Consumer Behaviour

Meaning:
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.

Definition:
According to Engel, Blackwell, and Mansard, ‘consumer behaviour is the actions
and decision processes of people who purchase goods and services for personal
consumption’.

Nature of Consumer Behaviour:

1. Influenced by various factors:

The various factors that influence the consumer behaviour 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 behaviour is not static. It undergoes a change over a period of time
depending on the nature of products. For example, kids prefer colourful 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 behaviour 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 behaviour 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 behaviour varies across states, regions and countries. For
example, the behaviour of the urban consumers is different from that of the rural
consumers. A good number of rural consumers are conservative in their buying

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 behaviours.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 behaviour 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 behaviour is important to the marketers:

Marketers need to have a good knowledge of the consumer behaviour. They
need to study the various factors that influence the consumer behaviour of their target
customers.

The knowledge of consumer behaviour 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 behaviour 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 behaviour to increase their
purchases.

7. Varies from product to product:

Consumer behaviour 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 behaviour 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 behaviour 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.

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 Scope of Consumer Behaviour:
1) Consumer behaviour and marketing management:
Effective business managers realise the importance of marketing to the success
of their firm. A sound understanding of consumer behaviour is essential to the long run
success of any marketing program. In fact, it is seen as a comer’s tone 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.

2) Consumer behaviour and non profit and social marketing:

In today's world even the non-profit organisations 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 behaviour and decision making process will assist these
efforts.

3) Consumer behaviour and government decision making:

In recent years the relevance of consumer behaviour 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.

4) Consumer behaviour and de-marketing:

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.

5) 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
behaviour.

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 Characteristics of consumer behaviour:
Consumers are nowadays known as the god of market. They should be
treated or worshiped by quality products and services. A satisfied customer brings
profit consistently. So the marketer should understand the customer properly. He has to
understand how one customer behaves in the purchasing time.
Consumer behavior can be explained as all social, psychological and
physical behavior of consumers as they become aware of evaluate, purchase,
consume and tell others about the products and services.

Characteristics of consumer behaviour are:

▪ Consumer behavior is the part of human behavior. This cannot be separated. Human
behavior decides what to buy, when to buy etc. This is unpredictable in nature. We
cannot say that what an individual is going to do in the next moment. Based on the
past behavioral pattern one can at least estimate like the past he might behave.

▪ Learning the consumer is difficult and complex as it involves the study of human
beings. Each individual behaves differently when he is placed at different situations.
Every day is a lesson from each and every individual while we learn the consumer
behavior. Today one may purchase a product because of its smell, tomorrow it may
vary and he will purchase another due to some another reason.

▪ Consumer behavior is dynamic. A consumer’s behavior is always changing in nature.

The taste and preference of the people vary. According to that consumers behave
differently. As the modern world changes the consumer’s behaving pattern also
changes.

▪ Consumer behavior is influenced by psychological, social and physical factors. A

consumer may be loyal with a product due to its status values. Another may stick
with a product due to its economy in price. Understanding these factors by a
marketer is crucial before placing the product to the consumers.

▪ Study of consumer behavior is crucial for marketers. Before producing a product or

launching a product, he has to go through a clear analysis of the consumer behavior.
If the people or prospects reject the product, he has to modify it.

▪ Consumer behavior is a continuous process as it involves the process starts before

the buying and continuing after purchasing. Before buying there will be high
confusions and expectations about the product. After buying it, if the buyer is
satisfied with the product he shows a positive behavior , otherwise negative.

Importance of Consumer Behaviour to Marketers

It is important for marketers to study consumer behaviour. It is important for them
to know consumers as individual or groups opt for, purchase, consumer or dispose
products and services and how they share their experience to satisfy their wants or
needs (Solomon, 2009). This helps marketers to investigate and understand the way in
which consumers behave so that they can position their products to specific group of
people or targeted individuals.

In regard to the marketer’s view point, they assume that the basic purpose of
marketing is to sell goods and services to more people so that more profit could be

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 made. This principle of making profits is heavily applied by almost all marketers. Earlier,
the marketers were successful in accomplishing their purpose. However, today, as the
consumers are more aware about the use of product and other information of the
product, it is not easy to sell or attract customer to buy the product (Kumar, 2004). Thus,
in order to sell a product or service or to convince consumers to buy product, the
marketers have to undergo through proper research to win them over.

The following are some of the points discussed that explains the value to marketers of
understanding and applying consumer behaviour concepts and theories.
1. To understand Buying Behaviour of consumers
2. To create and retain customers though online stores
3. To Understand the factors influencing Consumer’s buying Behaviour
4. To understand the consumer’s decision to dispose a product or services
5. To increase the knowledge of sales person influence consumer to buy product
6. To help marketers to sale of product and create focused marketing strategies

There are different types, classes or categories of consumers of goods and services
and in this article each of them will be discussed to help you understand the difference.

