Role of Consumer Behaviour in Marketing

Consumer Behaviour refers to the study of buying tendencies of consumers. An individual who goes
for shopping does not necessarily end up buying products. There are several stages a consumer goes
through before he finally picks up things available in the market. Various factors, be it cultural,
social, personal or psychological influence the buying decision of individuals.

Marketers need to understand the buying behaviour of consumers for their products to do well. It is
really important for marketers to understand what prompts a consumer to purchase a particular
product and what stops him from buying.

What marketers need to understand ?

The psychology of consumers (what they feel about a particular product and their brand on the
whole).

How consumers are influenced by their immediate surroundings, family members, friends, co
workers and so on.

What a consumer thinks when he goes out for shopping ?

A marketer needs to first identify his target consumers and understand their lifestyles, psychologies,
income, spending capabilities, mentalities to offer them the right product.

Individuals from lower income group would never be interested in buying expensive and luxurious
products. He would first fulfill his basic physiological needs like food, air, water etc. Trying to sell a
Mercedes or a Rado watch to someone who finds it difficult to make ends meet would definitely be a
disaster.

Kellogg’s K special would hardly find any takers in the low income group. In this segment, individuals
would be more interested in buying fresh fruits, vegetables, pulses which are necessary for their
survival rather than spending on health supplements.

It is really essential for the marketers to understand the needs of consumers. Find out what they are
actually looking for?

There are ideally two different ways which enable marketers to understand their consumers.

Primary Research

Secondary Research
Primary Research - Primary Research refers to a research methodology where marketers interact
with consumers directly and gather as much information as they can. Information is generally
collected through surveys, questionnaires, feedback forms, interviews etc.

Secondary Research - Secondary Research often refers to relying on information which has been
collected by others at some point of time.

The background and family status of an individual also influence his/her buying behaviour.

Selling a laptop to an individual who is not much educated would be pointless. Remember
consumers would show interest in your products only if they are of any use to them or their
immediate family members. A low grade worker would never be interested in purchasing business
suits or formal shirts.

Canned juices are a hit among middle and higher income group where individuals are really
conscious about their health and fitness. Individuals who live hand to mouth would never spend on
sugar free tablets, health supplements, or for that matter “Diet Coke”.

It is also important to give complete information to end-users. Do not hide anything from them. It is
not ethical. All tobacco products come with a warning. Individuals should be familiar with not only
the benefits but also the side effects of the products.

Marketers must also take into account:

Age group of consumers

Geographical location

Lifestyle of consumers

Social Status of consumers

Funky designs, loud colours would be a hit among teenagers whereas middle aged and elderly
people would prefer subtle colours and sophisticated designs.

Salwar Suits are extremely popular in North India whereas females prefer saris and skirt blouses in
eastern and southern parts of India.

Individuals from posh localities and good jobs would show keen interest towards buying exclusive
and unique products as compared to individuals who do not come from an affluent background.

What is consumer behavior?

Consumer behavior is the study of individuals and organizations and how they select and use
products and services. It is mainly concerned with psychology, motivations, and behavior.

The study of consumer behavior includes:

How consumers think and feel about different alternatives (brands, products, services, and retailers)

How consumers reason and select between different alternatives

The behavior of consumers while researching and shopping

How consumer behavior is influenced by their environment (peers, culture, media)

How marketing campaigns can be adapted and improved to more effectively influence the consumer

Shopping bags.
These considerations are influenced by three factors:

Personal factors – A person’s interests and opinions. These will be affected by demographics such as
age, gender, culture, profession, background and so on.

Psychological factors – Everybody’s response to a particular marketing campaign will be based on

their perceptions and attitudes. A person’s ability to comprehend information, their perception of
their need, their attitude, will all play a part.

Social factors – Peer groups, from family and friends to social media influence. This factor also
includes social class, income, and education level.

Collecting consumer behavior data

As the motivations that influence consumer behavior are so wide, a research mix including a variety
of data will be the most robust. Some are more cost effective than others.

Customer Reviews – Reading customer reviews can highlight common problems or wishes.

Q&A sites – These sites can give you an idea of the questions and concerns that people have in
relation to your brand, service or product.

Surveys – Online surveys can be easily set up with sites like Survey Monkey and allow you to ask
specific questions.

Focus groups – Bring a group of consumers together and ask them questions directly.

