Consumer Buying Behavior

Introduction
Consumer Buying Behavior: refers to the buying behavior

of final consumers (individuals & households) who buy

goods and services for personal consumption.
Consumer Market: all the individuals and households who

buy or acquire goods and services for personal

consumption.
It is dynamic, complex and multi dimensional process.
The knowledge of consumer needs, wants ,attitude
and beliefs help firms to improvise their marketing
strategies.
Consumer is also defined as the dynamic interaction
of affect and cognition and the environment by which
human beings conduct the interchange aspects of
their life.
Consumer Behavior In Marketing
This can be applied in the following areas:
Analyzing market opportunity:
Consumer behavior study helps in identifying the
unfulfilled needs and wants.
Selecting target market:
The reason to study consumer behavior is to identify the
bases for segmentation.
Marketing mix decision:
Once the unfulfilled needs and wants are identified,
the marketer have to design correct marketing mix
Consumer Behavior In Marketing
Product:
The marketer designs the product or service that would
satisfy unfulfilled needs or wants.
Price:
Marketers must decide what price to charge for the
product.
Promotion:
There are number of marketing communication tools .
Marketers have to decide which tool would be suitable
for reaching out to the consumers.
Consumer Behavior In Marketing
Distribution:
The next decision relates to the distribution channel
that is where and how to offer product/services for sale.
Should company distribute through their existing
outlets.
Technology and consumer behavior
Today with growing use of technology consumers a

have access to large amount of data.

Computer technology have made it possible for firms

to know their customers.

It has become easier for marketers to know track

consumers behavior.
Indian rural consumer of 21st century
The vast hinterland of rural Indian attracts
interesting opportunities for marketers in 21st century
All consumer durable products opted by rural
consumers are categorized into 3 groups:
Necessary products:
Emerging products:
Lifestyle products :
Price sensitive consumer prefer small consumption
packages.
Decision making process
Problem identification/ Need Recognition:
 The buying process starts when buyers identifies a problem or

recognized need.
 Marketers creates stimulus to make a need obvious.

Development of decision criteria:

 In the development of decision criteria, a customer consults

friends, relatives others who he/she perceives to

Decision making process
be expert in the knowledge about the product.
Decision making process
Search for alternatives:
Once decision criteria is developed customer has to

search for a alternatives.

Evaluation of alternatives:
At this stage customer evaluate the alternative brands

and assign weight to each alternatives on basis of

parameter selected.
Decision making process
Decision :
Howard and Seth have given other dimension to

decision making process. They call it theory of evoked

set

Total set->Awareness Set->Consideration set->

Decision set(brand selected)->Purchase set.
Stages of Customer Life Cycle
Prospects :
 These are the customers who have still not purchased the

firm’s product.
 Companies need to address two issues : Awareness and
inducing the customer to make his /her first purchase.
 Companies uses different strategies to convince and

motivate the customer to buy.

 Companies use host of secondary data to identify
prospects.
Stages of Customer Life Cycle
First Time buyer:
Once the prospects decides to buy, the customer enters

the trial stage.

The firm strategy should be to create everlasting

experience for the customer to repeat their purchase.

Repeat buyer:
These are the customers repeating their purchase.
Stages of Customer Life Cycle
Companies need to continuously strengthen the product

by removing any dissatisfaction.

The Challenge is to strengthen direct contact with

customers.
Appreciating the customer is important tool in the
hands of the firm.
Stages of Customer Life Cycle
Core Customers:
 They are the customers who don’t switch their product’s

 Several strategies are used to retain the customers.

 The company’s strategy should be to inform the core customers

first of its new product launches/promotions.

Defectors :
 These are the customers who have already rejected the

company’s product.
Types of Buying Decisions
Types of Buying Decisions
Marketers of high involvement products should

understand information gathering and evaluating

behavior of the high involvement consumer.
Whereas Marketers of low involvement products

should focus more on price and sales promotion

activities to stimulate trail purchase.
Buying situation
Like product buying situation also differs.

