Module 2- Analysing Consumer Behaviour

Topics to be covered- Meaning and Characteristics Importance of Consumer Behaviour, Factors

influencing Customer Behaviour, Consumer Characteristics influencing buying behaviour, Personal
and Cultural factors, Psychological Factors, Consumer Buying Decision Process, Buying Roles,
Buying Motives, The black box model of consumer behaviour.

INTRODUCTION

Consumer behavior is the study of how individual customers,

groups or organizations select, buy, use, and dispose ideas, goods,
and services to satisfy their needs and wants. It refers to the
actions of the consumers in the marketplace and the underlying
motives for those actions. Marketers expect that by understanding
what causes the consumers to buy particular goods and services,
they will be able to determine—which products are needed in the
marketplace, which are obsolete, and how best to present the
goods to the consumers. The study of consumer behavior assumes that the consumers are actors in the
marketplace. The perspective of role theory assumes that consumers play various roles in the marketplace.
Starting from the information provider, from the user to the payer and to the disposer, consumers play these
roles in the decision process. The roles also vary in different consumption situations; for example, a mother
plays the role of an influencer in a child‘s purchase process, whereas she plays the role of a disposer for the
products consumed by the family.

Some selected definitions of consumer behavior are as follows:

1. According to Engel, Blackwell, and Mansard, ‗consumer behavior is the actions and decision processes of
people who purchase goods and services for personal consumption‘.

2. According to Louden and Bitta, ‗consumer behavior is the decision process and physical activity, which
individuals engage in when evaluating, acquiring, using or disposing of goods and services‘.

Consumer behavior is the study of how individual customers, groups or organizations select, buy, use, and
dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the consumers in
the marketplace and the underlying motives for those actions
Prof. Harshita Kaushik/AIT/MBA/MM
Nature of Consumer Behaviour

1) Influenced by various factors:

a) Marketing factors such as product design, price, promotion, packaging, positioning and distribution.
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.

1
 2) Undergoes a constant change: Consumer behavior 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 they
prefer more sober footwear. The change in buying behavior 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 behavior 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 behavior varies across states, regions
and countries. For example, the behavior of the urban consumers is different from that of the rural
consumers. A good number of rural consumers are conservative in their buying behaviors. 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 behavior 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 behavior is important to the marketers: Marketers need to have a good
knowledge of the consumer behavior. They need to study the various factors that influence the consumer
behavior of their target customers.

MEANING OF CONSUMER BEHAVIOUR

Consumer behaviour is the study of how individual customers, groups or organizations select, buy, use, and
dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the consumers in
the marketplace and the underlying motives for those actions.

Marketers expect that by understanding what causes the consumers to buy particular goods and services, they
will be able to determine—which products are needed in the marketplace, which are obsolete, and how best to
present the goods to the consumers.

The study of consumer behaviour assumes that the consumers are actors in the marketplace. The perspective of
role theory assumes that consumers play various roles in the marketplace. Starting from the information
Prof. Harshita Kaushik/AIT/MBA/MM
provider, from the user to the payer and to the disposer, consumers play these roles in the decision process.

The roles also vary in different consumption situations; for example, a mother plays the role of an influencer in
a child‘s purchase process, whereas she plays the role of a disposer for the products consumed by the family.

IMPORTANCE OF CONSUMER BEHAVIOUR

Role or importance of study of consumer behavior can be explained with reference to the points stated as under:

1) Modern Philosophy: It concerns with modern marketing philosophy – identify consumers‘ needs and satisfy
them more effectively than competitors. It makes marketing consumer-oriented. It is the key to succeed.

