Everything you need to know about what is consumer behaviour. Consumer Behaviour deals with the various stages, a consumer goes through, before purchasing products or services for his end use.
Consumer Behaviour can also be viewed as the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.
It attempts to understand the decision-making processes of buyers, both individually and in groups such as how emotions affect buying behaviour.
Consumer behaviour is the study of individuals, groups, or organizations and the processes they use to select, secure, and dispose of products, services, experiences, or ideas to satisfy needs. The impact, these processes have on the consumer and society is a significant aspect of consumer behaviour.
1. Introduction to Consumer Behaviour 2. Meaning of Consumer Behaviour 3. Definition 4. Scope 5. Nature 6. Importance 7. Types 8. Factors Influencing
9. Theories 10. Models 11. Rules for Building Relationships with Consumers 12. Buying Motives 13. Need of Study 14. Various Risk 15. Various Reasons.
What is Consumer Behaviour: Definitions, Importance, Factors Influencing, Models, Need, Buying Motives and Various Risks and PPT
- Introduction to Consumer Behaviour
- Meaning of Consumer Behaviour
- Definition of Consumer Behaviour
- Scope of Consumer Behaviour
- Nature of Consumer Behaviour
- Role of Consumer Behaviour
- Types of Consumer Buying Behaviour
- Factors Influencing Consumer Behaviour
- Theories of Consumer Behaviour
- Models of Consumer Behaviour
- Rules for Building Relationships with Consumers
- Important Buying Motives of Consumer Behaviour
- Reasons and Facts for Studying Consumer Behaviour
- Various Risks Involved in Buying
- Major Reasons for Buying Products/Services
What is Consumer Behaviour – Introduction
Consumer behaviour refers to the buying behaviour of the ultimate or end consumer. The behaviour of human beings as consumers is complex. Marketers’ understanding of the drivers of consumers’ buying behaviour will help them to serve their customers effectively and efficiently, and attract new ones.
Consumers’ shopping behaviour can be understood by analysing the factors that affect the exercise. These factors could be demographic, psychological, environmental, or related to the lifestyle of the customer. It is equally important for the retailer to identify the various stages in the consumer decision-making process and the major influences at each stage.
This would make possible an effective retail marketing strategy. Take for instance, the case of retailers Saravana Stores and Shoppers Stop in Chennai. Both of them are regarded as success stories in their own right. Even though they both deal in broadly the same kind of product categories, the images of the two stores and the clientele they target are greatly influenced by their understanding of the tastes and psyche of their buyers.
Shoppers Stop’s outlets are air-conditioned, well maintained, and have inviting store displays. Their advertising campaign is considered to be one of the best in the industry and the staff is well dressed and articulate. They have good loyalty programmes, and their service is reasonably quick and efficient.
They have spacious, pleasant cafes with a variety of different snacks and beverages from leading brands. On the other hand, Saravana Stores has a lower middle-class clientele and does not pay much attention to the ambience. The exterior of the outlet wears an old look. Goods are piled on the top of one another (sofas, plastic chairs), or displayed all along the wall (garments, textiles).
Signboards within the stores have slightly peremptory notes such as ‘Trials not allowed’, or ‘Pay money at the counter only’. The staff in uniform is neither immaculate, nor are they expected to be over courteous towards customers. Billing and delivery can take almost 20-25 minutes. The eatery has no tables and chairs. It has about eight items on its menu, including coffee, tea, and cold drinks.
Saravana in Chennai basically targets daily wage earners or government employees, many of whom have roots in villages or small towns and for whom the environment in and around Shoppers Stop is rather intimidating. The tremendous depth and range of merchandise at Saravana Stores suits all pockets and tastes.
The indifferent service atmosphere suits the customers very well. It also means that no one will interfere while they inspect the displayed goods at length. The eating joint has no infrastructure; customers at Saravana sit with the rest of the family on dhurries on the floor—just like at home.
The anchor no doubt is price, which even attracts people from the middle class. A 20-30 per cent saving is attractive by any standards. For the first time in 2013, Saravana Stores attempted to woo the upmarket customers by launching Saravana Elite, a jewellery store in the busy T Nagar area of Chennai, not far from where many of its extremely crowded older stores stand.
