LECTURE 1

INTRODUCTION TO THE STUDY

OF CONSUMER BEHAVIOR
CONSUMER BEHAVIOR
AFTER COMPLETION OF THIS LECTURE, YOU
WILL KNOW ABOUT:

• Definition and Meaning of Consumer Behavior

• Nature, Scope and Application of Consumer Behavior
INTRODUCTION

• Though similar, consumers are unique in themselves; they have needs

and wants which are varied and diverse from one another; and they have
different consumption patterns and consumption behavior.
• The marketer helps satisfy these needs and wants through product and
service offerings.
• For a firm to survive, compete and grow, it is essential that the marketer
identifies these needs and wants, and provides product offerings more
effectively and efficiently than other competitors.
 INTRODUCTION
• A comprehensive yet meticulous knowledge of consumers and their
consumption behavior is essential for a firm to succeed.
• Consumer Behavior may be defined as “the interplay of forces that takes
place during a consumption process, within a consumers’ self and his
environment.
• Interaction takes place between three elements:
• 1. Knowledge
• 2. Affect ( to influence something) and
• 3. Behavior
KNOWLEDGE INTERACTION

• All researchers at the Suntory World Research Center (SWR) not only
improve their expertise, but also broaden their perspectives by interacting
more with people from within Suntory, as well as with individuals and
institutions from outside Suntory, such as universities and corporations, in
the hope of creating future value together.
KNOWLEDGE INTERACTION
 AFFECT INTERACTION

• If you find an interaction, you can state this in several ways; e.g., that: a. One or
more main effect is qualified by an interaction. b. One or more main effect exists
overall, but the effect of one independent variable depends on (or differs based on)
the level of the other independent variable.
• The “main effects” would be the effect of a diet drink on weight loss, and
the effect of the diet pill on weight loss. The interaction effect happens when the
drink and pill taken at the same time. It's possible the combination could speed up
weight loss, or even slow it down
BEHAVIOR INTERACTION

• Interaction theory. Interaction theory (IT) is an approach to questions

about social cognition, or how one understands other people, that focuses
on bodily behaviors and environmental contexts rather than on mental
processes.
INTRODUCTION
• Interaction - it continues through:
• A. Pre-purchase activity to the
• B. Post purchase experience; - it includes the:
• 1. Stages of evaluating
• 2. Acquiring
• 3. Using and disposing of goods and services
 DEFINING CONSUMER BEHAVIOR

• The “consumer” includes both personal consumers and business / industrial /

organizational consumers.
• Consumer behavior explains the reasons and logic that underlie purchasing
decisions and consumption patterns; it explains the processes through which
buyers make decisions.
• The study includes within its purview (the scope of the influence) , the interplay
between cognition, affect and behavior that goes on within a consumer during the
consumption process: selecting, using and disposing off goods and services.
DEFINING CONSUMER BEHAVIOR

• Cognition: This includes within its ambit the “knowledge, information processing and
thinking” part; It includes the mental processes involved in processing of information,
thinking and interpretation of stimuli (people, objects, things, places and events). It would
be product or service offering; it could be a brand or even anything to do with the 4Ps.
• Affect: This is the “ feelings” part. It includes the favorable or unfavorable feelings
and corresponding emotions towards a stimuli (eg. towards a product or service offering
or a brand). These vary in direction, intensity and persistence.
DEFINING CONSUMER BEHAVIOR

• Behavior: This is the “visible” part. This could be the purchase activity:
to buy or not to buy (again specific to a product or service offering, a
brand or even related to any of the 4 Ps).
• The interaction is reciprocal between each of the three towards each
other and with the environment.
OTHER DEFINITIONS:

• “The behavior that consumers display in searching for, purchasing, using,

evaluating and disposing of products and services that they expect will satisfy
their needs.” - Schiffman and Kanuk

• “The decision process and physical activity engaged in when evaluating,

acquiring, using or disposing of goods and services." - Loudon and Bitta
OTHER DEFINITIONS

• “The study of consumers as they exchange something of value for a

product or service that satisfies their needs” - Wells and Prensky

• “Those actions directly involved in obtaining, consuming and disposing of

products and services including the decision processes that precede and
follow these actions”. -Engel, Blackwell, Miniard
NATURE AND SCOPE OF CONSUMER BEHAVIOR
• 1. The subject deals with issues related to cognition, affect and
behavior in consumption behaviors, against the backdrop of individual
and environmental determinants.
• The individual determinants pertain to an individual’s internal self and
include psychological components like personal motivation and
involvement, perception, learning and memory, attitudes, self-concept
and personality, and, decision making.
NATURE AND SCOPE OF CONSUMER BEHAVIOR