2
2) Achievement of Goals: The key to a company‘s survival, profitability, and growth in a highly competitive
marketing environment is its ability to identify and satisfy unfulfilled consumer needs better and sooner than the
competitors. Thus, consumer behavior helps in achieving marketing goals.
3) Useful for Dealers and Salesmen: The study of consumer behavior is not useful for the company alone.
Knowledge of consumer behavior is equally useful for middlemen and salesmen to perform their tasks
effectively in meeting consumers‘ needs and wants successfully. Consumer behavior, thus, improves
performance of the entire distribution system.
4) More Relevant Marketing Programme: Marketing programme, consisting of product, price, promotion, and
distribution decisions, can be prepared more objectively. The programme can be more relevant if it is based on
the study of consumer behavior. Meaningful marketing programme is instrumental in realizing marketing goals.
5) Adjusting Marketing Programme over Time: Consumer behavior studies the consumer response pattern on a
continuous basis. So, a marketer can easily come to know the changes taking place in the market. Based on the
current market trend, the marketer can make necessary changes in marketing programme to adjust with the
market.
6) Predicting Market Trend: Consumer behavior can also aid in projecting the future market trends. Marketer
finds enough time to prepare for exploiting the emerging opportunities, and/or facing challenges and threats.
7) Consumer Differentiation: Market exhibits considerable differentiations. Each segment needs and wants
different products. For every segment, a separate marketing programme is needed. Knowledge of consumer
differentiation is a key to fit marking offers with different groups of buyers. Consumer behavior study
supplies the details about consumer differentiations.
8) Creation and Retention of Consumers: Marketers who base their offerings on a recognition of consumer
needs find a ready market for their products. Company finds it easy to sell its products. In the same way, the
company, due to continuous study of consumer behavior and attempts to meet changing expectations of the
buyers, can retain its consumers for a long period.
9) Competition: Consumer behavior study assists in facing competition, too. Based on consumers‘
expectations, more competitive advantages can be offered. It is useful in improving competitive strengths of
the company.
10) Developing New Products: New product is developed in respect of needs and wants of the target market. In Prof. Harshita Kaushik/AIT/MBA/MM
order to develop the best-fit product, a marketer must know adequately about the market. Thus, the study of
consumer behavior is the base for developing a new product successfully.
11) Dynamic Nature of Market: Consumer behavior focuses on dynamic nature of the market. It helps the
manager to be dynamic, alert, and active in satisfying consumers better and sooner than competitors.
Consumer behavior is indispensable to watch movements of the markets.

12) Effective Use of Productive Resources: The study of consumer behavior assists the manager to make the
organisational efforts consumer-oriented. It ensures an exact use of resources for achieving maximum
efficiency. Each unit of resources can contribute maximum to objectives. It is to be mentioned that the study

3
 of consumer behavior is not only important for the current sales, but also helps in capturing the future market.
Consumer behavior assumes: Take care of consumer needs, the consumers, in return, will take care of your
needs. Most of problems can be reasonably solved by the study of consumer behaviour. Modern marketing
practice is almost impossible without the study of consumer behaviour.

UNDERSTANDING CONSUMER BEHAVIOUR THROUGH RESEARCH PROCESS

What is the consumer research process?

Consumer research plays a very important aspect, especially when a company decides to launch a new product into
the market. After conducting various surveys and focus groups, companies analyze the consumer data and then make
recommendations based on the results.

Customer research process: A well-organised customer research process produces valid, accurate, reliable,
timely and complete results. Carefully gathered research results that reflect your customers' opinions and needs
will help you grow your sales and improve your operations. To get the results you need, set and follow
recognised customer research processes.

Set your objectives: Consider your customer research goals and define a clear set of objectives that identify
what you need to know and what you're going to do with the information. Make sure your objectives don't
presume your outcome, and be SMART about setting them.

 Specific - state clearly what you want to achieve

 Measurable - set tangible measures so you know when you've achieved your goals
 Achievable - set goals that are within your capacity and budget
 Relevant - set goals that will help you improve particular aspects of your business
 Time-bound - set goals you can achieve within the time you need them.

Plan your research: Good planning allows you to use creative and logical approaches to gathering information.
Your plan will be influenced by the type and complexity of information you require, your team's customer
Prof. Harshita Kaushik/AIT/MBA/MM
research skills, how soon you need the information and your budget.

Identify your list of questions and decide on the research methods that will best achieve your objectives. Detail
your research approach and give some initial thought to how you'll collate and analyse your data.

