DEPARTMENT OF MANAGEMENT AND

BUSINESS STUDY (2019-2021)

JAMIA HAMDARD

CONSUMER BEHAVIOUR
SUMMARISING THE CONCEPT OF
CONSUMER LEARNING

SUBMITTED BY: - (GROUP-2) SUBMITTED TO: -

DURDANA FACULTY SUPERVISOR
FALAK DR. SHAHNWAZ ABDIN
KRISHNA (ASSISTANT PROFESSO
KULDEEP -R, JAMIA HAMDARD)
MAZZ
 Consumer Learning
Consumer learning is the pursuit of lifelong learning by individuals (read: your customers)
who want to further their knowledge in areas of personal interest and are learning on their
own accord. That means hobbies, nutrition and fitness, sports, fine arts, crafts, career
development, and personal improvement.

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

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

According to Louden and Bitta, ‘consumer behaviour is the decision

process and physical activity, which individuals engage in when evaluating, acquiring, using
or disposing of goods and services’.

Nature of Consumer Behaviour:

1. Influenced by various factors:

The various factors that influence the consumer behavior are as follows:

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

distribution.

b. Personal factors such as age, gender, education and income level.

c. Psychological factors such as buying motives, perception of the product and attitudes

towards the product.

d. Situational factors such as physical surroundings at the time of purchase, social

surroundings and time factor.

e. Social factors such as social status, reference groups and family.

f. Cultural factors, such as religion, social class—caste and sub-castes.

2. Undergoes a constant change:

Consumer behavior is not static. It undergoes a change over a period of time depending on

the nature of products. For example, kids prefer colorful and fancy footwear, but as they grow

up as teenagers and young adults, they prefer trendy footwear, and as middle-aged and senior

citizens they prefer more sober footwear. The change in buying behavior may take place due

to several other factors such as increase in income level, education level and marketing

factors.

3. Varies from consumer to consumer:

All consumers do not behave in the same manner. Different consumers behave differently.

The differences in consumer behavior are due to individual factors such as the nature of the

consumers, lifestyle and culture. For example, some consumers are technoholics. They go on

a shopping and spend beyond their means.

They borrow money from friends, relatives, banks, and at times even adopt unethical means

to spend on shopping of advance technologies. But there are other consumers who, despite

having surplus money, do not go even for the regular purchases and avoid use and purchase

of advance technologies.

4. Varies from region to region and country to county:

The consumer behavior varies across states, regions and countries. For example, the behavior

of the urban consumers is different from that of the rural consumers. A good number of rural

consumers are conservative in their buying behaviors.

The rich rural consumers may think twice to spend on luxuries despite having sufficient

funds, whereas the urban consumers may even take bank loans to buy luxury items such as

cars and household appliances. The consumer behavior may also varies across the states,

regions and countries. It may differ depending on the upbringing, lifestyles and level of

development.

5. Information on consumer behavior is important to the marketers:

Marketers need to have a good knowledge of the consumer behavior. They need to study the

various factors that influence the consumer behavior of their target customers.

The knowledge of consumer behavior enables them to take appropriate marketing

decisions in respect of the following factors:

a. Product design/model

b. Pricing of the product

c. Promotion of the product

d. Packaging

e. Positioning

f. Place of distribution

6. Leads to purchase decision:

A positive consumer behavior leads to a purchase decision. A consumer may take the

decision of buying a product on the basis of different buying motives. The purchase decision

leads to higher demand, and the sales of the marketers increase. Therefore, marketers need to
influence consumer behavior to increase their purchases.

7. Varies from product to product:

Consumer behavior is different for different products. There are some consumers who may

buy more quantity of certain items and very low or no quantity of other items. For example,

teenagers may spend heavily on products such as cell phones and branded wears for snob

appeal, but may not spend on general and academic reading. A middle- aged person may

spend less on clothing, but may invest money in savings, insurance schemes, pension

schemes, and so on.

8. Improves standard of living:

The buying behavior of the consumers may lead to higher standard of living. The more a

person buys the goods and services, the higher is the standard of living. But if a person

spends less on goods and services, despite having a good income, they deprives themselves of

higher standard of living.

