UNIT 1

Meaning and Nature of Consumer Behavior

Consumer behavior refers to the actions and decision-making processes of individuals and
households in purchasing and using goods and services. It encompasses the psychological, social,
and emotional factors influencing consumers before, during, and after a purchase.

Nature of Consumer Behavior:

1. Complex Process: Consumer behavior is complex and influenced by various factors like
personal preferences, cultural background, social status, and psychological factors. For
instance, a person's choice of car can be influenced by their income level, family needs,
brand perception, and social influences.

2. Dynamic: It changes over time due to changes in consumer preferences, technological

advancements, and market trends. For example, the increasing awareness of health has led
more people to buy organic products.

3. Goal-Oriented: Consumers make purchases to satisfy needs and wants. For instance,
buying a smartphone to stay connected, for entertainment, and for work purposes.

4. Influenced by External Factors: Cultural, social, and environmental factors significantly

impact consumer behavior. For instance, festive seasons like Diwali in India see a surge in
the purchase of sweets, clothes, and electronics.

5. Varied Across Individuals: Each consumer has unique preferences and behaviors. For
example, some people prefer luxury brands, while others opt for more affordable options.

6. Influenced by Marketing Strategies: Advertising, promotions, and product placements

can shape consumer preferences and behavior. For instance, a well-executed ad campaign
can significantly boost the sales of a new product.

7. Reflects Social and Economic Trends: Changes in the economy or social trends can alter
consumer behavior. For example, during economic downturns, consumers might cut back
on non-essential purchases.
 8. Complex Decision-Making Process: Involves several stages such as problem recognition,
information search, evaluation of alternatives, purchase decision, and post-purchase
behavior. For instance, buying a car involves researching different models, comparing
features and prices, test driving, and finally making the purchase.

Difference Between Consumer Buying and Organizational Buying

1. Nature of Buyer:

o Consumer Buying: Individuals or households purchase goods for personal use.

o Organizational Buying: Organizations purchase goods and services for business

use, production, or resale.

2. Purchase Volume:

o Consumer Buying: Typically involves small quantities.

o Organizational Buying: Usually involves large quantities.

3. Decision-Making Process:

o Consumer Buying: Generally a shorter and less formal process.

o Organizational Buying: Often involves a longer, more formal, and structured

process with multiple decision-makers.

4. Buying Motives:

o Consumer Buying: Driven by personal needs, preferences, and desires.

o Organizational Buying: Driven by business needs, cost considerations, and return

on investment.

5. Nature of Demand:

o Consumer Buying: Demand is influenced by personal tastes and marketing efforts.

o Organizational Buying: Demand is derived from consumer demand for finished

goods.

Consumer Behavior Knowledge in Business Decisions

 1. Product Development: Understanding consumer preferences and behaviors helps
businesses develop products that meet consumer needs. For instance, a tech company might
develop a smartphone with a high-resolution camera if research shows consumers prioritize
camera quality.

2. Pricing Strategies: Knowledge of consumer behavior helps in setting prices that

consumers are willing to pay. For example, luxury brands might price their products higher
to reflect exclusivity and quality.

3. Market Segmentation: Identifying different consumer segments based on behavior allows

for targeted marketing strategies. For instance, a company might market differently to
millennials versus baby boomers.

4. Customer Relationship Management: Understanding consumer behavior helps

businesses build and maintain strong relationships with their customers. For instance,
offering personalized recommendations based on past purchases can enhance customer
loyalty.

5. Promotional Strategies: Insights into consumer behavior guide the development of

effective advertising and promotional campaigns. For instance, a company might use social
media influencers to reach younger audiences.

Consumer Behavior Knowledge in Marketing Management

1. Target Marketing: Helps in identifying and targeting the right audience. For instance, a
company selling fitness products will target health-conscious individuals.

2. Product Positioning: Understanding consumer perceptions allows businesses to position

their products effectively in the market. For example, Volvo positions itself as a brand
focused on safety.

3. Advertising and Promotion: Guides the creation of effective advertising messages and
promotional strategies. For instance, Coca-Cola uses emotional appeals in its advertising
to connect with consumers.
 4. Brand Management: Helps in building and maintaining a strong brand image. For
example, Apple leverages consumer behavior insights to maintain its brand as innovative
and premium.

5. Sales Strategies: Influences the development of sales tactics and strategies. For instance,
knowing that consumers often seek validation from others, a company might use
testimonials in their sales pitch.

Consumer Behavior Knowledge in Public Policy Decisions

1. Consumer Protection Laws: Insights into consumer behavior guide the development of
laws to protect consumers from unfair practices. For instance, regulations on false
advertising ensure consumers are not misled.

2. Health and Safety Regulations: Understanding how consumers use products helps in
creating regulations to ensure safety. For example, stringent safety standards for children's
toys are based on insights into how children interact with toys.

3. Environmental Policies: Consumer behavior insights help in developing policies that

encourage environmentally friendly practices. For instance, promoting recycling programs
based on understanding consumer attitudes towards waste.

4. Economic Policies: Helps in formulating policies that influence consumer spending and
saving behaviors. For example, tax incentives for certain purchases can stimulate consumer
spending in specific sectors.

5. Public Awareness Campaigns: Guides the development of campaigns to educate the

public on various issues. For instance, anti-smoking campaigns are designed based on
insights into what motivates people to quit smoking.

The Consumer Movement

Characteristics and Objectives:

1. Advocacy for Consumer Rights: Seeks to protect and promote consumer rights. For
instance, advocating for the right to safety, information, and choice.
 2. Consumer Education: Aims to educate consumers about their rights and responsibilities.
For example, providing information on how to identify fraudulent schemes.

3. Improving Product Quality: Works towards ensuring that products and services meet
high-quality standards. For instance, pushing for better safety standards in automobiles.

4. Fair Pricing: Advocates for fair pricing and against exploitative pricing practices. For
example, lobbying against price gouging during emergencies.

5. Corporate Accountability: Seeks to hold companies accountable for their actions. For
instance, campaigning against companies that engage in unethical practices.

6. Environmental Protection: Promotes sustainable and environmentally friendly practices.

For example, advocating for reduced use of plastic and increased recycling efforts.