Collect and collate your findings: List your research steps, data needs and collection methods. This will help
you keep track of your research processes and make sense of your findings. It will also allow you to check that
your research accurately reflects your customers' and market's opinions. Create a table to record:

 consumer research activity

 the data needed

4
  your data collection method
 Your data analysis steps.

Remember, research is only valuable and usable when it is valid, accurate and reliable. Relying on flawed research is
dangerous. It can leave you at risk of basing your important decisions on incorrect findings and lead to customer
losses and decreased sales. Be careful not to turn one opinion into your research findings.

It's important to make sure your data is:

 valid - well founded, logical, rigorous, sound and unbiased

 accurate - free from error and includes the required detail
 reliable - can be reproduced by other people researching in the same way
 timely - current and gathered within an appropriate time frame
 complete - includes all the data you need to support your business decisions.

Analyse and understand your research: Data analysis can range from simple, straightforward steps to
technical and complex processes. Take a common sense approach, and choose your data analysis method based
on the research you've undertaken.

List and group your information: Choose a spreadsheet that allows you to easily enter your data. If you don't
have a large amount of data, you should be able to manage it using basic spreadsheet tools available in standard
office software. If you have collected more comprehensive and complex data, you may need to consider using
specific programs to manage it, such as a database system or customer relationship management (CRM)
program. Choose a simple structure to record your data - for example, a table that allows you to list survey
questions vertically in your table and record your responses as numbers categorised by age, gender, income, or
other factors that are important to you.

Review and interpret your information to draw conclusions: Once you've gathered all your data, you can
scan your information and interpret it to draw conclusions and make decisions. Review your data and then:

 identify major trends and themes, problems, opportunities and issues that you observe, and write a Prof. Harshita Kaushik/AIT/MBA/MM
sentence about each
 record how frequently each major finding appears
 list your findings in order of most common to least common
 assess and separately list the strengths, weaknesses, opportunities and threats you have identified in a
SWOT analysis.

Develop conclusions and recommendations about your research: Before you make any conclusions about
your research, revisit your research objectives. Consider whether the process you've completed and data you've

5
gathered helps answer your questions. Ask yourself what your research revealed and identify your conclusions and
recommendations. Review your findings and, based on what you now know:

 choose a few strategies that will help you improve your business
 act on your strategies
 look for gaps in your information, and consider further research if necessary
 plan to review your research outcomes, and consider how effective your strategies have been.

FACTORS INFLUENCING CONSUMER BEHAVIOUR

Here are 5 major factors that influence consumer behavior:

Psychological Factors

Social Factors

Cultural Factors

Personal Factors

Economic Factors

1. Psychological Factors

Human psychology is a major determinant of consumer behavior. These factors are difficult to measure but are
powerful enough to influence a buying decision.
Prof. Harshita Kaushik/AIT/MBA/MM
Some of the important psychological factors are:

i. Motivation

When a person is motivated enough, it influences the buying

behavior of the person. A person has many needs such as social
needs, basic needs, security needs, esteem needs, and self-
actualization needs. Out of all these needs, the basic needs and
security needs take a position above all other needs. Hence basic
needs and security needs have the power to motivate a consumer to
buy products and services.

6
ii. Perception

Consumer perception is a major factor that influences consumer behavior. Customer perception is a process where a
customer collects information about a product and interprets the information to make a meaningful image of a
particular product.

When a customer sees advertisements, promotions, customer reviews, social media feedback, etc. relating to a
product, they develop an impression about the product. Hence consumer perception becomes a great influence on the
buying decision of consumers.

iii. Learning

When a person buys a product, he/she gets to learn something more about the product. Learning comes over a period
of time through experience. A consumer‘s learning depends on skills and knowledge. While skill can be gained
through practice, knowledge can be acquired only through experience.

Learning can be either conditional or cognitive. In conditional learning the consumer is exposed to a situation
repeatedly, thereby making a consumer to develop a response towards it.