Keyword research – A mainstay of SEO, keyword research can tell you what consumers are
interested in and the relative level of interest. It also helps to reveal the language they are using.

Google Analytics – Analytics can be used to tell you where your traffic is coming from. The Audience
tab shows geography, interests, and a range of demographics.

google analytics can help you understand customer behavior

Competitor analysis – This can provide useful information about consumers that are shopping in
your vertical but don’t buy from your brand. Read our post on the top competitor analysis tools.

Blog comments – Comments on your blog can be a good way of discovering any questions your
audience might have.

Twitter Insiders – Twitter recently launched Insiders, a 12,000 strong focus group of US & UK Twitter
users.

Google trends – Google Trends can help you to understand if a topic is becoming more or less
popular.

Government data – Government data is available for free and can help you understand a group, and
several other sources can also be accessed without charge.

Social media – Millions of people reflect their lives on social media, so information that can enrich
several strands of consumer behavior can be uncovered with the right tools.

Social intelligence and consumer behavior

The broadest thing social can help with is collecting consumer insights, found through social media
research, which can take all sorts of forms.
You can ask specific questions, or investigate consumers talking about your brand. It’s also a good
idea to go beyond your own brand and listen to consumers talking about your product category in
general.

Intent to purchase – You can gain a detailed understanding of the effect that marketing campaigns
have on your audience, beyond simple buzz.

Campaign analysis – Understand consumer response to your campaigns or track brand associations
and emotional response around them.

associated words

Sentiment analysis – Understand the sentiment about your brand or product, and how that changes
in different demographics.

As consumer behavior is about using the product as well as the motivations around buying it in the
first place, product reviews and feedback can be useful here, and help with product development.

Intelligent market segmentation – As everyone has different motivations, segmenting consumers

into groups is vital to understanding your customers in a nuanced way.

ome of the important personal factors are:

9 types of Consumers as per VALS framework

Innovators – The class of consumer at the top of the vals framework. They are characterized by
High income and high resource individuals for whom independence is very important. They have
their own individual taste in things and are motivated in achieving the finer things in life.

Thinkers – A well educated professional is an excellent example of Thinkers in the vals framework.
These are the people who have high resources and are motivated by their knowledge. These are the
rational decision making consumers and are well informed about their surroundings. These
consumers are likely to accept any social change because of their knowledge level.

Believers – The subtle difference between thinkers and believers is that thinkers make their own
decisions whereas believers are more social in nature and hence also believe other consumers. They
are characterized by lower resources and are less likely to accept innovation on their own. They are
the best class of word of mouth consumers.

Achievers – The achievers are mainly motivated by – guess what – Achievements. These individuals
want to excel at their job as well in their family. Thus they are more likely to purchase a brand which
has shown its success over time. The achievers are said to be high resource consumers but at the
same time, if any brand is rising, they are more likely to adopt that brand faster.

Strivers – Low resource consumer group which wants to reach some achievement are known as
strivers. These customers do not have the resources to be an achiever. But as they have values
similar to an achiever, they fall under the striver category. If a striver can gain the necessary
resources such as a high income or social status then he can move on to becoming an achiever.

Experiencers – The group of consumers who have high resources but also need a mode of self
expression are known as Experiencers. Mostly characterized by young adults, it consists of people
who want to experience being different. This class of consumers is filled up with early adopters who
spend heavily on food, clothing and other youthful products and services.
Makers – These are consumers who also want self expression but they are limited by the number of
resources they have. Thus they would be more focused towards building a better family rather than
going out and actually spending higher amount of money. Making themselves into better individuals
and families becomes a form of self expression for the Makers.

Survivors – The class of consumers in the Vals framework with the least resources and therefore the
least likely to adopt any innovation. As they are not likely to change their course of action regularly,
they form into brand loyal customers. An example can include old age pension earners living alone
for whom the basic necessities are important and they are least likely to concentrate on anything
else.

Thus the vals framework can be used primarily to classify consumers based on their values, attitudes
and lifestyle. Once the classification has been done, you know which types of customers you want to
target. Depending on your target customers vals, you can make up your marketing strategy and your
promotional message such that it hits your audience at the right spot.