Seasonal Consumers
Many consumers purchase and consume products on a seasonal basis. They
shop at certain times when the need for them arises.
Cash flow for a business selling seasonal products can be very difficult. Long
periods of the year may be without sales, so it is vital to quickly and effectively target
seasonal consumers.

Examples of products that rely on seasonal consumers:

➢ Umbrellas during the rainy season
➢ Cold or icy drinks during the hot seasons
➢ Christmas trees and decorations in December
➢ Beach wear in summer.

Personal Consumers
These types of consumers are individual consumers who purchase goods for the
sole purpose of personal, family or household use.

Examples
➢ Going to the supermarket and shopping for goods which are to be used in the
house
➢ Purchasing a car that you intend to use personally
➢ Purchasing clothes for personal use from a clothing mall
➢ Purchasing a mobile phone for personal communication.

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 Organizational Consumer
Organizational consumers purchase products for organizations, governments or
businesses, They often buy in bulk and may place long-term recurring orders. For this
reason, an organizational consumer is generally highly prized and sought after.

Products and services sold to organizational consumers are often required to

meet very strict standards. They may need to be adapted to meet the specific
requirements of the buyer, and specific prices are negotiated.

Manufacturers and service providers who target organizational consumers are

expected to be flexible in their approach to negotiating a sale, but rigid in maintaining
quality.

Goods may be offered for resale at a profit to the organizational purchaser. Or an

organization may buy raw materials that are aimed at producing other goods which will
later be offered for sale to other consumers.

Impulse Buyers
Impulse buyers are consumers who make unplanned buying decisions.
Impulse buyers make swift buying decisions and immediately purchase when
they 'connect' with the product and its features. There is often some kind of emotional
appeal.
Products impulse consumers purchase are not initially in their plans, so product
placement is very important. Manufacturers who target impulse buyers need their goods
to be featured prominently in a store.

For example:
➢ Chocolates near the check-out counter
➢ Cookies at eye level on the shelf
➢ Bright, eye-catching novelty items where children can spot them.

Service providers can also target impulse buyers, often by offering significant
discounts or immediate service.

Need Based Consumers

Need based consumers are those types of consumers who buy goods and
services when they need them and not any other time. Many of the products in a
hardware store, for instance, are sold to need based consumers.

A need for a certain product will necessitate buying it because it is needed

immediately for a certain purpose. The challenge for marketers is to create a sense of
'need' to promote the sale of products and services.

Examples:
➢ Paint when a wooden house needs to be protected from the weather

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 ➢ Light bulbs when we need to see at night
➢ Heaters or air-conditioning if we need to be comfortable in our homes.
Life insurance sales increase if we are convinced we need to be sure our families are
taken care of if we die.

Discount Driven Consumers

Discount driven consumers are the type of consumers who purchase goods and
services primarily for the discounts on offer. They may not engage in any buying activity
until they hear or see large discounts being offered on products they like.

Discount driven buyers are price sensitive and would rather wait to purchase
products when they come with discounts as opposed to when they are sold for full price.
Coupons and stock-take sales are popular with this type of consumer.
An increasing number of manufacturers, retailers and service providers offer
discounts during recession or harsh economic climates.

Marketers work hard to create brand loyalty among this type of consumer. It may
be as simple as always choosing the same brand of deodorant, the same brand of
soda, or shopping in the same store for groceries or clothes.

Cigarettes and alcohol are classic examples of products that target habitual
consumers. A beer drinker can be expected to always buy the same type of beer, and
smokers have been known to leave a store and go to a different sales outlet if their
brand of cigarette is not available.

Advertising often encourages a persona associated with a specific product to

appeal to habitual consumers.

DETERMINANTS OF CONSUMER BEHAVIOUR

The determinants of consumer behaviour can be grouped into three major

captions namely, economic, psychological and sociological. An attempt is made to
elucidate these with least complications.

I. Economic Determinants:
Economic scientists were the first among social scientists to study consumers
and their behaviour and provided the details about the solutions to the consumer and
consumption problems. Economists, as we are aware, took man as a social and rational
animal.

The basic economic determinants among others are:

1. Personal income:
One’s income is the reward for one’s economic efforts. Income means purchasing
power. When we talk of income in marketing sense, we are more concerned with
‘disposable income’ and “discretionary income’.

‘Disposable income’ is the amount of money that a consumer has at his disposal
for spending or saving or both. In other words, of the total gross income, whatever
balance remains after meeting preemptive demands like taxes, debt repayment and
debt servicing charges and the like.