9. Reflects status:

The consumer behavior is not only influenced by the status of a consumer, but it also reflects

it. The consumers who own luxury cars, watches and other items are considered belonging to

a higher status. The luxury items also give a sense of pride to the owners.

Scope of Consumer Behaviour: 

 Consumer behavior and marketing management : Effective business managers

realize the importance of marketing to the success of their firm. A sound
understanding of consumer behavior is essential to the long run success of any
marketing program. In fact, it is seen as a comerstone of the Marketing concept, an
important orientation of philosophy of many marketing managers. The essence of the
Marketing concept is captured in three interrelated  orientations consumers needs and
wants, company integrated strategy. 

 Consumer behavior and non profit and social marketing : In today's world even
the non-profit organizations like government agencies, religious sects, universities
and charitable institutions have to market their services for ideas to the "target group
of consumers or institution." At other times these groups are required to appeal to the
general public for support of certain causes or ideas. Also they make their
contribution towards eradication of the problems of the society. Thus a clear
understanding of the consumer behavior and decision making process will assist these
efforts.

 Consumer behavior and government decision making : In recent years the

relevance of consumer behavior principles to government decision making. Two
major areas of activities have been affected: 
i) Government services: It is increasingly and that government provision of public
services can benefit significantly from an understanding of the consumers, or
users, of these services.

ii) Consumer protection: Many Agencies at all levels of government are involved
with regulating business practices for the purpose of protecting consumers
welfare.
  Consumer behaviour and demarketing: It has become increasingly clear that
consumers are entering an era of scarcity in terms of some natural gas and water.
These scarcities have led to promotions stressing conservation rather than
consumption. In other circumstances, consumers have been encouraged to decrease
or stop their use of particular goods believed to have harmful effects. Programs
designed to reduce drug abuse, gambling, and similar types of conception examples.
These actions have been undertaken by government agencies non profit
organisations, and other private groups. The term "demarketing" refers to all such
efforts to encourage consumers to reduce their consumption of a particular product or
services.
 Consumer behaviour and consumer education: Consumer also stands to benefit
directly from orderly investigations of their own behaviour. This can occur on an
individual basis or as part of more formal educational programs. For example, when
consumers learn that a large proportion of the billions spend annually on grocery
products is used for impulse purchases and not spend according to pre planned
shopping list, consumers may be more willing to plan effort to save money. In
general, as marketers that can influence consumers purchases, consumers have the
opportunity to understand better how they affect their own behavior.

Importance of consumer behavior

 Production policies: The study of consumer behavior effects production policies of

enterprise. Consumer behavior discovers the habits, tastes and preferences of
consumers and such discovery enables and enterprise to plan and develop its products
according to these specifications. It is necessary for an enterprise to be in continuous
touch with the changes in consumer behavior so that necessary changes in products
may be made.

 Price policies: The buyer behavior is equally important in having price policies. The
buyers of some products purchase only because particular articles are cheaper than the
competitive articles available in the market.

 Decision regarding channels of distribution: The goods, which are sold and solely
on the basis of low price mast and economical distribution channels. In case of those
articles, which week T.V. sets, refrigerators etc.

 Decision regarding sales promotion: Study of consumer behavior is also vital in

making decisions regarding sales promotion. It enables the producer to know what
motive prompt consumer to make purchase and the same are utilized in promotional
campaigns to awaken desire to purchase.

 Exploiting marketing opportunities: Study of consumer behaviour helps the

marketers to  understand the consumers needs, aspirations, expectations, problems etc.
This knowledge will be useful to the marketers in exploiting marketing opportunities
and meeting the challenges of the market.
 4 Characteristics of the modern consumer.