Whereas in cognitive learning, the consumer will apply his knowledge and skills to find satisfaction and a
solution from the product that he buys.

iv. Attitudes and Beliefs

Consumers have certain attitudes and beliefs which influence the buying decisions of a consumer. Based on this
attitude, the consumer behaves in a particular way towards a product. This attitude plays a significant role in
defining the brand image of a product. Hence, marketers try hard to understand the attitude of a consumer to
design their marketing campaigns.

2. Social Factors

Humans are social beings and they live around many people who influence their buying behavior. Humans try to
imitate other humans and also wish to be socially accepted in the society. Hence their buying behavior is
influenced by other people around them. These factors are considered as social factors. Some of the social
factors are:

i. Family

Family plays a significant role in shaping the buying behavior of a person. A person develops preferences from
his childhood by watching family buy products and continues to buy the same products even when they grow
Prof. Harshita Kaushik/AIT/MBA/MM
up.

ii. Reference Groups

A reference group is a group of people with whom a person associates himself. Generally, all the people in the
reference group have common buying behavior and influence each other.

iii. Roles and status

A person is influenced by the role that he holds in the society. If a person is in a high position, his buying
behavior will be influenced largely by his status. A person who is a Chief Executive Officer in a company will
buy according to his status while a staff or an employee of the same company will have different buying
pattern.

7
3. Cultural factors

A group of people is associated with a set of values and ideologies that belong to a particular community. When a
person comes from a particular community, his/her behavior is highly influenced by the culture relating to that
particular community. Some of the cultural factors are:

i. Culture

Cultural Factors have a strong influence on consumer buying behavior. Cultural Factors include the basic values,
needs, wants, preferences, perceptions, and behaviors that are observed and learned by a consumer from their near
family members and other important people around them.

ii. Subculture

Within a cultural group, there exists many subcultures. These subcultural groups share the same set of beliefs and
values. Subcultures can consist of people from different religion, caste, geographies and nationalities. These
subcultures by itself form a customer segment.

iii. Social Class

Each and every society across the globe has the form of social class. The social class is not just determined by
the income, but also other factors such as the occupation, family background, education and residence location.
Social class is important to predict the consumer behavior.

4. Personal Factors

Factors that are personal to the consumers influence their buying behavior. These personal factors differ from
person to person, thereby producing different perceptions and consumer behavior.

Some of the personal factors are:

i. Age

Age is a major factor that influences buying behavior. The buying choices of youth differ from that of middle-
aged people. Elderly people have a totally different buying behavior. Teenagers will be more interested in
buying colorful clothes and beauty products. Middle-aged are focused on house, property and vehicle for the
family.

ii. Income Prof. Harshita Kaushik/AIT/MBA/MM

Income has the ability to influence the buying behavior of a person. Higher income gives higher purchasing
power to consumers. When a consumer has higher disposable income, it gives more opportunity for the
consumer to spend on luxurious products. Whereas low-income or middle-income group consumers spend most
of their income on basic needs such as groceries and clothes.

iii. Occupation

Occupation of a consumer influences the buying behavior. A person tends to buy things that are appropriate to
this/her profession. For example, a doctor would buy clothes according to this profession while a professor will
have different buying pattern.

8
iv. Lifestyle

Lifestyle is an attitude, and a way in which an individual stay in the society. The buying behavior is highly
influenced by the lifestyle of a consumer. For example when a consumer leads a healthy lifestyle, then the products
he buys will relate to healthy alternatives to junk food.

5. Economic Factors

The consumer buying habits and decisions greatly depend on the economic situation of a country or a market. When
a nation is prosperous, the economy is strong, which leads to the greater money supply in the market and higher
purchasing power for consumers. When consumers experience a positive economic environment, they are more
confident to spend on buying products.

Whereas, a weak economy reflects a struggling market that is impacted by unemployment and lower purchasing
power.

Economic factors bear a significant influence on the buying decision of a consumer. Some of the important
economic factors are:

i. Personal Income

When a person has a higher disposable income, the purchasing power increases simultaneously. Disposable
income refers to the money that is left after spending towards the basic needs of a person.