Objectives:

1. Empower Consumers: To empower consumers to make informed decisions.

2. Protect Interests: To protect the interests and rights of consumers.

3. Ensure Fair Trade: To ensure fair trade practices and prevent exploitation.

4. Promote Awareness: To promote awareness about consumer rights and responsibilities.

5. Enhance Quality of Life: To enhance the quality of life through better products and
services.

6. Encourage Ethical Practices: To encourage ethical business practices and corporate

responsibility.
UNIT 2

Types of Consumer Decision

1. Habitual Decision-Making:

o Definition: Consumers make routine purchases with little thought or effort. These
are usually low-cost, frequently purchased items.

o Example: Buying the same brand of toothpaste or milk every week.

2. Limited Decision-Making:

o Definition: Consumers engage in a moderate amount of effort and time for

decision-making. They compare a few alternatives before making a purchase.

o Example: Purchasing a pair of jeans, where the consumer may compare a few
brands and styles before making a decision.

3. Extended Decision-Making:

o Definition: Consumers engage in extensive research and evaluation before making

a decision, usually for high-involvement products.

o Example: Buying a car, where the consumer spends considerable time researching
different models, reading reviews, and visiting dealerships.

Purchase Involvement Levels and the Decision Process

1. Low Involvement:

o Definition: Purchases that involve little to no research or thought. Usually for

inexpensive and frequently bought products.

o Decision Process: Problem recognition → Purchase decision → Post-purchase

behavior.

o Example: Buying a pack of gum or a bottle of water.

 2. Limited Involvement:

o Definition: Purchases that involve some research and comparison but not
extensive. These are moderately priced items bought occasionally.

o Decision Process: Problem recognition → Information search → Evaluation of

alternatives → Purchase decision → Post-purchase behavior.

o Example: Choosing a restaurant for a casual dinner out.

3. High Involvement:

o Definition: Purchases that involve significant research and thought. Usually for
expensive and infrequent purchases.

o Decision Process: Problem recognition → Information search → Evaluation of

alternatives → Purchase decision → Post-purchase behavior.

o Example: Buying a house or planning a vacation abroad.

Problem/Need Recognition by Consumers and Its Process

Definition: Problem or need recognition occurs when a consumer perceives a difference between
their current state and a desired state, triggering the decision-making process.

Process:

1. Current State: The consumer’s present situation.

o Example: A person feels hungry.

2. Desired State: The ideal situation the consumer wants to achieve.

o Example: A person wants to eat a healthy and filling meal.

3. Trigger: An internal or external stimulus that prompts the consumer to recognize a

problem.

o Example: Seeing an advertisement for a new restaurant.

Types of Consumer Problems

1. Active Problems:

o Definition: Problems that consumers are aware of and need to solve.

o Example: A consumer knows they need to replace a broken smartphone.

2. Inactive Problems:

o Definition: Problems that consumers are unaware of but exist.

o Example: A consumer may not realize that they need a water filter to improve their
tap water quality until they see a commercial highlighting the benefits of filtered
water.

3. Other Types:

o Latent Problems: Problems that the consumer is aware of but not actively seeking
a solution.

▪ Example: A consumer who is aware of the benefits of a fitness routine but

has not yet committed to starting one.

o Recurring Problems: Problems that occur repeatedly and require frequent

solutions.

▪ Example: Regularly running out of groceries.

Marketing Strategy and Problem Recognition

Definition: Marketing strategies can be designed to help consumers recognize problems or needs
that their products or services can solve.

Examples:

1. Advertising: Creating advertisements that highlight common problems and presenting the
product as a solution.

o Example: A commercial showing the convenience of a new vacuum cleaner for

busy households.
 2. Promotions: Offering promotions that draw attention to potential needs.

o Example: A limited-time offer on fitness equipment during the New Year to tap
into consumers' resolutions to get fit.

3. Product Packaging: Using packaging to communicate product benefits and solutions to

common problems.

o Example: Shampoo bottles highlighting ingredients that combat dandruff.

Problem Identification and Response

Definition: Identifying consumer problems involves understanding their needs and pain points,
and responding by developing appropriate solutions.

Process:

1. Identify Problems: Conduct market research to understand the common issues consumers
face.

o Example: A tech company surveys users to find out that many are frustrated with
short battery life in smartphones.

2. Develop Solutions: Create products or services that address identified problems.

o Example: The tech company develops a smartphone with a longer-lasting battery.

3. Communicate Solutions: Use marketing communications to inform consumers about the

new solutions.

o Example: Launching a marketing campaign emphasizing the extended battery life

of the new smartphone model.
UNIT 3

Nature of Information Search

Internal and External Search:

1. Internal Search: This involves the consumer recalling information from their memory
based on past experiences and knowledge.

o Example: A person considering buying a new phone might remember their positive
experience with a particular brand they previously owned.

2. External Search: This involves seeking information from external sources beyond
personal knowledge.

o Example: A consumer reads online reviews, asks friends for recommendations, and
visits stores to learn about different phone models.

Passive and Active Search:

1. Passive Search: This involves absorbing information without actively seeking it.
Consumers come across information in their daily activities.

o Example: Seeing an advertisement on TV or coming across a billboard while

driving.

2. Active Search: This involves actively looking for information to make an informed
decision.

o Example: Searching for product reviews on websites or comparing prices online.

Type of Information Sought by Consumers

1. Evaluative Criteria: The attributes or criteria consumers use to compare and evaluate
products.

o Example: For a smartphone, evaluative criteria might include battery life, camera
quality, price, and brand reputation.
 2. Alternatives Available: The different options or brands available to fulfill the consumer's
needs.

o Example: A consumer looking for a new smartphone might consider alternatives

such as Apple, Samsung, Google, and OnePlus.

3. Alternative Characteristics: The specific features and benefits of each alternative.

o Example: When comparing smartphones, a consumer might look at features like

screen size, processor speed, storage capacity, and unique selling points such as
water resistance or wireless charging.

Sources of Consumer Information

1. Personal Sources: Friends, family, and acquaintances who provide recommendations and
advice based on their experiences.

o Example: Asking a friend about their experience with a particular car model.