Each time a person makes purchase decision it may or

may not be same as previous one

Three types Buying situation

Routinised response behavior/straight rebuy:

consumers are aware about the product therefore
spends little or no time in buying a product.
Buying situation
modified rebuy:

Extensive problem solving / New task.:

This situation requires lot of learning on part of the

consumer
Five main buying roles:
Initiator : The initiator is the person who identifies that

there exists a need or want

Influencer :The influencer is the one who influences the

purchase decision
Decider: The decider is the one who decides whether to

buy, what to buy, when to buy, from where to buy, and

how to buy
Buyer: The buyer is the one who makes the actual

purchase
Five main buying roles:
User: The user is the person (s) who use the product or

service
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
Example 2: The lady of a house who is a housewife and

spends her day at home doing household chores watches TV

in her free time. That is her only source of entertainment.
The TV at home is giving problem. She desires a new TV set,
and says that she wants an LCD plasma TV.
Factors influencing buying behavior
I. Cultural Factor: The marketer need to understand the role
played by the buyers’culture,subculture and social class.

1. Culture:
It consist of values,beliefs,rules,tradition which guides

individual ‘s behavior.
Marketers try to spot cultural shift to discover new

products that might be wanted.

Factors influencing buying behavior
2. Subculture:
It consist of religions and geographic region.

A marketers needs to be aware of different needs for

products and preference for certain brands.

3. Social Class:
In social class the society is divided into a hierarchy of

distinct status classes, so that members of each class have

Factors influencing buying behavior
relatively the same status and members of all other classes
have either more or less status.
There are 3 general categories of social class.

People from different social class tends to have to have

different desire and different consumption pattern.

Factors influencing buying behavior
II. Social factors :
Consumer buying behavior is influenced by social factors
like reference group, family and roles and status
1. Groups :
Reference groups consist of all those groups that have

direct/indirect influence on consumers buying behavior.

Factors influencing buying behavior
Groups that have direct influence and to which person

belongs is called as membership groups.

Person is generally influenced by the group to which they

don’t belong. i.e. aspirational group(a group that a person

hopes to join)
Factors influencing buying behavior
2. Family:
Marketers are interested in the roles and influence of the

husband, wife and children on purchase of different goods

and services.
Family consist of family of orientation and family of

procreation
Children also have a strong influence in family’s buying

decision.
Factors influencing buying behavior
According to marketing experts the children can be

divided into 3 markets:

Children as influencer

Children as primary market

Children as future consumers

Factors influencing buying behavior
3. Roles and status:
A person belongs to many groups.

A person holds various roles and status in these groups.

Role consist of the activities a person is expected to

perform.
People choose products that reflect and communicate

their role and status in society.

Factors influencing buying behavior
III. Personal Factors:
Consumer buying behavior is influenced by Personal

factors like age, family life cycle stage, occupation and

financial status /economic circumstances, personality and
self concept.
1. Age and family life cycle:
People consumes different types of product over a period

of years .
Stages in family life cycle:
Stage I: Bachelorhood: The stage comprises a young

single adult (male/female) living apart from parents

and into a livelihood.
Stage II: New Married Stage: The stage comprises a

newly married couple. One of the spouses may be

working or both may be working. They are financially
better off than they would be in the next stages.
Stages in family life cycle:
Stage III: Parenthood: The stage comprises married

couple with children. Further broken up into three

stages, viz., Full Nest I, Full Nest II and Full Nest III.
Full Nest I: The youngest child in the family is six or

below. Liquidity of cash is low, expenses are high.

Full Nest II: The youngest child in the family is six or

above. If the wife is also working, children are “latchkey

kids.”
Stages in family life cycle:
Full nest III: They are older married couples with

dependent and/or independent children but staying

together at home. They repeat purchase of durables
that were bought in earlier stages.
Stage IV: Post parenthood: This is a stage that occurs

once children have left home. this stage has also been
broken into two stages
Stages in family life cycle:
Empty Nest I: This is a stage that occurs when at least

one of the children has left home. Expenses gradually

reduce, and so there is highest level of savings and
disposable income at hand.
Empty Nest II: In this stage, all the children have left

home, and the couple has retired from occupation.