Elite stands for everything the older stores don’t, including an uncluttered ambience. It has well- designed interiors, parking for customers, and even imported jewellery to attract young buyers.
The retail marketing mix of Saravana Stores and Shoppers Stop is focused on different sections of the market. However, both indicate the primary goal required for successful retailing—the satisfaction of target consumers. In order to achieve this task, retailers are required to have a better understanding of consumer benefits, their perception and attitudes, and how these aspects of their behaviour influence the development of successful retail marketing strategies.
What is Consumer Behaviour – Meaning
Consumer behaviour is the study of how, where, when, and why people buy, use and get rid of products or services. It refers to the multi-step, decision-making process in which buyers engage and the actions they take to satisfy their needs and wants in the marketplace.
However, there is no single standard of behaviour. Individual consumers behave differently based on psychological factors like motivation, and also due to environmental and situational forces.
Consumer Behaviour can also be viewed as the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. It attempts to understand the decision-making processes of buyers, both individually and in groups such as how emotions affect buying behaviour.
It studies characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people’s wants. It also tries to assess influences on the consumer from groups such as family, friends, sports, reference groups, and society in general.
Consumer Behaviour deals with the various stages, a consumer goes through, before purchasing products or services for his end use.
Consumer behaviour is the study of individuals, groups, or organizations and the processes they use to select, secure, and dispose of products, services, experiences, or ideas to satisfy needs. The impact, these processes have on the consumer and society is a significant aspect of consumer behaviour.
It attempts to understand the decision-making processes of buyers, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people’s wants. It also tries to assess influences on the consumer, which are usually exerted from groups such as family, friends, reference groups, and society in general.
In short, Consumer Behaviour is a branch which deals with the various stages a consumer goes through before purchasing products or services for his end use.
Buying Behaviour is the decision processes and acts of people involved in buying and using products.
To understand this, it is important to seek answers to following questions:
i. Why consumers make certain defined purchases?
ii. Which factors influence consumer purchases?
iii. What are the changing factors in our society?
Consumer Buying Behaviour refers to the buying behaviour of the ultimate consumer.
A firm needs to analyze buying behaviour for the followings:
i. Buyer’s reactions, to a firms marketing strategy have a great impact on the firm’s success.
ii. The marketing concept stresses that a firm should create a Marketing Mix, that gives utility to customers, therefore, there is a need to analyze the what, where, when and how consumers buy.
iii. Marketers can predict how consumers will respond to marketing strategies more effectively.
What is Consumer Behaviour – Definitions Provided by Eminent Authors: Hawkins, Mothersbaugh, Ostrow, Smith, Kanuk, Theodore Levitt and Belch
The behaviour pattern of a consumer is termed as consumer behaviour.
Consumer behaviour can be now understood with the help of following definitions:
Consumer behaviour can be defined as the study of consumers and the processes they use to choose, use (consume), and dispose of products, and services.
According to Hawkins and Mothersbaugh consumer behaviour is nothing but “All marketing decisions are based on assumptions and knowledge of consumer behaviour and Researching consumer behaviour is a complex process, but understanding consumer behaviour is critical to marketers-they can use it to”.
Ostrow & smith have defined consumer behaviour as “actions of consumers in the marketplace and the underlying motives for those actions. It includes the study of what they buy, where they buy, how often they buy, and how often they use it”.
According to Kanuk consumer behaviour is “something that starts before actual buying and goes even after purchase of the product. The goal of studying consumer behaviour is to satisfy their needs, the focus being on decision process which is how best to use resources, time, money and effort”.
Theodore levitt states that “the fact of buying changes the dynamics of relationships. A healthy relationship requires conscious and constant fight. One of the surest sign of a bad relationship is the absence of complaints. The customer is either not being candid or not being contacted”.
In a layman’s language consumer behaviour deals with the buying behaviour of individuals.
The main catalyst which triggers the buying decision of an individual is need for a particular product/service. Consumers purchase products and services as and when need arises.
According to Belch and Belch, whenever need arises; a consumer searches for several information which would help him in his purchase.
Consumer behaviour is all about understanding how people choose to spend their money and time in buying and consuming various goods and services that they desire.
In the retail context, marketers would specifically be more interested to gain an insight into the consumers’ shopping behaviour, which involves an understanding of decision variables regarding when, where, and what to shop (shopping timing, choice of retail format, and store, etc.). Such decision variables are the factors that should be considered by retailers while framing their business strategies.