When there is an increase in disposable income, it leads to higher expenditure on various items. But when the
disposable income reduces, parallelly the spending on multiple items also reduced.

ii. Family Income

Family income is the total income from all the members of a family. When more people are earning in the
family, there is more income available for shopping basic needs and luxuries. Higher family income influences
the people in the family to buy more. When there is a surplus income available for the family, the tendency is to
buy more luxury items which otherwise a person might not have been able to buy.

iii. Consumer Credit

When a consumer is offered easy credit to purchase goods, it promotes higher spending. Sellers are making it
easy for the consumers to avail credit in the form of credit cards, easy installments, bank loans, hire purchase,
and many such other credit options. When there is higher credit available to consumers, the purchase of comfort Prof. Harshita Kaushik/AIT/MBA/MM
and luxury items increases.

iv. Liquid Assets

Consumers who have liquid assets tend to spend more on comfort and luxuries. Liquid assets are those assets,
which can be converted into cash very easily. Cash in hand, bank savings and securities are some examples of
liquid assets. When a consumer has higher liquid assets, it gives him more confidence to buy luxury goods.

v. Savings

A consumer is highly influenced by the amount of savings he/she wishes to set aside from his income. If a
consumer decided to save more, then his expenditure on buying reduces. Whereas if a consumer is interested in
saving more, then most of his income will go towards buying products.

9
CONSUMER BUYING DECISION PROCESS

STAGES OF PURCHASING PROCESS

A consumer undergoes the following stages before making a purchase decision −

STAGE 1 − NEEDS / REQUIREMENTS

It is the first stage of the buying process where the consumer recognizes a problem or a requirement that needs
to be fulfilled. The requirements can be generated either by internal stimuli or external stimuli. In this stage, the
marketer should study and understand the consumers to find out what kinds of needs arise, what brought them
about, and how they led the consumer towards a particular product.

STAGE 2 − INFORMATION SEARCH Prof. Harshita Kaushik/AIT/MBA/MM

In this stage, the consumer seeks more information. The consumer may have keen attention or may go into
active information search. The consumer can obtain information from any of the several sources. This include
personal sources (family, friends, neighbors, and acquaintances), industrial sources (advertising, sales people,
dealers, packaging), public sources (mass media, consumer-rating and organization), and experiential sources
(handling, examining, using the product). The relative influence of these information sources varies with the
product and the buyer.

STAGE 3 − EVALUATION OF ALTERNATIVES

In this stage, the consumer uses information to evaluate alternative brands from different alternatives. How
consumers go about evaluating purchase alternatives depends on the individual consumer and the specific
buying situation. In some cases, consumers use logical thinking, whereas in other cases, consumers do little or
10
no evaluating; instead they buy on aspiration and rely on intuition. Sometimes consumers make buying decisions on
their own; sometimes they depend on friends, relatives, consumer guides, or sales persons.

STAGE 4 − PURCHASE DECISION

In this stage, the consumer actually buys the product. Generally, a consumer will buy the most favorite brand, but
there can be two factors, i.e., purchase intentions and purchase decision. The first factor is the attitude of others and
the second is unforeseen situational factors. The consumer may form a purchase intention based on factors such as
usual income, usual price, and usual product benefits.

STAGE 5 − POST-PURCHASE BEHAVIOR

In this stage, the consumers take further steps after purchase based on their satisfaction and dissatisfaction. The
satisfaction and dissatisfaction depend on the relationship between consumer‘s expectations and the product‘s
performance. If a product is short of expectations, the consumer is disappointed. On the other hand, if it meets their
expectations, the consumer is satisfied. And if it exceeds their expectations, the consumer is delighted.

The larger the gap between the consumers‘ expectations and the product‘s performance, the greater will be the
consumer‘s dissatisfaction. This suggests that the seller should make product claims that faithfully represent the
product‘s performance so that the buyers are satisfied.

Consumer satisfaction is important because the company‘s sales come from two basic groups, i.e., new
customers and retained customers. It usually costs more to attract new customers than to retain existing
customers and the best way to retain them is to get them satisfied with the product.