Stage V: Dissolution: This stage in the FLC occurs

when one of the couple dies, and leaves behind the

other surviving spouse.
Factors influencing buying behavior
2. Occupation and Economic situation :
Persons occupation affects the goods and services bought.

Economic situation or financial status consist of disposable

income, savings and ability to buy any expensive

product/service.
3. Lifestyle:
It is a way or standard of living of a person.
Factors influencing buying behavior
4.Personality and self concept:
Personality refers to set of traits that a person possess.
One researcher identified 5 brand personality traits
Sincerity(down to earth,honest)
Excitement (daring,up to date)
Competence( intelligent,successful)
Sophistication(upper class)
Ruggedness( tough)
Factors influencing buying behavior
Self concept:

It is also known as self image.

A person chooses a brand with brand personality consistent

with self image.

It could be how an individual view herself /himself(actual

self), how an individual would like to view

himself/herself(ideal self concept or how they think others
view them(other self concept)
Goal Fulfillment
DRIVE
Tension
Unfulfilled needs/wants

Appropriate Behavior
Tension Reduction
Needs
Every individual has a need.
2 types of needs.
Physiological/Innate and psychological/Acquired
Needs
Both types of needs affect our buying decision.
Innate needs and acquired needs can be satisfied by
the same product/ services
Motivational conflict
A product or service that a person might buy to satisfy
some needs often comes at the expense of depriving
another need as the person may be short of resources.
These compromises in our ability to satisfy various
needs cause motivational conflicts.
Motivational conflict
There are 3 types of motivational conflicts:
Approach – Approach conflict:
Approach – Avoidance conflict:
Avoidance– Avoidance conflict:
Approach – Approach conflict:
When a consumer has to select between two desirable
alternatives it is termed as
“Approach – Approach conflict”
Approach – Avoidance conflict:
A consumer facing a purchase choice with both
positive and negative consequences confronts this type
of conflict
When a consumer is making a purchase/ consumption
decision a single product in which both positive and
negative aspects are involved.
Avoidance– Avoidance conflict:
This type of conflicts occurs when a consumer is faced
with 2 or more undesirable alternatives.
Factors influencing buying behavior
IV. Psychological factors:

Motivation Theory:

1. Freud Theory :
He assumed the Psychological forces shaping peoples

behavior are largely unconscious and that a person cannot

fully understand his or her own motivation.
Theories of Motivation
2. Maslow's Hierarchy of Needs Theory
It was in 1943 a Psychologist Mr. Abraham
Maslow suggested his Theory of Human Motivation.
Maslow's theory is based on the Hierarchy of Human

Needs. According to Maslow, human behavior is

related to his needs.
Maslow identified five types of needs.
Maslow's Hierarchy of Needs Theory
Based on the needs and the corresponding motives

for purchase and consumption of product/service

offerings, the marketer can identify vital clues for
segmentation and positioning
Maslow's Assumptions in Hierarchy of Needs Theory are:
Man is a wanting being.

Needs have a definite hierarchy of importance.

A satisfied need does not act as a motivator.

Five types of needs
Physiological Needs :
These needs include food, shelter, clothing and other

basic necessities of life.

Unless and until these basic physiological needs are

satisfied to the required extent, other needs do not

motivate an employee.
The management attempts to meet such physiological

needs through fair wages.

Five types of needs
Security / Safety Needs :
These are the needs connected with the psychological

fear of loss of job, property, natural calamities or

hazards, etc.
 An employee wants protection from such types of fear.
Five types of needs
Social Needs :
A human being is rightly treated as a social animal.

 He feels that he should belong to one or the other

group.
He needs friends and interaction with his friends and

superiors of the group such as fellow employees or

superiors
Five types of needs
Esteem Needs :
This category of needs include the need to be respected

by others, need to be appreciated by others, need to

have power and finally prestigious position.
Esteem needs are two fold in nature.