For instance, in the case of pickle, marketers will be interested in finding out the type of pickle that consumers tend to buy (single vegetable/fruit or mixed, spicy or not, oily or dry, vegetarian or non-vegetarian); the brand preference (national, private, generic); the reason for using (to add to taste, in food preparation, to eat along with snacks); the place of purchase (super bazaar, convenience store, vendors, home-made); and frequency of purchase (weekly, biweekly, monthly). On the basis of various options to satisfy consumer needs, marketers evolve the best possible marketing mix to attract their target market.
Therefore, shoppers’ response to retail marketing mix has a great impact on the firms’ success in the long run. As described by Cohen and Areni (1991), the retailers’ marketing mix inputs comprise the four Ps—price, place, promotion, and product—which are adapted and focused upon the consumer. Individual consumers consider each element of retail marketing mix in relation to their culture, attitude, previous learning, and personal perception.
Many a time consumers’ patronize more than one retail outlet for the same product. The consumer is influenced by both the intrinsic and extrinsic factors. Intrinsically, their needs, motives, perceptions, and attitudes tend to influence what they purchase and from where.
However, extrinsic influences such as family, social class, the culture, and economic factors also affect their behaviour. With an understanding of these elements retailers or marketers would be well placed to devise their own retail marketing mix in accordance with their respective target segments.
What is Consumer Behaviour – Scope: Determining Order of Preference, Identification of Alternatives, Pre-Purchase Information, Evaluation of Alternatives and a Few Others
1. Determining Order of Preference:
A consumer has several unsatisfied needs but cannot satisfy all of them due to his limited resources. As such, he has to decide the order of preference in satisfying his unsatisfied needs.
2. Identification of Alternatives:
Having determined order of preference he has to identify alternatives available to satisfy the particular need. Here he considers size, brand, uses and price etc. regarding different alternatives.
3. Pre-Purchase Information:
Now the consumer tries to gather information about the product from various sources. The sources are – Personal (family friends, neighbours), Commercial (ads, salesmen, dealers), and Public (mass media, consumer-rating agencies).
4. Evaluation of Alternatives:
Next step of buying process is to evaluate merits/demerits of possible, available alternatives and choose the best alternative.
5. Purchase Decision:
Next step is the consumer proceeding to buy it.
What is Consumer Behaviour – Nature: Different for Different Product, Influenced by Various Factors, Different for Different Customers and a Few Others
The nature of consumer behaviour can be described in form of following points:
1. Different for Different Products:
Behaviour of consumers for different products is different. While some consumers buy more of one commodity and very low/no quantity of some other goods, another set of consumers may act entirely differently.
2. Influenced by Various Factors:
Consumer behaviour is influenced by a number of factors. The factors that influenced consumer comprise, marketing, personal, psychological, situational, social, cultural etc.
3. Different for Different Customers:
All consumers do not behave in the same manner. Different consumers behave differently. The difference in consumer behaviour is because of individual factors such as nature of the consumer’s life style, culture, etc.
4. Systematic Process:
Consumer behaviour is a systematic process linking with buying decisions of the customers.
The buying process includes the following steps:
(i) Need identification to buy the product.
(ii) Information search relating to the product.
(iii) Listing and Evaluating the alternative (cost-benefit analysis).
(iv) Purchase decision.
(v) Post-purchase evaluation by the marketer.
5. Varies Across Regions:
The consumer behaviour vary 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. Crucial for Marketers:
Marketers should have about consumer behaviour. They require 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. Brand Loyalty:
Brand loyalty is the tendency of a consumer to buy products or services from a certain company that one likes or equates with having high quality goods and services.
8. Results in Spread-Effect:
Consumer behaviour has a spread effect. The buying behaviour of one person may effects the buying behaviour 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, neighbours, colleagues. This is one of the reasons why marketers use celebrities to endorse their brands.
9. Higher 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.
Consumer behaviour is not rigid or static. It keeps on changing over a period of time, due to various factors such as change in age, education, income level, fashion, trends, climate etc., e.g., kids may prefer colourful dresses, but as they grow up as teenagers and young adults, they may prefer trendy clothes.
