Unit 1

An Introduction to Consumer Behavior

Consumer Behavior 1


Who are the consumers????
Who is the customer????
Consumer Behavior 2
Who is a Consumer/Customer?
A customer is the one who actually purchases a
product or service from the particular organisation or
shop
Consumer is wider concept consisting of not only the
buyer or customer but also all its users, i.e.
consumers. There are two situations when the
distinction between consumer and customer may
occur
when the service or product is provided free, and
when the customer is not the actual user of the
product or is only one of the many users.

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The two vital elements to remember in
all consumer situations are:
the influence on purchase from other
people and
the roles taken on by different people
in consumer behaviour situations.

Consumer Behavior 4
Some Consumer behavior role
Consumer Behavior 5

Consumer Behavior
Consumer Behavior 6
The behavior that consumers display in searching for,
purchasing, using, evaluating and disposing of products
and services that they expect will satisfy their needs.
-LEON G SCHIFFMAN

Personal Consumer buys goods and services for personal,
household, or for the use of a family member, or for a friend.
Organizational Customer: a business, government agency, or
other institution (profit or nonprofit) that buys the goods,
services, and/or equipment necessary for its function.

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Consumer Behavior may be defined as the interplay of
forces that takes place during a consumption process,
within a consumers self and his environment.
this interaction takes place between three elements
viz. knowledge, affect and behavior
it continues through pre-purchase activity to the post
purchase experience
it includes the stages of evaluating, acquiring, using
and disposing of goods and services.
Cognition-knowledge, information processing and
thinking part
Affect- the feelings part
Behavior-the visible part i.e. purchase activity




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Scope of Consumer Behavior
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
Consumer Behavior 9

Consumer Behavior 10
Development of Marketing Concept
Production Concept
Philosophy if the goods/services are cheap and they can
be made available at many places, there cannot be any
problem regarding sale.
Focus was to produce more not on market
The basic assumptions were:
It is the consumer who look good product at the low price
The consumer knows the prices of the competitive products
and compare them in terms of quality and price
The consumer does not care about the difference among the
rival product, except in the case of price
Main aim of the organisation is to improve efficiency of the
production and distribution while keeping the prices down,
hence keep the customer





Consumer Behavior 11
Product Concept
If the quality of goods or services is of good standard,
the customers can be easily attracted.
Direct their activities towards improving the quality of
the product
Do not consider whether consumer want that feature
or not
Results marketing myopia i.e. too much focus on the
product rather than consumers
Consumer Behavior 12
Selling Concept
Emphasis on selling and promotional activities
Consumers needs to be persuaded to sell the product
Gives emphasis to firms interest of selling what is
available
Assumptions are;
Customer normally tend to hold comparisons when
buying things they do not urgently need
Through persuasion the consumer can buy more
Organisation must have strong sales department

Consumer Behavior 13
Marketing Concept
Success can be achieved only through consumer
satisfaction
Needs and wants of the specific target market should
be determined and deliver the desired satisfaction
they do not sell what they can make but they make
what they can sell
Concept of consumer research

Consumer Behavior 14
Societal Marketing Concept
Managerial orientation that considers the essential
activity of the organisation to be:
The determination of the needs and wants of the target
markets
Achievement of the satisfaction more efficiently and
effectively and in the way that preserves or strengthens
integration between the consumer and society
Public interest should be considered apart from
achieving consumer satisfaction

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Discipline of consumer behavior
Psychology
The study of the individual, which includes motivation,
perception, attitudes, personality and learning theories.
All these factors are critical to an understanding of
consumer behaviour and help us to comprehend
consumption related needs of individuals, their actions
and responses to different promotional messages and
products and the way their experiences and personality
characteristics influence product choices.
Consumer Behavior 16
Sociology
The study of groups
When individuals form groups, their actions are sometimes
quite different from the actions of those very individuals
when they are operating alone.
The influences of group memberships, family and social class
Social psychology
combination of sociology and psychology
studies how an individual operates in a group.
it also studies how those whose opinions they respect such as
peers, reference groups, their families and opinion leaders
influence individuals in their consumption behaviour.
Consumer Behavior 17
Cultural anthropology
the study of human beings in society.
explores the development of core beliefs, values and
customs that individuals inherit from their parents
and grandparents, which influence their purchase and
consumption behaviour
also studies sub-cultures and helps compare
consumers of different nationalities and cultures
Economics
study of how consumers spend their funds, how they
evaluate alternatives and how they make decisions to
get maximum satisfaction from their purchases.
Consumer Behavior 18
Customer Value, Satisfaction and
Retention
Consumer Behavior 19
Customer Value
Ratio between the consumers perceived benefits(
economical, functional and psychological) and the
resources ( monetary, time effort, psychological) used
to obtain those benefits.
Value of the product or services should be perceived as
qualitative and worthy for the better positioning of the
product in the consumer mind
Consumer Behavior 20
Ensuring customer Satisfaction
Individuals consumer perception of the performance of the
product or services in relation to his or her expectation.
Consumer differ in terms of expectation
Consumer satisfaction depends upon consumer expectation
Consumer satisfaction positive and negative
Loyalist- purchase regularly
Apostle- provide positive word of mouth
Negative are- defectors who stop doing business with the company
Consumer terrorists spread negative word of mouth
Hostage- remain with the company due to monopoly market
Mercenaries- no loyalty and may switch the product for price or
satisfaction
Customer Trust should be obtained

Consumer Behavior 21
Securing customer retention
Customer retention can be done if consumers are
satisfied and if they trust the product and services
Retaining customer is less costly than making new ones
Retained customers:
Are less price sensitive and pay less attention to
competitor's advertising
Buy more product
Servicing existing customer is cheaper
Spread positive word of mouth
Marketing add focus should be on the basis of consumer
interaction and the profit obtained from them
Consumer Behavior 22

Consumer Behavior 23
Impact of New Technology on Marketing
Strategies
Consumers have more power than ever before
Consumers have more access to information than ever
before
Marketers can and must offer more services and
products than ever before
Increasing instantaneous exchanges between marketer
and consumers
Marketer can gather more information about
consumers more quickly and easily

Consumer Behavior 24
Consumer Behavior and Decision Making

Consumer Behavior 25
Consumer Behavior 26
Marketing ethics and social
responsibility( Assignment)
Definition of ethics and marketing ethics
Classifying marketing decisions according to
ethical and legal relationships
Definition of Social Responsibility
Concepts of social responsibility

Consumer Behavior 27
The Dark Side of Consumer Behavior
Consumer Terrorism:
Despite of the best efforts of govt. regulators, concerned
industry people, sometimes consumers worst enemies
are themselves, e.g. crowd of people for getting some
items during shortages (fuel supply, fertilizer supply etc.
who may harm each others).
Addictive Consumption:
Consumer addiction:
A physiological and/or psychological dependency on products
or services
Compulsive Consumption:
Repetitive shopping as an antidote to tension, anxiety,
depression, or boredom (e.g. gambling, betting in sport
events)
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The Dark Side of Consumer Behavior
Consumed Consumer
People who are used of exploited, willingly or not, for
commercial gain in the marketplace.
Prostitutes
Organ, blood, and hair donors
Babies for sale

Illegal Activities
Many consumer behaviors are not only self-destructive
or socially damaging but they are illegal too.
It is as described by the law of land of particular country.
Consumer Theft and Fraud
Consumer Behavior 29