BUYING ROLES

8 buying roles in the sales process

There are many buying roles in the sales process a customer can embody. Here are eight important roles often a
part of the sales process:

1. The decider

This buyer is someone who makes the final decision to purchase a product or service. This is someone you can
give your sales pitch to directly, which can encourage positive results. In smaller businesses, they might be the
owner so it can be easier to speak to them directly. In larger companies, there are several decision-makers to
whom you can appeal. This can provide you with multiple opportunities to present the company's products or
services.
Prof. Harshita Kaushik/AIT/MBA/MM
2. The buyer

A buyer or budget holder is the financial controller that can help provide a certain level of approval for company
purchases. In a small business, the finance director and the owner can be the same individual, which enables you
to expedite the selling process. Larger corporations may have individual budgets for each department and might
require additional financial approval from company leadership before financing a purchase. Knowing the
procedures for financial approval can assist you in helping a consumer navigate the buying process.

3. The approver

In addition to the buyer, some companies might have an approval authority that reviews the legal and
compliance implications of a purchase. This approval authority can have a large effect on the buying process,

11
which can result in sales having longer timelines than usual. Legalities can have a large part in the sales process so it
is wise to understand what a company's procedures are early in the sales process.

A small business may simply need a contract renewal and approval from the organisation's chief financial officer
(CFO). A larger corporation may require a master service agreement and scope of work documentation that also
requires approval from department leads. Upon approval, the agreement might require a presentation and CFO
approval. Understanding the processes for prospective clients can provide you with a better indication of how long
you can expect it to take to finalise the sale.

4. The promoter

In sales roles, a promoter is someone who likes the company's products or services and wants to integrate them into
their organisation. They might openly promote and defend the company's products to colleagues and decision-
makers. Also known as champions, they might have a strong connection and sense of loyalty to the organisation and
can assist in pursuing final approval for the buyer's purchase. If your contact is a promoter, providing them with
detailed product or service information can help you convince the decision-maker of the organisation to purchase a
specific product or service.

5. The executive sponsor

Board members and consultants who are part of the executive team can affect your sales strategy. These
professionals might have a large influence on the decision-makers of an organisation. Similar to promoters, an
executive sponsor's role in the sales process can be as a supporter of your product or service. They can advocate
on your behalf to fellow board members and the decision maker.

6. The influencer

An Influencer is someone in the organisation who can persuade the buying committee to take a particular action.
Similar to a promoter's and executive sponsor's role, they can advocate on your behalf with an organisation.
These professionals might have less influence on decision-makers than a promoter or executive sponsor might
have, but can still have a positive effect on approval or deciding authorities.

7. The final user

The final or end user is a person who uses your product or services. Depending on their place within an
organisation, a company might include their input or opinions as a part of the buying process. Having a positive
reputation among a majority of end-users can help decision-makers understand the effect a product or service
has on their organisation, which can convince them to purchase additional products or services.

8. The gatekeeper Prof. Harshita Kaushik/AIT/MBA/MM

This person can be anyone that can delay or affect the sales process from progressing. The gatekeepers' roles
can vary within a corporation, according to what to product or service you're attempting to market and sell. For
example, you might try to market a visualisation dashboard to a company's IT manager. This manager might
have a preference for a different visualisation dashboard, which can affect their opinion of the dashboard you're
trying to sell.

Dealing with gatekeepers can be challenging, so understanding the unique benefits of the product or service
you're selling in comparison to market competitors can increase your chances of a successful sale. Having a
strong relationship with your contact and understanding their hesitations can help you inform them of how the
product or service can overcome those challenges. This can help you progress the buyer through the buying
process efficiently and increase the likelihood of a successful sale.

12
BUYING MOTIVES

What is Buying Motives?

Buying motives are the motive to persuade the desires of people so that they buy a particular good or service. Buying
motives relate to the feelings and emotions of people which generates a desire to purchase. Any person does not buy
a product or service just because of excellent salesman pitch but he does also due to the desire generated within him
towards the product or service.