2. Commercial Sources: Advertising, salespeople, and promotional materials provided by

companies.

o Example: Reading a brochure or watching a commercial for a new product.

3. Public Sources: Information from independent and objective sources such as consumer
reports, online reviews, and media articles.

o Example: Reading a review on a tech website about the latest laptop.

4. Experiential Sources: Direct experiences with the product, such as test driving a car or
sampling food in a grocery store.

o Example: Test driving a car before making a purchase decision.

5. Online Sources: Websites, social media, forums, and blogs where consumers can gather
information and opinions.

o Example: Reading customer reviews on Amazon or discussing products in a forum

like Reddit.
Information Search on the Internet

1. Search Engines: Using search engines like Google to find information about products and
services.

o Example: Searching for "best smartphones 2024" on Google.

2. Review Websites: Websites dedicated to reviewing and comparing products.

o Example: Checking reviews on websites like CNET, TechRadar, or Consumer

Reports.

3. E-commerce Platforms: Online shopping sites where consumers can read reviews and
compare prices.

o Example: Browsing products on Amazon and reading customer feedback.

4. Social Media: Platforms where consumers can read opinions, watch unboxing videos, and
see influencer endorsements.

o Example: Watching a YouTube review or reading Twitter posts about a new gadget.

5. Company Websites: Visiting official websites of brands to get detailed product

information and specifications.

o Example: Visiting Apple's website to read about the latest iPhone features.

6. Online Forums and Communities: Participating in discussions on forums like Reddit or

specialized communities like Stack Exchange.

o Example: Asking for recommendations on a subreddit dedicated to tech gadgets.

Marketing Strategies in Information Search

1. Maintenance Strategy: Ensuring that current customers remain loyal and continue
purchasing the product.

o Example: A company might send regular updates and special offers to existing
customers via email to maintain their interest.

2. Disrupt Strategy: Disrupting the decision process of consumers loyal to competitors.

 o Example: A new coffee brand might launch a bold advertising campaign to
challenge the market leader and attract its customers.

3. Capture Strategy: Capturing consumers who are actively searching for information about
a particular product category.

o Example: Using search engine optimization (SEO) and targeted ads to appear in
search results when consumers look for "best smartphones."

4. Intercept Strategy: Intercepting consumers during their information search with targeted
marketing efforts.

o Example: Placing ads on social media platforms that users frequently visit when
researching products.

5. Preference Strategy: Shaping consumer preferences and ensuring the brand is preferred
over competitors.

o Example: Creating a strong brand image and positive associations through

consistent messaging and high-quality products.
Unit 4

Consumer’s Choice

Rational Choice:

• Definition: Consumers use logical and systematic processes to evaluate alternatives and
make decisions based on objective criteria and factual information.

• Example: A consumer comparing the fuel efficiency, safety ratings, and price of several
car models before making a purchase.

Affective Choice:

• Definition: Consumers make decisions based on emotions and feelings rather than logical
evaluation. This choice is influenced by personal feelings, mood, and emotions.

• Example: Choosing a vacation destination because it evokes happy memories or feelings

of relaxation, even if it’s more expensive than other options.

Attribute-Based Choice:

• Definition: Consumers evaluate each alternative based on specific attributes or features.

They focus on comparing detailed attributes across different products.

• Example: A consumer comparing laptops based on attributes such as processor speed,

RAM, storage capacity, and battery life.

Attitude-Based Choice:

• Definition: Consumers make decisions based on overall attitudes or impressions of the

brands or products rather than detailed attribute-by-attribute comparisons.

• Example: Choosing a brand of clothing because of a positive overall impression of the

brand's style and quality, even without detailed comparison of individual items.

Evaluative Criteria and Its Measurement

Evaluative Criteria:
 • Definition: The dimensions or attributes that consumers consider when reviewing and
comparing alternative solutions to their problem. Common criteria include price, quality,
features, and brand reputation.

• Example: When buying a smartphone, common evaluative criteria might include battery
life, camera quality, screen size, price, and brand reputation.

Measurement:

1. Objective Measures: Quantifiable attributes such as price, weight, size, and battery life.

o Example: Measuring battery life in hours for smartphones.

2. Subjective Measures: Perceived attributes such as brand image, style, or comfort.

o Example: Surveying consumers to rate the comfort of different shoe brands on a

scale of 1 to 10.

Consumer Decision Rules

1. Conjunctive Decision Rule:

o Definition: Consumers establish minimum acceptable levels for each attribute. Any
option that does not meet the minimum criteria for all attributes is rejected.

o Example: A consumer might reject any laptop that has less than 8GB of RAM, a
battery life of less than 10 hours, or a price higher than $1,000.

2. Disjunctive Decision Rule:

o Definition: Consumers establish acceptable standards for each attribute. An option

is selected if it meets the acceptable standard for any one attribute.

o Example: A consumer might choose a smartphone if it has either an excellent

camera, a long battery life, or a great price, even if it doesn’t excel in all areas.

3. Lexicographic Decision Rule:

o Definition: Consumers rank attributes in order of importance and compare options

based on the most important attribute first. If one option is superior on the most
 important attribute, it is chosen; if not, the process continues with the next most
important attribute.

o Example: A consumer might rank fuel efficiency as the most important attribute
for a car, safety as the second, and price as the third. They compare cars based on
fuel efficiency first and choose the one with the best efficiency, moving to the next
attribute only if necessary.

4. Compensatory Decision Rule:

o Definition: Consumers evaluate each option by considering all attributes and allow
for positive attributes to compensate for negative ones. They choose the option with
the highest overall score.

o Example: A consumer might rate laptops on a variety of attributes like

performance, battery life, weight, and price, giving each attribute a weight based
on importance and choosing the laptop with the highest weighted score.

Marketing Strategies in Evaluation and Choice

1. Highlight Key Attributes: Emphasize the most important features of the product that align
with the evaluative criteria consumers are likely to use.

o Example: An electronics company highlights the superior camera quality and

battery life of its new smartphone in its advertisements.