Consumer behaviour has changed substantially over the past 8 years. Because
a number of technologies have become more mature, companies are getting
new possibilities for fulfilling customer needs. Mobile is undoubtedly the
most important driver here. In the coming years, technologies such as 3D
printing and automating technologies (e.g. robots, AI) will also reach a more
mature phase. In fact, this phase is already dawning. On this basis, I was
reflecting this summer about what consumer expectations are in such a new
world. I came up with 4 characteristics. There are undoubtedly more of them,
or different ones, but these work well for me and for my customers. They are:
personalized services and products, convenience as the new norm, personal
treatment, and a desire to buy from ´awesome´ companies

 Personalized products and services

The ideal segment size today is 1. We are evolving towards a situation where everyone has
his own services and products. One of my favorite examples of this is ´normal´ in New York.
This store makes personalized earphones for you.

What you have to do is very simple: you take 5 photos of your ear and, on the basis of these
pictures, they make customized earphones for you. They are made on site and your package
is adapted by a 3D printer so that your earphones fit into it perfectly. Brilliant and
personalized.

Another extreme example is a company that wants to personalize cosmetics on the basis of
the consumer´s DNA. We are entering into a phase of extreme personalization in which
people not only receive on-demand services (we´ve had that for some time now), but now
will also make products (or have them made) on demand.

 Convenience as the new loyalty

Today it has to be fast, easy and fun for the consumer. You can be for or against companies
like Uber, HelloFresh, Booking.com, Instagram…, but they all have one thing in common:
they’re fast and easy as well as fun to work with. Today, convenience is the basis of loyalty.
If things don´t take place easily enough, they shut down fast.

We’re evolving towards a world of extreme simplicity. Earlier you almost needed an
engineering degree to get a robot to start, today even I can take a vacuum cleaning robot out
of the box and, with a single press of the button, get it working. All new interfaces are
making life steadily easier. Above all companies that weren’t born in the digital world often
have difficulty with this. Their criteria are still too often: it has to be complete and perfect. As
a result it becomes big and complex, and the customer doesn´t like that. Extreme simplicity is
crucial for the modern consumer.

 Personal treatment

Alongside all the digital violence, people also increasingly love sincere human interest and
friendliness. It´s the most interesting paradox of the digital world: the more digital everything
becomes, the more important the human being becomes once again.

It´s the law of scarcity: human contact declines in frequency in the average customer
relationship, and precisely therefore it rises in value. However you can´t buy or program this
element. There´s no app for it. It´s something you have to do. Day after day. 

This is where the genuine human skills come to the surface. Empathy, passion and creativity
are still difficult for a computer. It’s the point where people can make the difference, and
moreover it’s an element to which consumers attach a great deal of importance. 7 in 10
consumers would like to have sincere human contact, even if the digital channels are
functioning perfectly.

 Awesome companies to buy from

The last characteristic is a preference that consumers have for buying from cool companies.
This has always been the case, but today you can feel it just a little bit more. Tesla, Apple,
Google, Coolblue… all of them are companies that the consumer prides himself on buying
from. We like to associate ourselves with awesome companies.

These companies go further than delivering a product. They generally have a vision that, in
their opinion, will change the world. Tesla isn´t a car company, it’s an energy company. Elon
Musk is convinced that the Earth will be destroyed due to poor energy use. And that’s why he
set up Tesla: to solve that problem.
When he recently shared all of Tesla´s patents online with the rest of the world, it was
because he found that things aren´t going fast enough. He wants to save the world from
wasteful energy consumption and he realized he can´t do that on his own. So he shared all hi
is trade secrets. The story of Tesla is virtually the script of a film that we are all watching. As
soon as a company’s story is being followed by consumers, you know you’ve succeeded in
this element.

 Digital and human skills are called for

The first two characteristics, personalized products/services and convenience, are things
where you must rely on digital possibilities. It means being good in data and user interfaces.
In some cases it involves being good in 3D printing and working out new ways to respond as
well as possible to the needs of the modern customer. 

The last two characteristics, the personal touch and being sufficiently attractive to elicit
purchases, calls for typical human skills. To stand out in both these elements, you need
modern PR, modern HR and the right ambitious attitude.

Concepts of consumer learning.