11. Information Search:
Consumers cannot buy goods and services in case they are unaware that a good or service exists. When a consumer decides to get a certain item, his decision must be based on the information he has gathered about what products or services are available to fulfil his needs. There might be a product available that would be better suited to the consumer’s needs, but if he is unaware of the product, he will not buy it.
12. Reflects Status:
Consumers buying behaviour is not only dominated 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.
What is Consumer Behaviour – 4 Main Types: Programmed Behaviour, Limited Decision Making, Extensive Decision Making and Impulse Buying
The four type of consumer buying behaviour are:
Type # 1. Routine Response/Programmed Behaviour:
It relates to buying low involvement, frequently purchased low cost items requires very little search and decision effort such decisions are instantaneously made and purchased almost automatically. Examples include soft drinks, snack foods, milk, grocery items etc., although, these days even in case of Bread, there are far too many options available and at times, it does take some thinking before buying.
Type # 2. Limited Decision Making:
Under this type of buying behaviour it involves buying products occasionally. When the consumer needs to obtain information about unfamiliar brand in a familiar product category, it requires a moderate amount of time for information gathering. For example when garments are to be purchased which is non-branded, consumer tries to obtain information from whatever source is available.
Type # 3. Extensive Decision Making/Complex High Involvement:
This involves purchase of unfamiliar, expensive and infrequently products. As huge finance is involved the decision bears High degree of economic, performance and psychological risk. For Examples, in case of cars, homes, computers, education etc., the consumer likes to deliberate a lot before actually buying the product.
Type # 4. Impulse Buying:
On several occasions, the consumers make purchases on the spur of the moment, when no conscious planning is usually involved. To cite an example, mostly we do impulsive buying when we are out on pleasure trips, or are visiting the trade fair etc. in fact when we are helping friends or family to do shopping; we end up buying products for ourselves, which we may not have required.
What is Consumer Behaviour – 2 Most Important Factors: Internal and External Factors
The factors that influence Consumer Behavior can be divided into internal Factors and External Factors.
These are factors that reside within the individual, in other words it is the result of a person’s behavior or thinking.
It is the way we look at things, it is the thought in an individual’s mind.
Example- I may think or feel that a particular movie is a waste of time, but my friend may find the movie enjoyable and entertaining.
(b) Life Style:
It is the way an individual leads his/her life. Some people have a simple lifestyle, some luxurious lifestyle and some, a complex lifestyle. The way we intend to live our lives affects our thinking and behavior.
Example- A CEO may be seen driving a luxury car or may be seen driving an ordinary car, which type of car he chooses to drive, is his way of living, that is, it is his lifestyle.
It is a drive, an urge or a feeling within an individual to do something or act in a particular manner. In consumer behavior also the extent to which an individual is motivated influences his/her behavior.
Example- A person’s motivation may drive him or her to take admission in a particular school or college, or the motivation from a friend or relative may drive a person to purchase a particular motorbike.
(d) Superiority or Inferiority Thinking:
The way a person thinks of himself, that is superior or inferior in society affects the behavior while purchasing goods and services.
Example- A superior thinking person may buy branded products and luxury items, where as an inferior type of person may be shy and not purchase expensive items etc.
The sensitivity or feelings of a person are very important in human behavior. The emotions of a person will make him buy or reject a product.
Example- A person may get emotional listening to music and take his friend to a dinner, or a person may reject the use of some products which are bad for health or bad for the environment, like coats made from animal skin.
An individual’s capacity to recollect previous events or situations is memory. The memory of a person may influence his behavior during purchases.
Example- The memory of a child going to the ice cream parlor with his parents may drive the child to go to the same place or eat the same brand of ice cream even when he becomes an adult.
These are factors that lie outside the individual’s thought process, but influence the thinking of the individual and his/her behavior.
It is the group of people among whom we live. The society has certain norms which are to be followed by individuals living in that particular society.
Example- People living in high class society will get influenced or attracted towards branded and luxury products.
These are beliefs and values that have evolved over centuries. Every place or region has its own unique culture. The culture in which an individual lives greatly affects his behavior towards the purchase of products.
Example- In India we have a traditional culture, therefore people’s behavior towards western clothing will be conservative as compared to ethnic wear.
(c) Family & Friends:
Our close circle of people, that is our family and friends have a great influence on our purchase behavior. We have seen on many occasions that we have taken decisions based on the information received from our family and friends.