• The environmental determinants pertain to external influences

surrounding an individual and include sociological, anthropological and
economic components like the family, social groups, reference groups,
social class, culture, sub-culture, cross-culture, and national and
regional influences.
NATURE AND SCOPE OF CONSUMER BEHAVIOR
• 2. The subject can be studied at micro or macro levels depending upon whether it is
analyzed at the individual level or at the group level.
• 3. The subject is interdisciplinary. It has borrowed heavily from psychology (the study
of the individual: individual determinants in buying behavior), sociology (the study of
groups: group dynamics in buying behavior), social psychology (the study of how an
individual operates in group/groups and its effects on buying behavior), anthropology
(the influence of society on the individual: cultural and cross-cultural issues in buying
behavior), and economics (income and purchasing power).
NATURE AND SCOPE OF CONSUMER BEHAVIOR
• 4. Consumer behavior is dynamic and interacting in nature. The three components of
cognition, affect and behavior of individuals alone or in groups keeps on changing; so
does the environment.
• There is a continuous interplay or interaction between the three components
themselves and with the environment. This impacts consumption pattern and behavior
and it keeps on evolving and it is highly dynamic.
• 5. Consumer behavior involves the process of exchange between the buyer and the
seller, mutually beneficial for both.
NATURE AND SCOPE OF CONSUMER BEHAVIOR
• 6. As a field of study it is descriptive and also analytical/ interpretive.
• It is descriptive as it explains consumer decision making and behavior in the context
of individual determinants and environmental influences.
• It is analytical/ interpretive, as against a backdrop of theories borrowed from
psychology, sociology, social psychology, anthropology and economics, the study
analyzes consumption behavior of individuals alone and in groups.
NATURE AND SCOPE OF CONSUMER BEHAVIOR
• 6. As a field of study it is descriptive and also analytical/ interpretive.
• It is analytical/ interpretive,
• It makes use of qualitative and quantitative tools and techniques for research and
analysis, with the objective to understand and predict consumption behavior.
• 7. It is a science as well as an art. It uses both, theories borrowed from social sciences to
understand consumption behavior, and quantitative and qualitative tools and techniques to
predict consumer behavior.
NATURE AND SCOPE OF CONSUMER BEHAVIOR
• Scope of Consumer Behavior:
• The study of consumer behavior deals with understanding consumption patterns and
behavior.
• It includes within its ambit the answers to the following: - ‘What’ the consumers buy:
goods and services - ‘Why’ they buy it: need and want - ‘When’ do they buy it: time:
day, week, month, year, occasions etc. - ‘Where’ they buy it: place - ‘How often they
buy’ it: time interval - ‘How often they use’ it: frequency of use
NATURE AND SCOPE OF CONSUMER BEHAVIOR
• Scope of Consumer Behavior:
• The scope of consumer behavior includes not only the actual buyer but also the various
roles played by him/ different individuals.
• Basic Components (explained next slide)
• Decision making (Cognitive and Affect):
• -this includes the stages of decision making: Need recognition, Information search,
Evaluation of alternatives, Purchase activity, Post purchase behavior.
BASIC COMPONENTS
• Actual Purchase (Behavior):
• -this includes the visible physical activity of buying of goods and/or service. It is the
result of the interplay of many individual and environmental determinants which are
invisible.
• Individual determinants and environmental influences: The environmental factors
affect the decision process indirectly, through way of affecting individual determinants.
• Buying roles: Actual Buyer with regards to other users. There are five buying roles,
• 1. Initiator - is the person who identifies that there exists a need or want;
BASIC COMPONENTS
• Buying roles: Actual Buyer with regards to other users. There are five buying roles,
• 2. Influencer - is the one who influences the purchase decision, the actual purchase
activity and/or the use of the product or service
• 3. Decider - is the one who decides whether to buy, what to buy, when to buy, from
where to buy, and how to buy;
• 4. User - is the person (s) who use the product or service
• 5. Buyer - is the one who makes the actual purchase;
BASIC COMPONENTS
• Buying roles: Actual Buyer with regards to other users. There are five
buying roles,
• These five roles may be played by one person or by different persons.
• A person may assume one or more of these roles.
• This would depend on the product or service in question.
 BASIC COMPONENTS
• Example 1: A child goes to a kindergarten school. She comes back home and
asks her parents to buy her a set of color pencils and crayons. The roles played are:
• 1. Initiator: the child in nursery school
• 2. Influencer: a fellow classmate
• 3. Decider: the father or the mother
• 4. Buyer: the father or the mother
• 5. User: the child
BASIC COMPONENTS
• Example 2: The lady of the house is the housewife who spends her day at home doing
household chores & watches TV in her free time. That is her only source of
entertainment. The TV is giving problem. She desires a new TV set, and says that she
wants an LCD plasma TV. The roles played are:
• 1. Initiator: the housewife (mother)
• 2. Influencer: a friend / neighbor
• 3. Decider: the husband or the son
• 4. Buyer: the husband or the son
• 5. User: the family
BASIC COMPONENTS
• Consumer behavior focuses specifically on the Buyer and often User.
• But also analyzes impact of other roles.
BASIC COMPONENTS
• Buyers and Sellers:
• They are the key elements in consumer behavior.
• They have needs and wants and go through a complex buying process, so as to be able to
satisfy the need through purchase of the good or service offering.
• They enter into an exchange process with the seller, which leaves both the parties (buyer
and seller) better off than before.
• In fact, the exchange process is value enhancing in nature, leading to satisfaction of both
the parties.
END OF LECTURE 1
INTRODUCTION TO THE STUDY
OF CONSUMER BEHAVIOR
CONSUMER BEHAVIOR