2. Brand Positioning: Establish a strong brand image and reputation to influence attitude-
based choices.

o Example: A luxury car brand positioning itself as a symbol of status and prestige.

3. Product Differentiation: Clearly differentiate products from competitors by emphasizing

unique features or benefits.

o Example: A clothing brand emphasizing its use of sustainable materials and ethical
production practices.

4. Customer Reviews and Testimonials: Leverage positive customer reviews and

testimonials to influence consumers' perceptions and attitudes.
 o Example: An online retailer showcasing positive customer reviews and high ratings
on product pages.

5. Promotions and Discounts: Use promotions and discounts to influence rational and
affective choices, especially for price-sensitive consumers.

o Example: Offering a limited-time discount on a new product to encourage trial and

purchase.

6. Comparison Tools: Provide tools and resources that help consumers compare products
based on evaluative criteria.

o Example: An e-commerce website offering a side-by-side comparison feature for

different products.

7. Information Accessibility: Ensure that detailed and relevant information about the product
is easily accessible to consumers.

o Example: A technology company providing detailed specifications, user manuals,

and FAQ sections on its website.

8. In-Store Experience: Enhance the in-store experience to aid in the evaluation process,
such as offering product demonstrations and knowledgeable staff.

o Example: A home appliance store having live demos and experts available to
answer customer questions about the latest models.
Unit 5

Post Purchase Dissonance

Definition: Post-purchase dissonance, also known as buyer's remorse, is the feeling of regret or
anxiety a consumer experiences after making a significant purchase. This often happens when
there is a discrepancy between the consumer’s expectations and the actual performance or benefits
of the product.

Example: After buying an expensive laptop, a consumer might worry if they made the right choice
or if another brand would have been a better option.

Reasons for Post Purchase Dissonance

1. High Involvement Purchase: Significant investment in terms of money, time, and effort.

o Example: Buying a car or a house.

2. Multiple Alternatives: The existence of many alternatives that the consumer could have
chosen.

o Example: Choosing a smartphone when many models are available.

3. Difficult Choice: Complexity in decision-making due to similar product features.

o Example: Selecting a health insurance plan with similar benefits and costs.

4. Emotional Attachment: High emotional involvement with the product.

o Example: Buying a wedding dress.

5. Peer Pressure: Influence of friends and family.

o Example: Purchasing a trendy gadget because friends have it.

6. Unmet Expectations: The product doesn’t meet the consumer’s expectations.

o Example: A fitness tracker that doesn’t accurately track steps or heart rate.

Remedies for Post Purchase Dissonance

1. Customer Support: Providing excellent after-sales service and support.

 o Example: Offering 24/7 customer service to address any concerns or issues.

2. Return Policies: Having a flexible return and exchange policy.

o Example: A 30-day no-questions-asked return policy.

3. Follow-Up Communication: Reaching out to customers post-purchase to ensure

satisfaction.

o Example: Sending a follow-up email asking for feedback.

4. Product Warranties: Offering warranties and guarantees to assure product quality.

o Example: A two-year warranty on electronic devices.

5. User Reviews and Testimonials: Sharing positive reviews and testimonials from other
customers.

o Example: Highlighting customer success stories on the website.

6. Education and Usage Tips: Providing information on how to use the product effectively.

o Example: Offering tutorials and how-to videos.

7. Loyalty Programs: Engaging customers through loyalty programs and rewards.

o Example: Offering points or discounts on future purchases.

Product Use

Key Reasons Marketers Need to Understand Product Use:

1. Enhance User Experience: Understanding how consumers use the product helps improve
product design and functionality.

o Example: Observing that users find certain features of a smartphone difficult to

use, leading to design changes.

2. Targeted Marketing: Tailoring marketing strategies based on how different segments use
the product.
 o Example: Promoting a multi-functional kitchen appliance to busy professionals
emphasizing time-saving features.

3. Customer Satisfaction: Ensuring the product meets consumer needs and expectations.

o Example: Regular surveys to gauge satisfaction with product performance.

4. Product Development: Gaining insights for future product enhancements or new product
development.

o Example: Developing a new feature based on user feedback about existing

limitations.

5. Competitive Advantage: Understanding unique ways consumers use the product can
provide a competitive edge.

o Example: Discovering a novel use for a household cleaner that sets it apart from
competitors.

Product Non-Use

Reasons Consumers May Not Use a Product:

1. Lack of Understanding: Consumers don’t know how to use the product.

o Example: A complex piece of software that is difficult to navigate without proper

guidance.

2. Dissatisfaction: The product doesn’t meet expectations or is of poor quality.

o Example: A smartphone with a battery that doesn’t last as advertised.

3. Changed Needs: Consumer needs or preferences change over time.

o Example: A fitness enthusiast stops using a treadmill because they prefer outdoor
running.

4. Alternative Solutions: Consumers find better alternatives or substitutes.

o Example: Switching from a regular vacuum cleaner to a robotic vacuum cleaner.

 5. Product Incompatibility: The product isn’t compatible with other products or systems the
consumer uses.

o Example: A software application that doesn’t work on a consumer’s operating

system.

Product Disposition

Disposition Methods:

1. Disposal:

o Definition: Throwing away or discarding the product.

o Example: Disposing of a broken appliance in the trash.

2. 3R Method (Reduce, Reuse, Recycle):

o Reduce: Minimizing waste by buying less or choosing products with minimal

packaging.

▪ Example: Opting for bulk items with less packaging.

o Reuse: Finding new uses for products instead of discarding them.

▪ Example: Repurposing glass jars as storage containers.

o Recycle: Processing used materials into new products.

▪ Example: Recycling old newspapers into new paper products.

Marketing Strategies:

1. Promoting Recycling Programs: Encouraging consumers to recycle products through

company-sponsored programs.

o Example: Electronics companies offering recycling programs for old devices.

2. Incentives for Returns: Providing discounts or rewards for returning used products.

o Example: Clothing brands offering discounts for returning old garments.

3. Educating Consumers: Informing consumers about proper disposal methods.

 o Example: Providing clear instructions on how to recycle product packaging.