Example- A friend might suggest and influence you to buy a particular bike, or the child may influence the father to buy a particular mobile phone.
(d) Social Class:
The society is divided into different classes, like higher income class, middle income group and lower income group etc. each social class has its key features and these features affect the buying behavior of individuals.
Example- A person from a higher income group may purchase a luxury car whereas a person from a middle income group will purchase a Maruti Alto or any other smaller car.
It is the study of the population. Demographics include the age, gender, income, occupation, lifestyle, and social class etc. of individuals. All this affects the buying behavior of individuals.
Example- Age and gender influence buying behavior. A young person may be very attracted to the new mobile handsets or a girl may be more interested in beauty products than a boy.
(f) Technological Changes:
In the present scenario technology cannot be left out, due to the fast and vast changes happening in technology and its use in marketing has greatly altered the buying behavior of people.
Example- Today people have changed their attitude towards retail shopping, people are now buying from online retail stores like Amazon and Flipkart rather than going to physical shops. All this has happened because of extensive use of technology. Today, we can buy a car with the click of a button.
(g) Economic Situation:
Changes in the economic situation has an impact on the buying behavior of people. During an economic slowdown the attitude of people changes and during a growth period there is a different attitude towards buying.
Example- During the 2008-2009 economic slowdown we saw that people stopped purchasing goods that were not urgent, like luxury cars, apartments etc. from 2015 onwards we are seeing a growth in the economy and this is influencing the people to spend more as they are earning more.
What is Consumer Behaviour – 5 Popular Theories: Economic Theory, Maslow’s Theory of Motivation, Learning Theory, Psychoanalytic Theory and a Few Others
1. Economic Theory (Marshallian Model):
According to economic theory, the consumers are assumed to be rational in their decision-making. They follow the law of marginal utility. Consumers evaluate the alternatives available and they choose that alternative which would provide them with highest utility and lowest cost. The consumer have a set of needs and tastes.
He has got a certain amount of purchasing power. He may not be able to fulfil all his needs because his purchasing power is the limiting factor. Hence, he allocates his expenditure over different products at given prices so as to maximise utility. Thus, the law of equi-marginal utility enables him to secure maximum utility from limited purchasing power. The purchasing decision is based on economic calculations and reason.
Economic model of consumer behaviour is non-dimensional.
The following presumptions are made about buyer behaviour:
i. Lower the price of the product, larger will be the quantity bought — price effect.
ii. Higher is the purchasing power, higher will be the quantity — income effect.
iii. Lower the price of a substitute product, lesser the quantity that will be bought of the original product — substitution effect.
iv. Higher the promotional expenditure, higher will be the sales —communication effect.
The model indicates only how a consumer ought to behave. It does not say how he behaves. So this model cannot be applied to real-world situations because the utility cannot be measured. The model also gives importance only to the product and not to the consumer.
Basically, it is not the product, but the properties and characteristics of the product which influence the buyer behaviour. Hence, the focus should be towards the consumer needs and motives rather than on the product. But this is not permitted in the model. There is a difference between the goal of satisfying the needs i.e., the goal here is the product in question.
The satisfaction comes when the product fulfils the needs of the consumer. This dimension is ignored by this model. Consumer behaviour is multi-dimensional and multi-disciplinary in approach. The economic model is centred only on income of the customer. It ignores all the psychological factors such as motivation, learning, personality, etc.
In modern marketing philosophy, the model which deals with mere price and incomes ignoring all other individual and marketing variables is not considered as adequate. Behavioural scientists have pointed out that the black box of consumer behaviour works in a much more complicated way than the economic model.
Economic model assumes that markets are homogeneous. But now markets are assumed to be heterogeneous. Hence, the economic man is a myth. Buying process is not always rational and price is not the only factor of motivation. Buying is not always at the lowest price.
Motivation is the drive to act, to move to obtain a goal or an objective. Motivation is a mental phenomenon. It is affected by perceptions, attitudes, personality traits and by outside influences such as culture and marketing efforts. Motivation, in buyer, is concerned with the reasons that impel buyer to take certain actions.
It suggests that the reasons behind consumer actions are basically cognitive (attitudes, values and beliefs), but that they involve a dynamic interaction between the person and his or her social environment. A human being is motivated by needs and wants. Our needs may be physiological, social, and psychological. We have a hierarchy of needs.