1. Need

Need might be the most immediate buyer motive. If a prospect has a problem you can solve, they're inherently
motivated to consider your offering. Capitalizing on your buyer‘s needs generally hinges upon how aware they are of
the full spectrum of potential issues that can stem from their situation.

If you approach interactions with prospects assuming they already have a comprehensive understanding of
everything they need when they talk to you, you're selling yourself short.

Steve Jobs once said, "A lot of times, people don't know what they want until you show it to them." The same
principle applies to need. Prospects don't always have a need until you inspire one.

Some buyers have a clear-cut picture of their problems, your product or service, and its potential solutions. But
others might need a little guidance.

You have to raise their awareness of an issue, explain how it applies to their situation, and walk them through
the ways that you — specifically — can solve it better than anyone else.

2. Acceptance

As a buyer motive, acceptance is essentially the by-product of consumer FOMO or "fear of missing out." It's
when prospects are interested in buying a product or service because everyone else around them seems to be
buying it as well.

And according to research by Washington State University, this motivation affects people of all ages.

That's why acceptance is the buyer motive behind most fads. Certain products or services catch steam, generate
quick interest, and develop followings that rapidly expand.

Prospects don't want to miss out on the movement, so they make a point of buying in and showing off.

3. Fear Prof. Harshita Kaushik/AIT/MBA/MM

Fear is a powerful catalyst for action in almost any situation, and sales is no exception. That's why so many
companies lean on scare tactics — subtle or overt — to create urgency behind their messaging and sales efforts.

For instance, Volkswagen ran an ad in 2006 featuring a realistic depiction of a car crash, backed by the tagline
"Safe Happens." It was a campaign that played on natural consumer anxiety to accentuate the value of its cars'
safety systems.

Playing on this buyer motive might seem cheap or unethical, but it can still be very effective. And the process of
doing so is similar to that of the first point on this list. In the same way, you can highlight specific needs your
prospect might not be considering or raise fears they might be ignoring as well.

13
4. Health

Many consumers are interested in taking steps to protect their well-being. Accenture‘s 2021 Life Reimagined
report reveals more than 45% of respondents are ready to pay more for health and safety-related experiences. So if
you can create the impression that your product or service will make them live better or longer, they'll be inclined to
learn more — at the very least.

The key to selling based on health is offering some legitimate demonstration — showing and proving. You need to
have some sort of concrete, compelling evidence to establish your product or service's clear-cut benefits to
consumers' wellbeing. If you show that your offering addresses a relevant, urgent health concern, you'll be in an
excellent position to sell effectively.

5. Impulse

People don't always give a ton of thought to the purchases they make. Everyone is guilty of falling under the spell of
this motive at some point. Many consumers will get caught up in the heat of the moment and buy for the sake of
buying.

Impulse buying is rooted in excitement, and capitalizing on the motive is a matter of creating it. Generating
flash-in-the-pan urgency can help facilitate purchases on that basis.

A particularly compelling deal might get you there — promotional pricing tactics like flash sales can often be
powerful starting points for potential impulse buys.

Acceptance and impulse can often go hand in hand as well. For example, if buyers see their peers collectively
embracing a product or service, they might be inclined to get on board without considering whether they
actually need what they're buying.

6. Pleasure

By and large, consumers don't strictly buy the bare necessities. Sometimes, they make superfluous purchases
that are less than essential. People like to enjoy themselves, so they buy products and services that suit wants —
not needs — from time to time.

Generally speaking, you should only try to sell by this motive when selling a product or service that can easily
be cast as a luxury. Of course, it's up to you to discern if that's the case with your product or service, but it's
generally fairly obvious.

If someone is shopping for home decor or a new pair of designer sandals, their priority is probably pleasure. The
same can't be said for someone looking for insect repellant to deal with their house's ant problem. Prof. Harshita Kaushik/AIT/MBA/MM
7. Financial Gain

Several prospects — particularly in B2B sales — are spending money to make money. Their primary motive is
to leverage your product or service to improve their business operations. For example, they might want to boost
employee productivity, generate more revenue, or want to shed unnecessary expenses.