Vals which is also known as values attitude and lifestyle is one of the primary ways to perform
psychographic segmentation. All three terms are intangible in nature and therefore give an idea of
the inert nature of the consumer. If you know what your consumer is thinking, you would know what
kind of promotions or communications will attract him most. And how do you know what the
consumer is thinking? By determining his vals – Values, attitudes and lifestyle.
VALS is different for different people. Lets take income as an example. If you are a person with high
income your lifestyle would probably include habits of the SEC A class such as dining out of home
frequently and that too in top class restaurants, wearing only branded clothes and buying the best
cars out there. Whereas if you are a middle class income group consumer, you would be more wary
of spending money and would rather concentrate on savings.

So now how does VALS affect a marketer? Lets say you were a banker. What would you sell
someone who had a high income lifestyle? You would sell them investment options and would also
dedicate a relationship manager to take care of their needs. In fact, the bankers also have a term for
high income individuals known as HNI – high networth individuals. But, if your lifestyle was that of a
low income customer, you are more likely to be targeted for savings

VALS is actually a proprietary term of SRI international. The term was developed by Social scientist
and futurist Arnold mitchell. Arnold mitchell actually developed the vals framework to determine
different classes of people who had varying values, attitudes and lifestyle. These people were
determined by the resources they had at their disposal as well as the amount of primary innovation
they could accept or create. Thus the people with low resources were low on innovation and the
ones with higher resources were higher in innovation. This formed the basis of the VALS framework.
9 types of Consumers as per VALS framework

Innovators – The class of consumer at the top of the vals framework. They are characterized by
High income and high resource individuals for whom independence is very important. They have
their own individual taste in things and are motivated in achieving the finer things in life.

Thinkers – A well educated professional is an excellent example of Thinkers in the vals framework.
These are the people who have high resources and are motivated by their knowledge. These are the
rational decision making consumers and are well informed about their surroundings. These
consumers are likely to accept any social change because of their knowledge level.

Believers – The subtle difference between thinkers and believers is that thinkers make their own
decisions whereas believers are more social in nature and hence also believe other consumers. They
are characterized by lower resources and are less likely to accept innovation on their own. They are
the best class of word of mouth consumers.

Achievers – The achievers are mainly motivated by – guess what – Achievements. These individuals
want to excel at their job as well in their family. Thus they are more likely to purchase a brand which
has shown its success over time. The achievers are said to be high resource consumers but at the
same time, if any brand is rising, they are more likely to adopt that brand faster.

Strivers – Low resource consumer group which wants to reach some achievement are known as
strivers. These customers do not have the resources to be an achiever. But as they have values
similar to an achiever, they fall under the striver category. If a striver can gain the necessary
resources such as a high income or social status then he can move on to becoming an achiever.

Experiencers – The group of consumers who have high resources but also need a mode of self
expression are known as Experiencers. Mostly characterized by young adults, it consists of people
who want to experience being different. This class of consumers is filled up with early adopters who
spend heavily on food, clothing and other youthful products and services.

Makers – These are consumers who also want self expression but they are limited by the number of
resources they have. Thus they would be more focused towards building a better family rather than
going out and actually spending higher amount of money. Making themselves into better individuals
and families becomes a form of self expression for the Makers.

Survivors – The class of consumers in the Vals framework with the least resources and therefore the
least likely to adopt any innovation. As they are not likely to change their course of action regularly,
they form into brand loyal customers. An example can include old age pension earners living alone
for whom the basic necessities are important and they are least likely to concentrate on anything
else.

Thus the vals framework can be used primarily to classify consumers based on their values, attitudes
and lifestyle. Once the classification has been done, you know which types of customers you want to
target. Depending on your target customers vals, you can make up your marketing strategy and your
promotional message such that it hits your audience at the right spot.
MARKETING TO GENERATION Y

Generation Y (a.k.a. Gen Y, Millennials, Echo Boomers, Why Generation, Net

Generation, Gen Wired, We Generation, DotNet, Ne(x)t Generation, Nexters, First Globals, iPod

Generation, and iYGeneration) was born during 1977-1994 and are in the 16-33 age range as of

2010. They are children of the original Baby Boomers and their numbers rival that of the Baby

Boomers. They grew up in a time of immense and fast-paced change including virtually
fullemployment opportunities for women, dual-income households as the standard, wide array of

family types seen as normal, significant respect for ethnic and cultural diversity including a

heightened social awareness, and computers in the home and schools. Gen Y individuals are

well grounded and wise for their age. They were born into a technological, electronic, and

wireless society with global boundaries becoming more transparent. They are accustomed to a

diverse universe where anything seems possible. [5, 7] The characteristics, lifestyles, and

attitudes of Gen Y include older teens and young adults. They are self-absorbed and self-reliant

with a strong sense of independence and autonomy. They want results and are not as concerned

with the why of it [2]. They are image-driven and make personal statements with their image.