A want is a recognised need. A want leads to activity to satisfy the need. A drive is an activated (or unsatisfied) want. Neither satisfied wants nor wants beyond the aspirations of the persons are motivators of human behaviour. All behaviour must be stimulated by drives.
Maslow’s Five-level Hierarchy of Needs is well-known in the theory of motivation. Maslow felt that as each need is fulfilled, another higher level need arises and demands priority in its satisfaction. Examples- Marketers are interested in physiological needs as they are closely connected to what the product does- food satisfies hunger, medicines heal a sick person, winter clothing keeps the body warm, etc.
Safety needs are selling points of insurance, real estate and so on. Advertisements from toothpaste to baby foods and toys promise love and affection. For many people, refrigerator, car and air conditioners are status symbols and satisfy the needs of self-esteem, prestige and status.
According to Maslow, man/woman is a perpetually wanting animal and the average human being never reaches a state of complete satisfaction. We should regard individuals as need-satisfying mechanisms who try to fill a set of needs, rather than only one or another in sequence.
Marketers know that we may have multiple buying motives for the same behaviour. Important buying motives (stimulated or aroused needs) are- pride, vanity, fashion, possession, fear, safety, and security, love and affection, comfort and convenience, economy, curiosity, social approval, beauty, and sex or romance.
Any urge moving or prompting a person to purchase decision is called a buying motive. Motivation research as a part of marketing research tries to answer the ‘why’ of buyer behaviour. It also contributes to product development and advertising creativity. In matured economies, physiological and safety needs of the majority of citizens are largely fulfilled.
In these countries, higher level wants such as psychological and egoistic wants demand special emphasis. Hence, marketers in such countries should offer marketing-mixes to satisfy these higher level wants, e.g., love and belongingness, self- esteem, and self-actualisation (what a man/woman can be, he/she must be, i.e., the desire for self-fulfillment).
All theories of consumer behaviour have been primarily based on a learning model, viz., Stimuli-Response or S-R models. Stimulus-Response learning theory is very useful to modern marketing. Learning is the central topic in the study of human behaviour. Learning is defined as all changes in behaviour that result from previous experience and behaviour in similar situations.
It refers to a change in the behaviour which occurs as a result of practice. Thus, learning involves the following steps-
Reasoning; thinking; information processing and perception. Hence, consumer behaviour is critically affected by the learning experiences of buyers.
Psychologists are interested in the formation of needs and tastes. Human beings have innate needs, e.g., hunger or thirst, and learned needs e.g., fear or guilt.
Learning process involves three steps:
Drive is a strong internal stimulus which impels action and when it is directed towards a drive-reducing object, it becomes a motive. A drive, thus, motivates a person for action to satisfy the need. The objects are stimuli which satisfy our drives.
Cues are weak stimuli. Cues determine when the buyer will respond.
Response is the feedback reaction of the buyer. The individual has to choose some specific response in order to fulfil the drive or the need which was acting as a stimulus. For example, a hunger drive can be satisfied by visiting a shop indicated by an advertisement and buying the ready-made food product. If the experience is satisfactory, this response of satisfaction is strengthened.
This learning of links between stimulus, cue, and response results in habits. Thus, we not only learn these links but also our attitudes and beliefs. In marketing it means learning brand loyalty, brand images as well as store patronage. Repeated reinforcement leads to habit formation and the decision process for the individual becomes a routine affair.
Thus, learning model has the following predictions:
i. Learning refers to change in behaviour brought about by practice or experience. Almost everything one does or thinks is learned.
ii. Product features such as price, quality, service, brand, package, etc., act as cues or hints influencing consumer response.
iii. Marketing communications such as advertising, sales promotion also act as guides persuading buyer to purchase the product.
iv. Response is decision to purchase.
According to Freud, human personality has three parts:
i. The id, the source of all mental energy which drives us to action.
ii. The superego, the internal representation of what is socially approved — our conscience.
iii. The ego, the conscious director of id impulses for finding satisfaction in socially acceptable manner.
The id represents our animal or basic impulses, instincts and cravings for immediate and total satisfaction. It points out basic instinctive drives which may be antisocial. The super ego or conscience reflects our idealised behaviour pattern. Many a time there may be conflict — between id and super ego. The ego is the intermediary which mediates the dispute.