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 Any change in disposable income will have change in consumer buying
decisions. Decline in disposable income reduces the consumer spending; however,
when disposable income rises, consumer spending not only rises but makes them to go
in for more of luxuries.

In other words, disposable income causes change in the relative demand for
different categories of products and services. On the other hand, ‘discretionary income’
is the income which is available after meeting the basic needs of living.

It is the residual disposable income left after meeting all the expenses essential
to provide a minimum subsistence needs to a family. Discretionary income changes
have their own implications.

A rise in discretionary income results in usually an increased spending by

consumers on those items that raise their living standards. Therefore, a continuous rise
in the discretionary income is likely to change the very life-style of the consumers.

2. Family income:
Where a consumer is the member of a joint family, the buyer behaviour is
influenced by the family income rather than the individual income. It does not mean that
one can ignore the individual income, for family income is the aggregate of individual
income of all the members of the family.

In a joint family, it may so happen that a rise in an individual member’s income

may be neutralised by a fall in another member’s income. That is why; it is the
relationship between the family size or the requirements and the income that finally
determines the buying behaviour or the family members.

3. Consumer income expectations:

Many a times, it is the future income expectations of the consumer that
influences such consumer behaviour. It is the optimism or the pessimism about
consumer income that determines the level of current spending.

If there are bleak prospects of future expected income, he spends less now and
saves more and vice versa. It is worth the noting here that the force and vitality of a
tendency to spend or save depends on the nature of consumer needs.

In case of basic needs of living, such tendency will be too weak for no consumer
denies the minimum subsistence level merely because to bleak future income
expectations. However, in case of non-essential goods, such tendency may be very
strong to save than to spend if he is expecting weak future income generation and vice
versa.

4. Consumer liquid assets:

It is the consumer liquid asset position that influences the consumer behaviour.
Liquid assets of consumers are the assets held in the money or near-money forms of
investments. The best examples of this kind are hard cash, bank balance, bank
deposits, shares and bonds and saving certificates. These assets are built up to buy
some consumer durables or to meet unexpected future needs or contingencies.

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 If a person has more such liquid assets, more carefree he comes in spending
the current or the regular income.

5. Consumer credit:
Availability or paucity of consumer credit has its impact on consumer buying
behaviour. Consumer credit is a facility extended by a market to postpone the payment
of products bought to some future date.

Consumer credit takes number of shapes like deferred payment, instalment

purchasing, hire-purchase arrangements and the like. Easy availability of consumer
credit makes the consumer to go in for those consumer durables which he would have
postponed otherwise. Further, it makes him to spend more freely the current income.

6. The level of standard of living:

The consumer behaviour has the impact of the established standard of living to
which he is accustomed. Even if consumer income goes down, the consumer spending
will not come down proportionately because, it is very difficult to come down from an
established standard of living.
On the other hand, rise in income tends to improve upon the established
standard of living. In case the income falls, the short-fall is made good by borrowings to
a certain extend over a short period of time.

II. Psychological Determinants:

Psychologists have also provided certain clues as to why a consumer behaves
this way or that way. The major psychological determinants internal to the individual are
motivation perception learning, attitude and personality.

Here is an attempt to explain and to know their implications in so far as consumer

behaviour is concerned.

1. Motivation:
Motivation is the ‘why’ of behaviour. It is an intervening variable between
stimulus and response and a governing force of consumer behaviour.

“Motivation refers to the drives, urges, wishes or desires which initiate the
sequence of events known as behaviour.” as defined by Professor M.C. Burk.
Motivation is an active, strong driving force that exists to reduce a state of tension and
to protect, satisfy and enhance the individual and his self-concept. It is one that leads
the individual to act in a particular way. It is the complex net-work of psychological and
physiological mechanisms.

Therefore, motives can be conscious or unconscious, rational or emotional,

positive or negative. These motives range from a mere biological desires like hunger
and thirst to the most advanced scientific pursuits like landing on the Moon or Mars.

It was Abraham Maslow who developed five steps human need hierarchy those
of survival-Safety Belongingness and Love-Easteem and Self Actualisation.

According to him, fulfillment of one will lead to the fulfillment of higher motives.
The implications are that as we move up in the ladder, the input of marketing becomes
more and more deep and subtle.

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 2. Perception:
Marketing management is concerned with the understanding of the process of
perception because, perception leads to thought and thought leads to action. Perception
is the process whereby stimuli are received and interpreted by the individual and
translated into a response.

In other words, perception is the process by which the mind receives, organises
and interprets physical stimuli. To perceive is to see, hear, touch, taste, smell and sense
internally something or some event or some relation.

