there are variables
affecting perception and learning.These variables are considered ‗hypothetical‘since they cannot
be directly measured at the time of occurrence.

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