[24] They have a greater need for peer acceptance, connecting with their peers, fitting in, and

social networking. [65, 66] Gen Y individuals are open-minded, optimistic, goal oriented, and

highly motivated toward their perceptions of success. Eight key values have been described for

Gen Y: choice, customization, scrutiny, integrity, collaboration, speed, entertainment, and

innovation [67]. Efficient multi-tasking helps them be successful. [29, 57, 6, 68, 69, 70, 27, 36,

2, 71, 72, 73, 25, 26]

Marketing to the Generation Y segment can be improved by the following possibilities.

The teen segment of this generation receives considerable marketing attention and is notoriously

selfish, lives for today, and spends big. Gen Y individuals assist in household management and

shopping with important preferences and tastes being developed during these teen years.

Marketers want to attract this group early and earn its loyalty. Appeal to their belief that they

can make the future better. Be sure that they know that your organization’s mission speaks to a

purpose greater than the bottom line, e.g., globalization, global warming, and the advent of the

“global citizen.” Feature your organization as an instrument of change. Give them systematic

feedback because they value positive reinforcement at accelerated rates compared to previous

generations and want more input into all things in which they participate. They are able to easily

grasp new concepts and are very learning oriented. Many are in college or have entered the work
force, and most are planning for lifelong learning experiences. However, traditional massmarketing
approaches do not work well with younger consumers. Gen Y reacts strongly to reallife examples,
they favor the truth and what is real. In essence, Gen Y cares all about the

experience [72]. The portrayal of multiple racial and ethnic individuals in ads aimed at this

generation is common, single-race ads would seem unnatural to this multi-ethnic generation. So,

as a marketer, embrace diversity, one-third of the members of this generation are from a minority

group and diversity in communications is attractive to them. Honesty, humor, uniqueness, and

information appear to be important. Encourage them to explore new paths or options, they crave

challenge. They value and are looking for brands that resonate with their peers. Their peers

often guide product and brand choice. Generation Y is tremendously image driven including

electronic decorations, piercings, and tattoos. Take full advantage of technology and its allure

for Gen Y. The key words for Gen Y are collaborate, connect, co-create, and control…mostly,

with their peers. [19, 11, 41]

In terms of products and services for Generation Y, important product areas include

apparel, accessories, footwear, room furnishings, action sports equipment, and entertainment.

Teenagers currently spend over $150 B annually for personal consumption, billions more in

household shopping, and influence many additional items like cars, vacations, and mobile

banking [74]. Gen Y is a major market for automobiles (approximately 40% of the auto market

in 10 years). Gen Y likes products customized to their unique needs and brand names are

important. Marketers need to craft products and pitches that are more realistic keeping in mind

that music and fashion are key touch points. Gen Y responds well to green living and energyefficient
features. They are an immense untapped market for nonprofit organizations and social

causes. They want products and services with a purpose greater than the bottom line. Gen Y

pays little attention to quality. They expect competitive pricing and might want to negotiate

based on your competitor’s advertised price or search results from the Internet [2]. However,

they are most likely to purchase prestige products. They experience a high degree of shopping

enjoyment. An effective marketing strategy for this generation is to routinely introduce new

products and services. Retailers need to constantly adjust and update their offerings to drive

traffic among this active shopper segment that gets bored so easily. Gen Y shops frequently and

expects novelty or prestige to be associated with their product choices. Yet, this generation is

shifting away from the materialism of the Boomers to the search for inner tranquility and deeper

meaning from life. [36, 27, 20, 41, 75]

In terms of communication, companies must continually be more creative with media and
promotional themes to capture this audience. They are unlikely to respond to marketing hype.

Ads targeting this generation, must be placed in appropriate magazines and on appropriate

Internet sites, TV and radio programs, and video games (“advergaming”). Generation Y is

accustomed to media and TV programs designed for them such as MTV, Maxim, American Idol,

Big Brother, and CSI. A combination of online, offline, and word-of-mouth channels probably

are the best choice for reaching Gen Y [76]. Word-of-mouth advertising is very important to

reach Gen Y, i.e., referrals from people they know influence them [77]. In addition, marketers

need to make their campaigns more subtle and more local delivering a message Gen Y can relate

to. It is important to identify triggers for Gen Y and then to use these triggers in the ads.