4. Sustainable Packaging: Using eco-friendly packaging to reduce environmental impact.

o Example: Biodegradable packaging for food products.

5. Second-Hand Markets: Encouraging the resale or donation of used products.

o Example: Platforms for reselling used electronics or clothing.

6. Product Take-Back Programs: Implementing programs where consumers can return old
products for proper disposal.

o Example: Furniture stores offering take-back services for old furniture.

Satisfaction and Dissatisfaction

Satisfaction:

• Definition: The feeling of pleasure or contentment when a product meets or exceeds

consumer expectations.

• Example: A consumer feels satisfied with their new laptop because it performs well and
meets all their needs.

Dissatisfaction:

• Definition: The feeling of disappointment when a product fails to meet consumer

expectations.

• Example: A consumer feels dissatisfied with a new smartphone that has frequent software
glitches.

Factors Influencing Satisfaction and Dissatisfaction:

1. Product Quality: Higher quality often leads to higher satisfaction.

2. Customer Service: Good service can enhance satisfaction, while poor service can lead to
dissatisfaction.

3. Value for Money: Consumers feel satisfied when they perceive they’ve received good
value for their money.
 4. Expectations: Meeting or exceeding expectations leads to satisfaction, while unmet
expectations result in dissatisfaction.

5. Experience: Positive user experience increases satisfaction, whereas negative experiences

lead to dissatisfaction.

Consumer Complaint Behavior

Definition: Consumer complaint behavior refers to the actions taken by consumers when they are
dissatisfied with a product or service.

Types:

1. Voice Response: Complaining directly to the company.

o Example: Contacting customer service to report a defective product.

2. Private Response: Sharing dissatisfaction with friends and family or on social media.

o Example: Posting a negative review on social media.

3. Third-Party Response: Seeking redress through third parties like consumer protection
agencies or legal action.

o Example: Filing a complaint with a consumer protection agency.

Managing Complaints:

1. Effective Communication: Listen to and acknowledge the consumer’s issues.

2. Quick Resolution: Resolve complaints quickly and efficiently.

3. Compensation: Offering refunds, replacements, or other forms of compensation.

4. Customer Follow-Up: Following up to ensure the consumer is satisfied with the

resolution.

5. Improving Processes: Using complaint feedback to improve products and services.

Satisfaction and Brand Loyalty

Satisfaction:
 • Definition: The positive emotional state resulting from a product meeting or exceeding
expectations.

• Example: A customer repeatedly buys the same brand of coffee because they are
consistently satisfied with the taste and quality.

Brand Loyalty:

• Definition: A consumer’s commitment to repurchase or continue using a brand,

demonstrated by repeat buying behavior.

• Example: A consumer always chooses Nike for their sportswear needs.

Factors Influencing Brand Loyalty:

1. Consistent Quality: Delivering consistent quality reinforces loyalty.

2. Customer Engagement: Engaging with customers through personalized marketing and

loyalty programs.

3. Positive Experiences: Creating memorable and positive brand experiences.

4. Emotional Connection: Building an emotional connection with the brand through shared
values and experiences.

5. Trust: Establishing trust through reliable and transparent business practices.

Unit 6

Individual Factors Influencing Consumer Behavior

Consumer Motivation

Nature of Consumer Motivation:

1. Goal-Oriented: Motivation drives consumers to achieve specific goals or fulfill needs.

o Example: Buying a car to improve personal transportation.

2. Dynamic: Motivation changes over time based on internal and external factors.

o Example: Changing dietary preferences from fast food to healthy eating.

3. Positive and Negative: Can be driven by the desire to achieve positive outcomes or avoid
negative ones.

o Example: Buying insurance to avoid financial loss.

4. Intrinsic and Extrinsic: Intrinsic motivation comes from within, while extrinsic is
influenced by external rewards.

o Example: Exercising for personal health (intrinsic) vs. for a competition prize
(extrinsic).

5. Hierarchical: Based on Maslow’s hierarchy, starting from basic needs to self-

actualization.

o Example: From needing food and shelter to seeking personal growth and
fulfillment.

6. Arousal and Regulation: Involves the level of arousal and how it is managed.

o Example: Arousal from hunger drives the search for food.

7. Needs and Wants: Differentiating between essential needs and additional wants.

o Example: Needing water vs. wanting a luxury bottled water brand.

 8. Psychological and Physiological: Motivation can be driven by psychological desires or
physiological necessities.

o Example: Needing sleep (physiological) vs. seeking social acceptance

(psychological).

Sources of Consumer Motivation:

1. Biological Needs: Basic physiological needs such as hunger, thirst, and shelter.

o Example: Buying food when hungry.

2. Emotional Needs: Driven by emotions like love, fear, joy, and sadness.

o Example: Purchasing gifts for loved ones.

3. Cognitive Needs: Involving mental processes and learning.

o Example: Seeking information and knowledge about a product before purchase.

4. Social Needs: The need for affiliation, acceptance, and belonging.

o Example: Joining clubs or social groups.

5. Cultural Influences: Motivations shaped by cultural norms and values.

o Example: Buying products traditional to one’s culture.

6. Environmental Stimuli: Influences from the consumer’s surroundings.

o Example: Advertising and peer pressure.

7. Personal Aspirations: Personal goals and desires.

o Example: Aiming for career success and buying professional attire.

8. Psychological Drivers: Internal mental and emotional factors.

o Example: The desire for self-esteem and confidence.

9. Economic Factors: Financial status and economic conditions.

o Example: Spending patterns influenced by income levels.

Consumer Learning

Nature of Consumer Learning:

1. Ongoing Process: Continuous and dynamic, as consumers acquire new information and
experiences.

o Example: Learning about a new product feature after purchase.

2. Experience-Based: Learning through direct experiences with products.

o Example: Trying out a free sample and deciding to purchase.

3. Associative: Forming associations between different stimuli.

o Example: Associating a jingle with a brand.

4. Observational: Learning by observing others’ behaviors and outcomes.

o Example: Seeing friends use a product and deciding to buy it.

5. Cognitive Learning: Involves mental processes like thinking, understanding, and

problem-solving.

o Example: Researching and comparing products online.