Consumer learning is a process. A process which continually changes and acquires new
knowledge. This knowledge can be obtained from reading, discussing, observing, thinking,
etc. Newly acquired knowledge or personal experience, both serve as feedback There are
various theories which are developed to explain the learning theories. The below are the
major theories related to consumer behavior.

 Classical Conditioning theory refers to learning through repetition. This is referred

to as a spontaneous response to particular situation achieved by repetitive exposure. It
is such a kind of a behavioral theory which says, when a stimulus is connected to or
paired with another stimulus, it serves to produce the same response even when used
alone.

For example, if you usually listen news at 9 pm and have dinner too at 9 pm while watching
the news then eventually the sound of news at 9pm may make you hungry even though you
are not actually hungry or even if the dinner is not ready.
  Behavioral Learning Theories:

Learning behaviour theories depend upon response tendencies resulting from experience. If
someone is conditioned by a particular experience, he behaves in a similar fashion again and again
For instance, if workers in a factory are conditioned to loud noise; they start liking high pitch music.

If people in villages are served milk with large quantity of sugar repeatedly they become accustomed
to it and they afterwards do not like milk with less sugar. If one drinks particular brand of coffee
repeatedly, he does not enjoy other brand of coffee. This is called behavioural learning.

The marketer studies these phenomena and uses them in sales campaign, advertising strategy,
product development, demonstration of product, free samples and serving product free. In order to
take advantage of behavioural theories Nescafe Coffee serves free coffee from time to time to
develop taste for it.

Marketers stimulate consumers in various ways to take advantage of their behavioural psychology
by repeating advertisements. But psychologies also came to the conclusion that learning depends
not merely on repetition but also ability to generalization. Because of stimulus generalization people
also buy products which look alike and therefore competitors produce similar products.

Stimulus generation also help promote sales of other products under same brand name. If one be-
comes accustomed to one product of one brand when other products are introduced with same
brand name they also attract same attention as the first product.

The classical conditioning or Pavlarian conditioning is a dumb sort of learning. However, modem
view of classical conditioning is somewhat different. It is now believed that individuals do not behave
in a purely identical manner i.e. they are not purely passive in their behaviour and conditioning can
be changed after a number of trials of a product.

For instance, if one consumer is habituated to use ‘X’ tea by trials he can be persuaded to use
another tea. The theory has under gone revolutionary change during last 20 years, now researchers
are convinced that the behaviour and conditioning behaviour and cognitive one. It’s felt that
consumers are not passive and they use rational even when they are accustomed to use a particular
brand or a product.

 Cognitive Learning Theory:

This theory “holds that learning involves complex mental processing of information. This theory
gives great weightage to information, motivation and mental process on which response depends.
According to this theory repetition gets a back seat. The consumer collects information on various
competitive products with regard to their price, performance and other aspects.

The consumer feeds that the collected information on various competitive products with regard to
their price, performance and other aspects of information into his human computer, process them
logically and then only arrives at a conclusion.

If one decides to buy a refrigerator he collects the information on various refrigerators available in
the market, their features, performance, reputation of the supplier i.e. brand and after sales service.
The information however is not collected only when one decides to buy a product; he goes on
getting information from various sources such as, magazines and journals and retains in his memory
and uses it when required.

It is felt by some psychologists that when one gets too much information he is overloaded and
encounters difficulties in decision taken. But capacity to retain and keep the information in memory
differs from individual to individual depending largely on his education and sophistication.

Therefore, marketers try to provide information to different groups of people as per their retention
power as perceived by marketer. For instance, if the consumer is technocrat, he will be supplied
much more information as compared a general customer specially in case of technical products like
computer, automobile, photo copier, electronic and electrical goods. If someone is provided more
information than what he can understand or retain it will be waste of efforts and resources .

 Involvement Theory:
According to this theory the left and right side of the brain act differently. It is of the view
that the brain is primarily responsible for cognitive activities reading, speaking and
attribution information is processed in this part of the brain.
This part of the brain also forms images According to this theory right part of the brain
processes non-verbal, timeless pictorial and holistic information according to Flemming
Hassen.
The believer of this theory state that brain acts in spilt manner. However, whether
information is processed in right or left side of the brain seems of little consequence for the
marketer. What is relevant to note is that what is the level of involvement of consumer in
products and their purchase and how it can be influenced.