 Internal esteem (self confindence,self respect etc)

 External esteem.(power , status etc)
Five types of needs
 Self-actualization Needs :
Self actualization is the desire to become what one is

capable of becoming.
Here, a person feels that he should accomplish
something in his life.
Therefore Maslow concluded that when one set of needs
is satisfied, it ceases to be a motivating factor.
Thereafter, the next set of needs in the hierarchy order
takes its place.
Theories of Motivation
3. Frederick Herzberg Theory of Human
Motivation:
Frederick Herzberg theory of motivation is also

called 'Two Factor Theory', 'Dual Factor Theory' and

'Hygiene / Maintenance Theory of Motivation'. This
theory is based on the information collected by him
and his associates (in the USA in 1959) about
employees attitude towards work.
 Attitude towards work depends on two sets of factors namely

hygiene or maintenance factors and the motivating factors.

A) Hygiene / Maintenance Factors are :-

 Company's Policies and Administration,
 Supervision,
 Working Conditions,
 Interpersonal Relations with superiors and other subordinates,
 Salary,
 Job Security,
 Status,
 Personal Life, and
 Employee Benefits
Frederick Herzberg found that the presence of these

factors provided no dissatisfaction to the employees.

These are also called as maintenance
factor/dissatisfiers/extrinsic factor.
Extrinisc motivators are external rewards.
B) Motivating Factors are :-Motivating Factors act as
forces of job satisfaction.
 Achievement,
 Recognition for Accomplishment,
 Increased Responsibility,
 Opportunity for Growth and Development, and
 Creative and Challenging Work.

These are also called as satisfiers/intrinsic factors.

Intrinsic motivators are internal rewards.
Factors influencing buying behavior
Perception:
Views/Opinions of a person
Three types of perceptual processes:
Selective attention:
 They have a heightened awareness of stimuli that meet their
needs or interests and minimal awareness of stimuli irrelevant
to their needs.
Selective Distortion:
 It is the tendency to interpret information in a way that fits
our preconceptions.
Selective retention:
 Here we are likely to remember good points about a product
we like and forget good points about competing products.
Learning:

Learning is defined as a relatively permanent change in

the behavior that occurs as a result of experience of self
or others.
Learning involves a change in behavior; in terms of

consumer learning, it implies that a consumer who is

exposed to the marketing stimuli, may react to it through
its purchase and consumption
Learning also leads to development of attitudes. Until and

unless an attempt is made to change this behavior, it

continues.
The change in behavior occurs because of experience,

This experience could be direct (self-experience) or

indirect (experiences of others, and word of mouth).
Consumer learning is specific/intentional/incidental when

it is directed to a specific need and problem solving

Elements of Learning:
Motives:
Consumer motives is the primary objective of marketers
Unfulfilled needs leads to motivation which stimulate
learning.
Cues:
Cues are stimuli that direct motivated behavior.
Elements of Learning:
Response:
 The behavior of a person constitutes the response; i.e.
how a person reacts to a drive or a stimulus, reflects a
response.
Reinforcement:
It is the reward/action - the pleasure, enjoyment and the
benefits that the consumer receives after buying and
using a product or service.
Behavioral theories of learning:
According to this approach, learning within an
individual takes place in response to
events/happenings/stimuli in a person’s external
environment.
The main proponents of this approach were: - Ivan
Pavlov, who conducted the famous experiments on the
dog; His theory came to be known as the Theory of
Classical Conditioning.
Theory of Classical Conditioning.
all living beings are passive in nature; they can be
taught how to behave through repetition or
conditioning; and
 learning occurs as a repeated connection/association
between stimulus and response (Stimulus →
Response) or (S - R).
Theory of Classical Conditioning.
a) Repetition: The repeated pairings of the CS and the
US, led to a strong association between the two, and
this resulted in a similar response, even when the US
was missing; thus, repetition increased the likelihood
of a living entity’s responding to a conditioned
stimulus.
Repetition slows down the pace of forgetting.
Theory of Classical Conditioning.
In terms of marketing, this is the reason why
marketers repeat their messages either in print or in
audio visual media across channels several times a day
However, this also has a demerit, in the sense that too
much of repetition leads to boredom, resulting in fall
of attention and subsequent retention.
Theory of Classical Conditioning.
Marketers go in for variation of their message content
and/or message context in order to avoid boredom.
Two types of variation:
Cosmetic variation: Here, a change is bought about in
the context or the background or the
celebrity/spokesperson or in the font and the print
type.
Theory of Classical Conditioning.
Substantive variation: In substantive variation, the
change is brought about in the content of the
advertisement
b) Stimulus generalization: This is defined as a
phenomenon that occurs when a stimulus is so similar
to another stimulus, that the former evokes the same
response as the latter.
It explains why some competitors products succeed in
the market place.
Theory of Classical Conditioning.
c) Stimulus discrimination:
Stimulus discrimination is the ability to differentiate a
particular stimulus from among similar stimuli.
Marketers always want their product/service offerings
to stand out from the rest.
Operant conditioning theory
B.F. Skinner, who conducted his experiments with rats
and pigeons; His theory came to be known as the
Theory of Operant Conditioning or Instrumental
Conditioning.
operant or instrumental conditioning occurs when
person learns to act out behaviors that are positively
reinforced, and avoids those acts of behavior that lead
to negative reinforcement.
It is based on the principle of trial and error.
In this theory reinforcement plays a very important
task.
Types of Reinforcement according to Skinner:
Positive reinforcement consists of a outcome that
strengthens the likelihood of a response being
repeated.
A negative reinforcement is an outcome that is also
aimed to encourage a specific behavior.
Cognitive Learning Theory:
Cognitive theorists believe that a person’s learning is a