Marketers need to use appropriate music, language, and images. Use language that paints visual

pictures and action verbs that challenge. Send the messages that stress team spirit, e.g., “You’ll

be working with other bright, creative people” or “You and your team can make this initiative a

success.” Stores need to know how often the regulars come into the store so they can update

their offerings and change the displays, windows, and front tables to drive traffic, otherwise, they

will get bored and stop coming. Public relations and creating buzz are important as effective

advertising to this group. Event sponsorships and electronic media seem to connect with this

generation. Approach this generation through e-mail and voice mail, but use visual

communication to motivate them. They prefer ads with humor or irony and have an element of

truth about them, e.g., they respond to quirky humor and YouTube videos. Use humor to show

that you do not take yourself too seriously. Use family events and gatherings as ways to

communicate. Contact them through their parents and grandparents, they admire their parents

but trust their grandparents even more. Use e-mail, voice-mail, the Internet, multi-media, direct

mail catalogs, magazines, college and high school newspapers, websites, school-based media

boards, college guides, and sponsored on- and off-campus events. Subscribing to a newspaper is

unlikely. Interest in television is less than any other generation. If they do watch, they watch on

their schedule, not the networks. It is important to monitor this market for changes in the best

ways to communicate to them so that the ad will be memorable to them [77]. For example,

young people often are tagged in terms of the alcohol market. However, the literature

increasingly provides evidence that alcohol marketing is directly impacting young people’s

drinking behavior. In this case, the marketer has a moral and ethical issue to consider in creating

memorable advertising. [78, 21, 79, 41, 80, 81]

In terms of the Internet, marketers must know exactly how Gen Y individuals use media,
which media they use, and when they use it [82]. For example, they expect an Internet

experience to be interactive. This generation is impatient as they were raised in a world of

technology and instant gratification. They value fitting in and connecting with their peers.

Hence, social networking sites are important in that they allow them to connect with their peers

regarding important issues. With email almost passé, they prefer instant messaging, texting, and

interacting with friends on social networking sites like Facebook or Twitter [71]. As a point of

interest, about one-quarter of today’s teens check Facebook more than 10 times per day [83].

Owning a landline phone is unlikely, although, a company could reach them through their

college newspapers. Reach them digitally with websites and microsites/ campaign sites, web

marketing (e-cards, banner adverts, pop-ups, sponsorship, content partnering, screensavers,

desktop toys), e-mail, online chat, webcasting, interactive television (sites and adverts), short

service (SMS), WAP/wireless Internet, CD-ROMs/enhanced CDs/CD cards, computer games

(console), and digital radio. Content is king for this generation, moving content from platform to

platform with no restrictions is a must. Most of them are creators, distributors, and users of

content. [79, 28, 84]

MARKETING TO GENERATION Z

Generation Z (a.k.a. Tweens, Baby Bloomers, Generation

1] Morris, W. (1982), The American Heritage Dictionary, 549.

[2] Himmel, B. (2008), “Different Strokes for Different Generations,” Rental Product News,

30(7), 42-46.

[3] Walker, E. (2003), “The Value of Generational Marketing,” National Underwriter, 107(29),

24.

[4] Wellner, A.S. (2003), “The Next 25 Years,” American Demographics, 25, D26-D29.

[5] Hawkins, D.I., Mothersbaugh, D.L., and Best, R.J. (2010), Consumer Behavior, 11th ed.,

Irwin/McGraw-Hill.

[6] Eisner, S.P. (2005), “Managing Generation Y,” S.A.M. Advanced Management Journal,

70(4), 4-16.

[7] Dietz, J. (2003), “Defining Markets, Defining Moments: America’s 7 Generational Cohorts,

Their Shared Experiences, and Why Businesses Should Care,” The Journal of Consumer

Marketing, 20(2/3), 172-174.

Demographics alone will not help you identify your Generation Y audience, as they are not a uniform
market; psychographics and implementing the Value And Lifestyles (VALS) model is essential to
understanding Gen Y-ers on a more granular scale and crafting an effective marketing strategy.

Sell Experiences, Not Products

Millennials place more value on the experiences a brand can provide, and are less interested in the
hard sell of a product.

Generation Y buys experiences, not products #branding