6. Behavioral Learning: Based on the responses to external stimuli.

o Example: Responding to discounts and promotions.

7. Reinforcement and Punishment: Learning through rewards and consequences.

o Example: A positive review reinforcing a purchase decision.

Sources of Consumer Learning:

1. Personal Experiences: Direct interaction with products and services.

o Example: Using a trial version of software.

2. Family and Friends: Learning from the opinions and behaviors of close social circles.

o Example: Taking recommendations from friends.

 3. Marketing Communications: Advertisements, promotions, and brand messages.

o Example: TV commercials and social media ads.

4. Public Sources: Reviews, news articles, and expert opinions.

o Example: Reading product reviews on consumer websites.

5. Formal Education: Learning through structured educational content.

o Example: Reading user manuals or attending product workshops.

Learning and Consumer Memory:

1. Encoding: The process of converting information into a form that can be stored in memory.

o Example: Memorizing brand slogans or jingles.

2. Storage: Retaining encoded information over time.

o Example: Storing knowledge about product features.

3. Retrieval: Accessing stored information when needed.

o Example: Remembering a brand during a purchase decision.

Consumer Memory Types:

1. Sensory Memory: The immediate, brief recording of sensory information.

o Example: Briefly remembering a catchy jingle heard in a commercial.

2. Short-Term Memory: Holds information temporarily for analysis and use.

o Example: Recalling a product feature during shopping.

3. Long-Term Memory: Stores information permanently for future use.

o Example: Remembering a brand’s reputation over years.

Consumer Perception

Nature of Consumer Perception:

 1. Subjective: Perception varies from person to person based on individual experiences and
biases.

o Example: Different consumers having different opinions on a product’s quality.

2. Selective: Consumers filter information based on their interests and needs.

o Example: Ignoring irrelevant advertisements.

3. Temporal: Perception changes over time with new experiences and information.

o Example: Changing perception of a brand after a negative experience.

4. Contextual: Influenced by the context in which information is received.

o Example: Perception of a product in a high-end store vs. a discount store.

5. Dynamic: Constantly evolving with new information and experiences.

o Example: Shifting brand perceptions due to social media influence.

6. Cognitive: Involves mental processes of understanding and interpreting information.

o Example: Perceiving a high price as an indicator of quality.

7. Emotional: Affected by emotions and feelings.

o Example: A positive emotional response to a brand’s storytelling.

8. Cultural: Shaped by cultural background and norms.

o Example: Perception of beauty products varying across cultures.

Process of Perception:

1. Exposure: The process by which a consumer comes into contact with a stimulus.

o Example: Seeing a billboard while driving.

2. Attention: The process of focusing on specific stimuli.

o Example: Paying attention to an online ad because it’s relevant.

3. Interpretation: The process of assigning meaning to stimuli.

 o Example: Interpreting a luxury car ad as a symbol of success.

Personality

Nature of Personality:

1. Unique: Every individual has a distinct personality.

o Example: Two consumers having different reactions to the same advertisement.

2. Stable: Personality traits remain relatively consistent over time.

o Example: A consumer consistently preferring adventurous activities.

3. Internal and External: Influenced by both internal dispositions and external

environments.

o Example: Being naturally introverted but more outgoing in familiar settings.

4. Complex: Comprised of various traits and characteristics.

o Example: A mix of extraversion, agreeableness, and conscientiousness.

5. Dynamic: Can evolve with new experiences and personal growth.

o Example: A person becoming more open to new experiences over time.

Types of Consumer Personality:

1. Freudian Theory: Emphasizes unconscious motives and childhood experiences.

o Example: A consumer driven by deep-seated desires for status or security.

2. Neo-Freudian Theory: Focuses on social relationships and the influence of society.

o Example: Buying products to fit into social groups or communities.

3. Trait Theory: Identifies specific traits that can predict consumer behavior.

o Example: Highly conscientious consumers preferring organized and reliable

products.
 4. Big Five Theory: Categorizes personality into five dimensions—openness,
conscientiousness, extraversion, agreeableness, and neuroticism.

o Example: An extroverted person being more likely to engage with social media
campaigns.

Consumer Personality and Brand Personality:

• Consumer Personality: Reflects individual traits and behaviors.

o Example: A risk-taker preferring bold and innovative products.

• Brand Personality: Assigns human characteristics to brands to resonate with consumer

personalities.

o Example: Apple being seen as innovative and sophisticated.

Impact:

• Aligning brand personality with target consumer personalities can enhance brand loyalty
and engagement.

o Example: Red Bull’s adventurous brand personality appealing to thrill-seekers.

Consumer Attitudes

Nature of Consumer Attitudes:

1. Learned: Attitudes are developed through experiences and learning.

o Example: Developing a positive attitude towards a brand after multiple satisfying

purchases.

2. Consistent: Attitudes are generally stable and consistent over time.

o Example: Consistently disliking a brand after a negative experience.

3. Predictive: Attitudes can predict future behavior.

o Example: A positive attitude towards environmental issues predicting the purchase

of eco-friendly products.
 4. Evaluative: Attitudes involve evaluations of objects, people, or issues.

o Example: Evaluating a brand based on its ethical practices.

5. Multidimensional: Attitudes comprise cognitive, affective, and behavioral components.

o Example: Thinking highly of a product (cognitive), feeling happy using it

(affective), and recommending it to others (behavioral).

6. Influenced by Beliefs: Attitudes are shaped by underlying beliefs.

o Example: Believing that a brand is high quality leads to a positive attitude.

Components of Attitudes:

1. Affective: Emotional feelings towards an object.

o Example: Feeling excited about a new smartphone.

2. Behavioral: The actions or behaviors towards an object.

o Example: Purchasing a product regularly.

3. Cognitive: Beliefs and thoughts about an object.

o Example: Believing that a brand is reliable and trustworthy.

Attitude Formation:

1. Direct Experience: Formed through personal use and interaction.

o Example: Developing a favorable attitude towards a brand after a positive product

experience.

2. Social Influence: Shaped by family, friends, and social groups.

o Example: Adopting attitudes towards a brand based on peer recommendations.