 Social Judgment Theory:

There is another cognitive theory, called Judgment Theory. The central point of the theory is
that individuals processing of information about an issue are determined by ones involvement
with the issue.
According to this theory consumers who are involved has a strong positive or negative
opinion about a product or service based on information processing and experience. It
requires lot of efforts to change their judgement.

Marketing Strategies:

Marketing strategies require proper study and use of consumers perceptions and learning and
divides it into various segments so that different consumers may be approached differently to influ-
ence them and make for them effective promotional programmes for different segments of
consumers. They have to be conditioned and approached differently according to information
processing level.
 If we have to promote a particular brand of ice-cream or chocolate different consumers have
to be approached according to their perception. Those who do not consume ice-cream at all will
have to be tackled differently than those who are consuming some other brand of ice-cream. Those
who do not consume ice-cream have to be conditioned to its use first not only by advertisement but
by free trial.

Those who are consuming some other brand may be attracted by price, flavour, taste or
concessional trial. If for instance ice-cream market share of X is more than Y, then Y will have to find-
out why X has higher share and accordingly formulate marketing strategies.

The mark
eting strategy can also be region-wise in case of items which are more popular in certain parts of the
country but not so much demanded in other parts. The marketer will have to study the psychology
of consumers and will have to concentrate efforts in areas where it is not demanded or less
demanded by conveying them information of the product.

The differences in consumption level can also be due to differences in level of income or using some
alternative product. For instance, ladies in India often use herbs for cleansing their hairs rather than
shampoo. Other set is which cannot buy big expensive shampoo packs.

They may be induced to try by supplying them free samples and / or small cheap pouch in Re. 1 or
Rs. 2 packs to be used ones or twice. When this method has been used sales of shampoos have
increased substantially and many more customers have been attracted. Same strategy has worked
for many other consumer products like pan masala.

Market segmentation also becomes necessary based on different perceptions of consumers. Some
consumers believe that expensive products have better quality than similar cheaper product. They
go by price rather than performance. Therefore to cater them expensive cars, fabrics are marketed.
There is another group who feels that they must show of their wealth by owning expensive
automobiles, jewellery, furniture and houses. This group is segmented so that their egos may be
satisfied.

There is another group of consumers who prefer utility and for them cheaper products are
produced and utility angle is emphasized in ads and other sales promotion schemes. Thus
markets have to be segmented on various factors like psychology of consumers, income level,
regional factors and so on even for the same product with same price different consumer
groups are approached differently.

Practical examples based on consumer learning.

Nowadays, many brands use theories of how consumers learn to develop and communicate
their advertisements. These are a few examples of brands that use different learning theories
to transmit knowledge about their product and influence consumer behavior.

 STARBUCKS

Starbucks is a brand that considerably applies the behavioral learning theories in marketing
its products. Here are starbucks marketing applications of classical and operant conditioning
theories.
Behavioral Learning Theory-Classical conditioning:
Starbucks is one of the most successful brands. Its strong brand reputation also becomes the
ultimate competitive advantage in the highly competitive coffee and tea market. Starbucks
provides its customers an extraordinary range of experience, such as tasty drink tailor-made
just for you, store atmosphere, and nice conversation with Starbucks associates. As a result,
customers emotionally connect with the brand because it repeatedly provides something that
the customers want.
This would be a good example of classical conditioning that a good experience is consistently
paired with condition stimulus which brand names. When customers see Starbucks logo, they
are confident that they will definitely gain another good experience and prefer buying
Starbucks product to other brands. To our minds, it would be more attractive if Starbucks
engage customers experience or unconditional stimuli, with other conditional stimuli in
addition to visual logo. For example, it may use a jingle ,a tagline, or a pattern of
conversation by its associates. This will remind customers, even new customers, of Starbucks
when hearing these stimuli.
Behavioral Learning Theory- Operant Conditioning:
Starbucks also implements operant conditioning(instrumental conditioning) to promotional
program ,My Starbucks Reward, offered to customers. My Starbucks Rewards is the loyalty
program that provide its customers exclusive rewards, which are definitely positive
reinforcement according to the theory.
Customers can enjoy the rewards, including free drinks, exclusive early access to Starbucks
newest products, and quick and easy payment with Starbucks mobile app, when purchase
coffee and join the program. These rewards provide the positive experience and strengthen
the consumer behavior. Therefore, customers are more likely to keep buying Starbucks
products and become loyalty customers. Moreover, Starbucks uses fixed-ratio reinforcement
to increase the frequency of buying its products.
When customers buy products, ranging from coffee, pastry, or tumbler, at a store, they will
earn a star. These stars add up to earn exclusive Starbucks reward. If customers collect 12
stars, they can enjoy free drink. The more stars they collect, the more rewards they earn.
Once they reach the certain number of Stars, they will become gold membership level and
enjoy more exclusive benefits such as New Year Gifts.
Using this gamification, customers can be motivated to continue buying Starbucks product
over and over again.(Please be noted that the amount of money to collect a star and the
number of stars to get rewards are varied in different countries.)

