DEFINITION OF CONSUMER BEHAVIOUR

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

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

WHO IS A CONSUMER

A consumer is one that buys goods for consumption and not for resale or commercial
purpose. The consumer is an individual who pays some amount of money or the thing
required to consume goods and services. As such, consumers play a vital role in the economic
system of a nation. Without consumer demand, producers would lack one of the key
motivations to produce: to sell to consumers. The consumer also forms part of the chain of
distribution.

NATURE OF CONSUMER BEHAVIOUR

1. PROCESS :

Consumer behaviour is a systematic process relating to buying decisions of the customers.

The buying process consists of the following steps;

1. Need identification to buy the product .

2. Information search relating to the product.

3. Listing of alternative brands.

4. Evaluating the alternative (cost-benefit analysis)

5. Purchase decision.

6. Post-purchase evaluation by the marketer.

2. INFLUENCED BY VARIOUS FACTORS :

Consumer behaviour is influenced by a number of factors.

The factors that influence consumers are : marketing, personal, psychological, situational,
social, cultural etc.

3. DIFFERENT FOR ALL CUSTOMERS :

All consumers do not behave in the same manner. Different consumers behave differently.
The difference in consumer behaviour is due to individual factors such as nature of the
consumer’s life style, culture, etc.

4. DIFFERENT FOR DIFFERENT PRODUCTS :

Consumer behaviour is different for different products. There are some consumers who may
buy more quantity of certain items and very low/no quantity of some other items.

5. REGION BOUNDED :

The consumer behaviour varies across states, regions and countries. For instance, the
behaviour of urban consumers is different from that of rural consumers.

Normally, rural consumers are conservative (traditional) in their buying behaviour.

6. VITAL FOR MARKETERS :

Marketers need to have a good knowledge of consumer behaviour. They need to study the
various factors that influence consumer behaviour of their target customers. The knowledge
of consumer behaviour enables marketers to take appropriate marketing decisions.

7. REFLECTS STATUS :
Consumers buying behaviour is not only influenced by status of a consumer, but it
also reflects it. Those consumers who own luxury cars, watches and other items are
considered by others as persons of higher status.
8. SPREAD - EFFECT :

Consumer behaviour has a spread effect.

The buying behaviour of one person may influence the buying behavior of another person.
For instance, a customer may always prefer to buy premium brands of clothing, watches and
other items etc.
This may influence some of his friends, neighbors, colleagues. This is one of the reasons why
marketers use celebrities like Shahrukh Khan , Sachin to endorse their brands.

9. STANDARD OF LIVING :
Consumer buying behaviour may lead to higher standard of living. The more a person buys
the goods and services, the higher is the standard of living.

10. KEEPS ON CHANGING :

The consumer’s behaviour undergoes a change over a period of time depending upon changes
in age, education and income level. Etc, for instance,, kids may prefer colorful dresses, but as
they grow up as teenagers and young adults, they may prefer trendy clothes.

FACTORS AFFECTING CONSUMER BEHAVIOUR

1.Cultural factors

Culture plays a very vital role in the determining consumer behaviour it is sub divided in

 Culture

Culture is a very complex belief of human behaviour it includes the human society, the roles
that the society plays, the behaviour of the society, its values customs and traditions.

 Sub-Culture
Sub-culture is the group of people who share the same values, customs and traditions.

 Social Class

Society possesses social class; in fact every society possesses one. It is important to know
what social class is being targeted as normally the buying behaviour of a social class is quite
similar. Remember not just the income but even other factors describe social class of a group
of consumers.

2. Social Factors

Social factors are also subdivided into the following

 Reference groups

Under social factors reference groups have a great potential of influencing consumer
behaviour. Of course its impact varies across products and brands. This group often includes
an opinion leader.

 Family

The behaviour of a consumer is not only influenced by their motivations and personalities but
also their families and family members who can two or more people living together either
because of blood relationship or marriage.

 Role and status

People who belong to different organizations, groups or club members, families play roles
and have a status to maintain. These roles and status that they have to maintain also
influences consumer behaviour as they decide to spend accordingly.