3. Marketing Communications: Influenced by advertising and promotions.

o Example: Positive advertising leading to a favorable attitude.

4. Cultural Factors: Shaped by cultural norms and values.

 o Example: Attitudes towards luxury goods influenced by cultural perceptions of
status.

5. Cognitive Dissonance: Changing attitudes to reduce discomfort from conflicting beliefs.

o Example: Changing a negative attitude after learning positive information.

6. Classical Conditioning: Associating a product with positive stimuli.

o Example: Pairing a brand with pleasant music in advertisements.

7. Operant Conditioning: Attitudes formed through rewards and punishments.

o Example: Developing a positive attitude towards a brand after receiving good

customer service.

Attitude Change:

1. Persuasive Communication: Using arguments and messages to change attitudes.

o Example: A compelling ad campaign changing negative perceptions.

2. Social Influence: Changing attitudes through social proof and peer pressure.

o Example: Influencers promoting a brand leading to attitude change.

3. Repetition: Repeated exposure to messages changing attitudes over time.

o Example: Consistent brand messaging in advertisements.

4. Emotional Appeals: Using emotions to alter attitudes.

o Example: Emotional storytelling in ads creating positive feelings towards a brand.

5. Cognitive Dissonance: Resolving dissonance by changing attitudes.

o Example: A consumer changing their attitude towards a product to align with their
behavior.

6. Behavioral Change: Changing behavior to subsequently change attitudes.

o Example: Trying a product and changing attitude based on positive experience.

7. Incentives: Offering rewards to change attitudes.

o Example: Discounts or promotions leading to positive attitude change.

8. Information Processing: Providing new information to change beliefs and attitudes.

o Example: Educating consumers about product benefits.

Unit 7

Group and Family Influences

Reference Group Influences

Nature of Reference Group Influences:

1. Social Norms: Reference groups help establish social norms and expectations.

o Example: Fashion trends popularized by celebrities influence the clothing choices

of their followers.

2. Identification and Aspiration: Consumers often aspire to be part of or be like certain

groups.

o Example: Young professionals might aspire to join high-status groups like tech
entrepreneurs, influencing their choices in tech gadgets.

3. Informational Influence: Reference groups provide valuable information and opinions.

o Example: Friends recommending a restaurant or a product based on their

experiences.

4. Normative Influence: Influence based on the desire to conform to group expectations.

o Example: Buying environmentally-friendly products to align with the values of an

eco-conscious social group.

5. Value-Expressive Influence: Reference groups help individuals express their own values
and self-concept.

o Example: Individuals buying luxury brands to reflect a high-status image.

6. Pressure and Influence: Direct or indirect pressure from reference groups can affect
decisions.

o Example: Peer pressure influencing teenagers to purchase the latest smartphone.

Degree of Reference Group Influences:

 1. High Influence in Visible Purchases: Groups have a stronger influence on visible and
socially significant purchases.

o Example: Choosing a high-end car based on social status and group norms.

2. Opinion Leadership: Individuals with strong opinions or expertise within a group can
sway others.

o Example: A respected tech blogger influencing the tech gadget purchases of their
followers.

3. Frequency of Interaction: Frequent interaction with a group increases influence.

o Example: Family members having a stronger influence on daily choices than

distant acquaintances.

4. Group Cohesiveness: The tighter-knit and more cohesive the group, the greater the
influence.

o Example: Close-knit social clubs having a greater influence on their members’

preferences.

5. Group Status: Higher-status or prestigious groups have more influence.

o Example: Influence of high-profile celebrity endorsements on consumer behavior.

6. Relevance to Purchase: Groups relevant to the purchase category will have more
influence.

o Example: A fitness group influencing gym equipment choices.

7. Group Membership: Being a part of a reference group can affect decision-making.

o Example: Being a member of a vegan group affecting food product choices.

8. Group Dynamics: The dynamics and structure of a group can affect influence.

o Example: The influence of a professional network on business attire and gadgets.

Marketing Strategies Based on Reference Group Influences:

1. Celebrity Endorsements: Use celebrities to influence consumer choices.

 o Example: Ads featuring popular athletes promoting sportswear.

2. Social Proof: Show that others are using the product to encourage adoption.

o Example: Displaying user testimonials and reviews on product websites.

3. Influencer Partnerships: Collaborate with influencers who have sway over target
demographics.

o Example: Partnering with fashion influencers to promote new clothing lines.

4. Group Promotions: Offer discounts or deals for groups or memberships.

o Example: Group discounts for fitness memberships or family plans.

5. Community Engagement: Create campaigns that align with community values and
interests.

o Example: Sponsoring local events to connect with community groups.

6. Referral Programs: Encourage existing customers to refer others.

o Example: Referral bonuses or incentives for recommending a product to friends.

Family Influences

Structure of Household:

1. Number of Children: Affects purchasing decisions and brand preferences.

o Example: Larger families may prioritize bulk buying or budget-friendly options.

2. Presence of Extended Family Members: Influences household dynamics and decision-

making.

o Example: Extended family living with the nuclear family can affect home purchase
decisions.

3. Parental Roles: Differing roles of parents in decision-making.

o Example: Parents making decisions about children's education and extracurricular

activities.
 4. Relationships Between Family Members: The dynamics and relationships can affect
decisions.

o Example: A family with strong communication might make joint decisions about
vacations.

5. Influence of Non-Family Members: Friends or neighbors can also influence family

decisions.

o Example: Recommendations from friends influencing home appliance purchases.

Family Decision Roles:

1. Decision Maker: The individual who makes the final decision.

o Example: The primary breadwinner deciding on a new car purchase.

2. Advisor: Provides advice or recommendations but does not make the final decision.

o Example: Teenagers advising on family vacation destinations.

3. Gatekeeper: Controls information and access to other family members.

o Example: The parent who filters and presents educational content to children.

4. Influencer: Affects the decision-making process through suggestions or preferences.

o Example: A child expressing interest in a specific brand of toys influencing the

purchase.

5. Mediator: Helps resolve conflicts and reach a decision.

o Example: A family member negotiating between differing opinions on a home

renovation.

6. Purchaser: The one who actually buys the product or service.

o Example: The spouse who physically goes to the store to buy groceries.