BLACK AND DECKER

Cognitive Learning Theory-Observational Learning
This advertisement depicts a couple watching TV and a dog with white hair playing around
with a toy. After , the toy goes under the sofa and the dog goes to get it. Then, the dog comes
out with black hair since there was a lot of dirt under the sofa. Thus, the wife goes to get a
vacuum cleaner that blends and can even get spots under the sofa. Therefore we can say that
the advertisement is an example of cognitive learning theory. Because the “theory stresses the
importance of an internal mental process, views people as problem- solvers who actively use
information from around them to master their environment”.
We can additionally say that is observational learning theory because people watching the ad
can store information that this product can solve the problem of reaching dirt under the sofa.
When they in fact encounter this problem, they accumulated this knowledge, thus can use this
information at a later point.
Thus, the consumer needs to go through different phases. In this case, the consumer focuses
on how the wife cleaned the dirt under the sofa that is far to reach, the consumer retains the
behavior of the wife in memory after the consumer goes through production process were
she or he has the ability to perform the behavior, consequently a situation can arise where the
behavior is useful to consumer thus motivating he or she, and finally, the consumer can get
the vacuum and clean dirt that is difficult to reach-observational learning.
DOSENBACH
Behavioral learning theory- Classical conditioning
We can use the behavioral theory to explain this commercial and specially the classic
conditioning. In fact as in the example of roger federer, in this commercial the well known
singer ellie goulding, who represents the celebrity endorsement, is associated with the brand
dosenbach. According to the theory and the experiment of Pavlov, the singer can be
compared to the “food” (unconditioned stimulus) that can cause in the positive feeling
(unconditioned response). In fact she is beautiful famous and a good singer. Moreover the
song in the commercial has a nice beat.
In this case the brand Dosenbach is compared to the bell (conditioned stimulus). The
conditioned stimulus does not elicit any particular response in the consumer on its own. The
marketers wanted to ink he brand with the singer so that this association can create a
conditioned response. That means that after a number of exposure with the commercial, the
consumers will generate a similar positive response for the brand as they had at the beginning
while listening and looking at the singer.
Cognitive Learning Theory- Observational learning
Another theory that were discussing in the group to analyze the commercial is the
observational learning theory under the cognitive theories. According to this theory the
consumers while seeing the famous singer in the commercial wearing the Dosenbach shoes
are inclined to intimate this behavior, as it is followed by reinforcement from others. In fact
the singer is worldwide known and liked.
Consumers will unconsciously think that by undertaking a modeling process or an imitation
process and thus buying the shoes Dosenbach they will receive reinforcement from others
like Ellie Goulding had.
In conclusion consumer behavior is shaped by experiences you have gone
through learning. So it is important for marketers to understand how consumers learn
knowledge because of behaviors or cognitive learning processes. Thus, marketers condition
consumer by use both theories. By using any of the theories described, the marketer can make
it easier for consumer to recognize or recall the product.