If you're selling to a prospect with this motive, you must demonstrate authority and show actual results. Show
— don't tell.

Prospects motivated by financial gain typically have more at stake than those buying products to avoid missing
out on a hot new trend. That's why you have to convince them they'll be in good hands if they invest in your

14
product or service. Put them at ease with legitimate results and show them what they can expect if they do business
with you.

8. Aspiration

Some consumers buy based on aspirations for self-improvement. They want to change for the better and are
leveraging that dollar to help support those efforts.

Purchases like gym memberships and subscriptions to online courses generally aren't made out of fear or the pursuit
of pleasure — they result from sincere ambition.

If you're selling to a buyer motivated by aspiration, the key is to stress what they could be if they stay the course after
their purchase. If you're selling online coursework or paid online certifications, let your prospects know how your
product can help bolster their resumes and what that can do for their career development.

Self-improvement requires determination. If you want to capitalize on this motive, show them something to be
determined about.

BLACK BOX MODEL OF CONSUMER BEHAVIOUR

Prof. Harshita Kaushik/AIT/MBA/MM

What is a Black Box model in Consumer Behavior?

In case of consumer behavior, black box is the human mind. Stimulus will be the input whereas the consumer
response will be the output. All a company can do is to guess how human mind worked to give that particular
response. Companies can try providing appropriate stimulus to the customers and try to expect the desired
response from the human mind. If the desired response is not achieved, it signifies that the stimulus was not

15
appropriate. The black box model shows the interaction of stimuli, consumer characteristics, decision process and
consumer responses.

The black box model considers the buyer‘s response as a result of a conscious, rational decision process, in which it
is assumed that the buyer has recognized the problem. However, in reality many decisions are not made in awareness
of a determined problem by the consumer. The buyer‘s black box comprises two sub components – the buyer’s
characteristics and the buyer decision process.

As illustrated in the figure above, the external stimuli that consumers respond to include the marketing mix and other
environmental factors in the market. The marketing mix (the four Ps) represents a set of stimuli that are planned and
created by the company. The environmental stimuli are supplied by the economic, political, and cultural
circumstances of a society. Together these factors represent external circumstances that help shape consumer
choices.

The internal factors affecting consumer decisions are described as the ―black box.‖ This ―box‖ contains a variety of
factors that exist inside the person‘s mind. These include characteristics of the consumer, such as their beliefs,
values, motivation, lifestyle, and so forth. The decision-making process is also part of the black box, as consumers
come to recognize they have a problem they need to solve and consider how a purchasing decision may solve
the problem. As a consumer responds to external stimuli, their ―black box‖ process choices based on internal
factors and determine the consumer‘s response–whether to purchase or not to purchase.

Like the economic man model, this model also assumes that regardless of what happens inside the black box
(the consumer‘s mind), the consumer‘ response is a result of a conscious, rational decision process. Many
marketers are skeptical of this assumption and think that consumers are often tempted to make irrational or
emotional buying decisions. In fact, marketers understand that consumers‘ irrationality and emotion are often
what make them susceptible to marketing stimuli in the first place.

For this reason, consumer purchasing behavior is considered by many to be a mystery or ―black box.‖ When
people themselves don‘t fully understand what drives their choices, the exchange process can be unpredictable
and difficult for marketers to understand.

Applications of Black Box Model:

1) Design websites:

The goal of a website is to make the customer look into the details company is trying to communicate. Good
designers make pretty websites, great designers make convincing websites. Black box model asks as a tool to
understand the consumers based on which the website can be designed. Start off with the marketing stimuli
which are the basics of price, product, etc. As a designer, you probably don‘t have control over these but you Prof. Harshita Kaushik/AIT/MBA/MM
can bet that the specifics of this need to be among the first things you discuss with a client

2) Marketing Offers:

Understanding the customers and their needs is an important tool in deciding the offers or promotions.
Marketing mix of 4Ps – Place, price, promotion and product can be adjusted based on consumer behavior
identified from the black box model.

16