complex mental process.

Cognitive learning focuses on the gathering and

processing of information, storage in memory and

final retrieval of knowledge from a person’s memory.
Sensory memory :The information that is received

from the senses is stored for a very short duration here,

Cognitive Learning Theory:
Short term memory:

Information processing takes place here, and the

input is analyzed and assigned meaning here.

However, information is held in store for a brief period
only
Cognitive Learning Theory:
Long term memory: This is the storage house where

information is retained for relatively longer period of

time.
Associative network:

A person is exposed to information/ knowledge

and/experiences all the time; he interprets these, learns

from them and stores these in his memory for retrieval.
Cognitive Learning Theory:
This addition of knowledge to the memory bank may

alter/modify existing information (this entire bank is

called the Associative Network)
How organizational buyers are different
from household buyers
Geographical concentration:
Compared to individual consumers, organizational
buyers are generally more concentrated in certain
geographic locations.
Fewer but larger buyers.:
The number of organizational buyers is very small
unlike individual consumers who are numerous.
How organizational buyers are different
from household buyers
Derived demand:
 Organizational demand is derived demand because
organization purchases products to be used in
production of goods or services to satisfy consumer’s
demand.
Joint Demand:
There is a joint demand when sale of one product is
dependent on the sale of another product
How organizational buyers are different
from household buyers
Fluctuating demand:
Organizational demand fluctuate widely.
Professional purchasing:
Direct purchasing:
Organizational Buyer decision Process
Problem Recognition:
The first stage of organizational buying decision starts

with recognizing a need or problem.

Problem Recognition can be triggered by internal or

external stimuli.
Organizational Buyer decision Process
General Need Description
In the second stage of the process the quantity of the

product or service is determined.

 Product Specification
In the third stage the manager is required to give the

specifications that are needed in the product.

Organizational Buyer decision Process
Supplier Search
In the fourth stage of the organizational buying process

there is a thorough search for the suppliers in the

market and a list of potential suppliers is made.
 Proposal Solicitation
The proposal that is given by the suppliers are then

taken into consideration and analyzed thoroughly to

select the best suppliers from the pool.
Organizational Buyer decision Process
Supplier Selection
After analyzing the proposals the best supplier who

offers the required product that fulfill all the

specifications that are needed at the lowest price and
best quality in the market is selected.
Organizational Buyer decision Process
 Order Routine Specification
After the best potential supplier is selected the
organization then writes the final order with all the
specification needed and hands over to the supplier.

• Performance Review
In the last step of the organizational buying process the

feedbacks on the supplier’s performance are taken and

then evaluated for further dealings.
THANK YOU