3. Personal factors

A number of personal factors also influence the consumer behaviour. In fact this is one major
factor that influences consumer behaviour. The sub factors under personal factor are listed
below.

 Age and life cycle stage

Age of a consumer and his life cycle are two most important sub factors under personal
factors. With the age and the life cycle the consumers purchase options and the motive of
purchase changes, with his decisions of buying products change.
  Occupation

Occupation of a consumer is affects the goods and services a consumer buys. The
occupations group has above average interest in buying different products and services
offered by organizations. In fact organizations produce separate products for different
occupational groups.

 Financial or economic situations

Everything can be bought and sold with the help of money. If the economic situation of a
consumer is not good or stable it will affect his purchase power, in fact if the consumers or
the economy of a nation is suffering a loss it defiantly affects the consumers purchase or
spending decisions.

 Life style

People originating from different cultures, sub cultures, occupations and even social class
have different styles of living. Life style can confirm the interest, opinions and activities of
people. Different life styles affect the purchase pattern of consumers.

 Self concept and personality

Every individual is different and have different and distinct personalities. Their distinct
personalities and distinct physiology effects their buying decisions. Hence purchase of
products and services defers from person to person.

4. Psychological factors

4 psychological factors affect consumer behaviour very strongly.

 Motivation

Motivation is activating the internal needs and requirements of the consumer. It can also be
described as goals and needs of the consumers. Motivation arouses and directs the consumers
towards certain goals. These needs can be psychological needs, needs of security, social
needs, esteem needs and also self actualizing needs.

 Perception
Perception is sensing the world and the situations around and then taking a decision
accordingly. Every individual look as the world and the situations differently. The judging
ability and capacity of every individual is different and hence the look at the world
differently. This is what separates the decision taking abilities.

 Learning and experience

Learning is the research of products and services before the consumer takes the decision of
buying a product. Learning and self educating these days is done online and also in groups.
Experience is taking a lesson from the past experiences of a product and service. Learning
and experience both again play an important role in influencing the consumer’s behaviour as
it influences their purchase decision.

 Attitude and beliefs

Attitude is a consumer’s favorable and unfavorable emotional condition or emotional feeling,

also its tendency of reaction to certain actions and behaviours. Beliefs of people that are the
belief that people assume the products to be as make the specifications of the products.
Hence attitude and beliefs are also important and need to be taken into consideration while
studying human behaviour.

Need Recognition

Need recognition occurs when a consumer exactly determines their needs. Consumers may
feel like they are missing out something and needs to address this issue so as to fill in the gap.
When businesses are able to determine when their target market starts developing these needs
or wants, they can avail the ideal opportunity to advertise their brands. An example who buys
water or cold drink identifies their need as thirst.

Information search

The information search stage in the buyer decision process tends to change continually as
consumers require obtaining more and more information about products which can satisfy
their needs. Information can also be obtained through recommendations from people having
previous experiences with products. At this level, consumers tend to consider risk
management and prepare a list of the features of a particular brand.

Evaluation of alternatives
This step involves evaluating different alternatives that are available in the market along with
the product lifecycle. Once it has been determined by the customer what can satisfy their
need, they will start seeking out the best option available. This evaluation can be based upon
different factors like quality, price or any other factor which are important for customers.
They may compare prices or read reviews and then select a product which satisfies their
parameters the most.

Purchase Decision

When all the above stages have been passed, the customer has now finally decided to make a
purchasing decision. At this stage, the consumer has evaluated all facts and has arrived at a
logical conclusion which is either based upon the influence from marketing campaigns or
upon emotional connections or personal experiences or a combination of both.

Post Purchase Evaluation

The purchase of the product is followed by post-purchase evaluation which refers to

analysing as to whether the product was useful for the consumer or not. If the product has
matched the expectations of the customer, they will serve as a brand ambassador who can
influence other potential consumers which will increase the customer base of that particular
brand. The same is true for negative experiences; however, it can halt the journey of potential
customers towards the product.