The ego is the rational control-centre acting as a mediator between id and the super ego. For example, id will demand buying luxurious goods in credit. Superego will prevent the instinct or credit purchase as problematic. The ego will act as mediator which evolves a workable compromise solution, on the basis of financial condition, and ability to pay instalments without any strain on the monthly budget.
Such a rational approach evolved by the go satisfies both the id and super ego. Self-image of a consumer is a great motivating force inducing him to buy certain products and to express how he feels about himself. The man or woman who rides a car feels that he/she is made for such ride. Promotional messages should protect and enhance the self-image of consumers. Then only they can get orders.
Howard and Sheth model is an integrated model. It assumes problem-solving approach in buying and adopts input-output or system approach in buying. Howard introduced learning process in buying. Satisfaction leads to brand loyalty. Discontentment creates brand-switching by buyers.
The model shows the processes and variables influencing the buyer behaviour before and during a purchase. It emphasises three key variables- Perception, Learning and Attitude Formation.
It explains how consumers compare available products in order to choose the best, which fits their needs and desires.
Consumers learn by finding out the relevant information about products and there are two sources of information:
i. Social Sources and
ii. Commercial Sources.
This information is used for comparison of alternative brands according to various choice criteria.
Thus, the Howard-Sheth model describes buyer behaviour in the following ways:
Motives are based on needs insisting satisfaction. Motives lead to goal-directed behaviour satisfaction. Motives ignite a drive to search and secure information from alternatives. Stimulus- input variables are marketing programme and social environment.
Inputs are Stimuli-
(a) Products in the market.
(b) Commercial information on them, say quality, price, availability, and distinctiveness.
(c) Product information obtained from friends, acquaintances, and reference groups.
In this way, a number of products or brands are perceived and considered by the consumer’s mind. Thus, the resulting perception is selected.
What is Consumer Behaviour – 4 Major Models: Economic, Learning, Psychoanalytical and Sociological Model
Researchers have made several attempts to develop many models of consumer behaviour.
Some of which have been discussed below:
1. Economic Model:
The economic model of consumer behaviour focuses getting the most benefits while minimizing costs at the time of buying. Thus, one can predict consumer behaviour on the basis of economic indicators such as the consumer’s purchasing power and the price of competitive products. For example, a consumer will buy a similar product that is being offered at a lower price to maximize the benefits; an increase in a consumer’s purchasing power will allow him to increase the quantity of the products he is purchasing.
2. Learning Model:
This model is based on the basis of that consumer behaviour which is governed by the need to satisfy basic and learned needs. Basic needs include food, clothing and shelter, while learned needs include fear and guilt. Thus, a consumer will have a tendency to buy things that will satisfy their needs and provide satisfaction. A hungry customer may pass up on buying a nice piece of jewellery to buy some food, but will later go back to purchase the jewellery once her hunger is satisfied.
3. Psychoanalytical Model:
The psycho, analytical model takes into consideration the fact that consumer behaviour is influenced by both the conscious and the subconscious mind. The three levels of consciousness discussed by Sigmund Freud which are id, ego and superego, are all instrumental in influencing a consumer’s buying decisions and behaviours.
4. Sociological Model:
The sociological model primarily considers the idea that a consumer’s buying pattern is based on his role and influence in the society. A consumer’s behaviour may also be influenced by the people consumer associates with and the culture that the society exhibits. For example, a manager and an employee may have different buying behaviours given their respective roles in the company they work for, but if they live in the same community or attend the same church, they may buy products from the same company or brand.
What is Consumer Behaviour – 10 Rules for Building Relationships with Consumers: According to Heil, Praker and Stephen
After having learnt about the consumer behaviour and the need to understand the consumer behaviour, it is important to learn about a significant area which is needed to build good relationship with the consumer. Several researchers have worked hard in this area to ascertain the means by which this relationship could be built.