Family Life Cycle:

1. Pre-Family: Individuals or couples without children.

 o Example: Young couples focusing on career-oriented products and travel.

2. Forming Family: Couples expecting their first child or starting a family.

o Example: Buying baby products and preparing the home for a new arrival.

3. Early Family: Families with young children.

o Example: Purchasing child-oriented products, like toys and educational materials.

4. Mid-Family: Families with older children or teenagers.

o Example: Investing in higher education or family vacations.

5. Late Family: Families where children are adults and may be leaving the home.

o Example: Downsizing or investing in retirement plans.

6. Dissolving Family: Families experiencing changes such as divorce or loss.

o Example: Adjusting to new living arrangements and re-evaluating financial

priorities.
Unit 8

Social Class and Cultural Influences

Social Class Hierarchy and Consumption Behavior in Nepal

Social Class Hierarchy in Nepal:

1. Lower Class:

o Characteristics: Typically includes individuals with low income, limited

education, and minimal access to resources.

o Consumption Behavior: Focuses on basic necessities. Limited spending on non-

essential or luxury items.

o Example: Purchasing affordable, basic clothing and food items.

2. Lower Middle Class:

o Characteristics: Individuals with moderate income, some education, and access to

basic amenities.

o Consumption Behavior: Balances between essential needs and occasional

discretionary spending. Preference for value-for-money products.

o Example: Buying branded but affordable household goods and mid-range

electronics.

3. Middle Class:

o Characteristics: Includes people with stable incomes, higher education, and a

comfortable standard of living.

o Consumption Behavior: More discretionary spending on lifestyle and comfort.

Interest in quality and brand reputation.

o Example: Purchasing quality home appliances, vacations, and dining out at mid-
range restaurants.

4. Upper Middle Class:

 o Characteristics: Higher income, significant education, and more disposable
income.

o Consumption Behavior: Invests in premium and luxury products. Focuses on

brand prestige and exclusivity.

o Example: Buying luxury cars, high-end electronics, and international travel.

5. Upper Class:

o Characteristics: The wealthiest class with substantial income, significant assets,

and high social status.

o Consumption Behavior: Consumes luxury goods and services. Emphasis on

exclusivity, status symbols, and high-end brands.

o Example: Purchasing designer fashion, luxury real estate, and exclusive high-end
services.

Cultural and Subcultural Influences

Nature of Culture:

1. Shared Beliefs and Values: Culture consists of shared beliefs, values, and practices among
a group.

o Example: In Nepal, Hindu and Buddhist traditions influence cultural practices and
festivals.

2. Symbolic Meaning: Culture assigns symbolic meanings to objects, behaviors, and rituals.

o Example: The use of saffron color in religious ceremonies symbolizing purity and
sanctity.

3. Learned Behavior: Culture is learned through socialization processes within a community.

o Example: Traditional cooking methods and recipes passed down through

generations.
 4. Dynamic and Evolving: Culture is not static; it evolves with changes in society and
external influences.

o Example: Modern influences leading to changes in traditional clothing styles.

5. Cultural Norms and Standards: Cultural norms dictate acceptable behavior and social
practices.

o Example: The custom of removing shoes before entering a home in Nepal.

6. Cultural Institutions: Institutions like family, religion, and education shape cultural
norms and values.

o Example: Educational institutions teaching cultural history and values.

7. Cultural Diversity: Different cultures exist within a society, contributing to a rich tapestry
of practices and beliefs.

o Example: Various ethnic groups in Nepal having their own distinct customs and
traditions.

Cultural Dynamism:

• Change Over Time: Culture evolves as societies progress and integrate new influences.

o Example: The adoption of modern technology and its integration into traditional
practices.

• Adaptation to External Influences: Cultures adapt to influences from other cultures

through globalization.

o Example: Western-style fast food becoming popular in Nepal alongside traditional

cuisine.

• Interaction Between Cultures: Cross-cultural interactions lead to cultural blending and

the emergence of new practices.

o Example: Fusion cuisine combining traditional Nepali ingredients with

international cooking styles.
 • Generational Shifts: Younger generations often embrace new cultural trends while
maintaining traditional practices.

o Example: Younger Nepalis adopting modern fashion trends while still participating
in traditional festivals.

• Cultural Innovations: New cultural practices emerge as a result of innovation and

creativity.

o Example: Modern art forms and music genres integrating traditional Nepali
elements.

Values, Norms, and Myths:

• Values: Core principles and standards that guide behavior.

o Example: In Nepal, values of respect for elders and family cohesion are deeply
ingrained.

• Norms: Social rules and expectations that dictate appropriate behavior.

o Example: Norms surrounding wedding ceremonies and rituals in Nepalese culture.

• Myths: Traditional stories or beliefs that explain cultural practices and values.

o Example: Mythological stories from Hindu and Buddhist texts that influence
religious festivals and ceremonies.

Cross-Cultural Marketing:

• Understanding Cultural Differences: Tailoring marketing strategies to fit the cultural

context of different markets.

o Example: Adapting advertising campaigns to resonate with local customs and

values in Nepal.

• Localizing Products and Services: Modifying products to meet the preferences and needs
of different cultures.
 o Example: Offering vegetarian options in Nepalese restaurants to align with local
dietary preferences.

• Cultural Sensitivity in Communication: Ensuring marketing messages are respectful and

appropriate for the target culture.

o Example: Avoiding cultural taboos or insensitive topics in advertisements.

• Leveraging Local Influencers: Collaborating with local influencers to build trust and
credibility.

o Example: Partnering with popular Nepalese celebrities for product endorsements.

• Adapting to Local Market Trends: Understanding and incorporating local trends into
marketing strategies.

o Example: Incorporating traditional Nepali festivals and holidays into promotional

campaigns.

• Respecting Local Traditions and Customs: Aligning marketing strategies with local
customs and traditions.

o Example: Designing product packaging to reflect local artistic styles and symbols.

• Market Research and Insights: Conducting thorough research to understand cultural

nuances and consumer behavior.

o Example: Researching local buying habits and preferences to tailor product

offerings effectively.