According to Heil, Parker, & Stephen, there are 10 rules for building relationships with consumers:
1. Average customer does not exist.
2. Make consumer’s experience special, give him/her something to talk about.
3. If something goes wrong, fix it quickly.
4. Guarantee customer satisfaction.
5. Trust the customer, in turn; the customer will trust the company.
6. Do not take customer for granted.
7. The details are important to a customer.
8. Employ people who are ready and willing to serve the customer.
9. Customer cares to find out whether the company is a responsible corporate citizen.
10. Customer’s time is as important as the company’s time.
What is Consumer Behaviour – Important Buying Motives
The following are some of the important buying motives:
(i) Necessities for Human Life e.g., Food, Clothing, Shelter (House)
(ii) Comfort and Convenience –
(a) People always would like to do things in an easy and comfortable manner or with recreation at workplace or at home.
(b) Luxury articles, labour saving devices, recreation goods come under this category.
(iii) Freedom from Fear/Danger
(iv) To be superior
(v) Attract opposite sex
(vi) To live longer
(vii) Gain and Economy –
(a) Making profit securing economy, saving money are what people often desire.
(b) As such every consumer desires his money’s worth purchase goods at lower prices and make monetary gains.
(viii) Social Recognition and Prestige.
What is Consumer Behaviour – Reasons and Facts for Studying Consumer Behaviour
Every seller of goods or services survives only because of consumers. The ‘more the merrier’ has always been the mantra for success.
Following are some of the very interesting reasons and facts for studying and analyzing consumer behavior:
1. Consumers do not always act or react as any Theory or Research would suggest. For example the results have been contrary to what is expected of a consumer in case of Brand loyalty, reaction towards new products etc.
2. Consumer preferences are changing and becoming highly diversified.
3. Researchers have pointed out that consumers dislike using common or identical products and refer differentiated products to reflect their personal needs, personalities and life styles.
4. Meeting of special needs of customers requires market segmentation.
5. Rapid introduction of new products with technological advancement has made the job of studying consumer behaviour more imperative.
6. The proper study of the behaviour of consumer can help in selling those products that might not sell.
7. Implementation of marketing concepts calls for studying consumer behaviour in depth.
8. Education and growing awareness of consumers is resulting in complex and new behavioural patterns, which much be studied before designing any strategy.
Importance of studying consumer behaviour is much emphasized in modern times before producing and selling goods. Old strategy of product oriented selling has given rise to customer-oriented selling taking into account customer’s needs and preferences. Consumer is the king around which entire marketing revolves. If any person makes out a marketing programme without considering consumer preferences, he will not succeed in achieving his objective.
1. Product planning
2. Production, Process and Policies
3. Pricing Decisions
4. Effective Market Segmentation
5. Selection of Distribution System both, Physical, and Channels of Distribution as suited to customers.
6. Effective Promotional Programme
7. Overcoming Cut throat Competition.
8. Knowing Buying Motives of consumers.
9. Decisions regarding colour, packing, labeling as per consumer desires and tastes.
What is Consumer Behaviour – Various Risks: Personal, Social and Economic Risk
Risk is usually unavoidable in buying, although, consumers try to mitigate risk by educating themselves before purchasing goods and services. Consumers also try to avoid cognitive dissonance from economic transactions, commonly known as “buyer’s remorse.” Cutting risk in purchases helps buyers feel better with the transaction.
Various risks that a consumer encounters are discussed below:
1. Personal Risk:
Personal risk involves consumers who might endanger themselves by purchasing certain goods or services. Some purchases might require a certain level of experience to use correctly, increasing personal risk. For example, buying an inhaler, nebulizer or a room heater etc. involve personal risk, if they are not used cautiously.
2. Social Risk:
This type of consumer risk may only be related to the social perceptions of the buyer, rather than held by the entire marketplace. For Examples activities such as smoking, gambling or visiting bars or night clubs are not viewed good by the society. Consumers who are generally not willing to face social risk avoid purchasing these products or purchase them secretly.
3. Economic Risk:
Economic risk is the traditional financial risks consumers face. Common economic risks involve the purchase of overpriced goods, inferior substitutes or goods with limited use.
What is Consumer Behaviour – 10 Major Reasons for Buying Products
Following may be some common reasons for buying products:
2. Social Status
3. Gifting Purpose
5. Festive season
8. Marriage or other special occasions
9. No requirement
10. On demand by children
It may be necessary to note that During Diwali, Lohri, Holi, Rakhi, and other festivals, the buying tendencies of consumers increase as compared to other months. Fluctuations in the financial markets and recession decrease the buying capacity of individuals.