Perception is selective because, and individual cannot possibly perceive all

stimulus objects within his perceptional field; hence, he perceives selectively.
Perception is organized because, perceptions have meaning for the individual and they
do not represent a buzzing confusion. Perception depends upon stimulus factors. That
is, the nature of physical stimulus itself is a determinant of perception.

The variables like colour size, contrast, intensity, frequency and movement are of
this kind. Again, perception depends on the personal factors. What the individual brings
to the situation governs perception his ability to see or hear the message, his needs, his
moods, memory, expressions and values all these modify the message reception.

The personal factor of perception is his self concept, need, span of

apprehension, mental set and the past experiences.

Perception has its own impact on consumer behaviour or consumer decision-

making. Let us take some such cases:

Perception and communication:

It is estimated that 90 per cent of the stimuli that the individuals perceive come
through sight and rest from hearing. That is why, advertisements bank heavily audio on
visual stimuli.

However, it does not mean that loud noises, bright colours and large ads
themselves guarantee consumer attention and response. Contrary to this, it is the use of
haunting melodies, pastel shades, regional accents and careful adjustment of ad size in
relation to the total page or poster size all affect perception and these factors may give
better results.

Product and brand perception:

Good many studies have been made of the ways in which the consumers
perceive the products and the brands they choose regularly. It is brand images and the
brand differentiation that play vital role in perception in addition to the physical
characteristics of the product. Therefore, it is a must for a marketer to examine all the
factors that impinge on the construction of a brand image to ascertain their effects on
consumer perception of the company’s marketing mix.

Price perception:
Price is another element of marketing mix where perception has its implications.
Studies have proved beyond doubt that consumers judge product or service quality by
price. ‘Higher the price better the quality’ that goes.

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 This goes on establishing that there is going to the direct or positive relationship
between price and demand where marketer is cared to gain. Another aspect of this
price perception is psychological pricing.

The reasoning behind such pricing strategies is that consumers are likely to
perceive used in cut-price sales promotions to increase the feeling that a price has been
drastically reduced.

Store perception:
There are five major components of stores image namely, location design-
product assortment-services and personnel each of which contributes to consumer
perception of the place from which he or she buys.

Mere physical attributes do to talk of a store image. Other intangible factors, too,
influence consumer perception of stores image such as advertising, inter-personal
communication and experience

Consumer perceptions of stores are greatly influenced by consumer’s own self-

perception and motives. Further, consumer’s self-images influence the places in which
they shop.

Perceived risk:
The concept of perceived-risk recognizes that consumer experiences a sense of
risk in purchase and that consumer behaviour can be studied profitably as a risk
reducing behaviour.

Consumer behaviour involves risk in the sense that any action of a consumer will
produce results which he cannot predict with certainty. The perception of risk in a
purchase situation is a function of the possible consequences and the product
uncertainty involved. Perceived risk can be divided into forms namely, ‘functional’ and
‘psychological’.

Functional risk is related with the performance and the psychosocial risk is
related with the fact whether the product enhances one’s sense of well being or self-
concept.

The level of perceived risk is a function of the uncertainty involved and the
possible consequences of purchase and can be reduced by gaining greater certainty or
by minimising consequences. In most cases, it is increasing the element of certainty.

3. Learning:
In behavioural science, learning means any change in behaviour which comes
about as a result of experience. Learning is the process of acquiring knowledge.
Consumer behaviour is a process of learning because; it is modified according to the
customer’s past experience and the objectives he or she has set. This process of
learning is made up of four stages namely, Drive- cue-response and Reinforcement.
‘Drive’ refers to an internal state of tension which warrants action.

Thus, hunger or thirst can be a drive. A ‘cue’ is an environmental stimulus. For

instance, it can be an ad on food item or soft- drink, ‘Response’ represents the person’s
reaction to cues within his environment. Here, it can be purchased of food item or soft-

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 drink. ‘Reinforcement’ is the responses reward.

The food item or soft-drink. ‘Reinforcement’ is the response reward. The food
item or soft drink satisfies the hunger or the thirst. When reinforcement happens, the
response may be duplicated resulting in habit formation or absence of reinforcement
results in extinction of learnt habit.

As most consumer behaviour is learnt behaviour, it has deep impact on

consumer buying process. Prior experience and learning acts as buying guide. In-spite
of such habitual behaviour, one can think of reasonable amount of brand switching,
trying new products, does take place.

The strong tendency of most consumers to develop brand loyalties definitely

benefits the makers of established brands. This makes the manufacturer of a new brand
to face difficulty in breaking such loyalties and encouraging brand switching.

4. Attitude:
The concept of attitude occupies a central position in the consumer behaviour
studies in particular and social psychology in general because; attitude measurements
help in understanding and prediction of consumer behaviour. ‘Attitude’ refers to a
predisposition to behave in a particular way when presented with a given stimulus and
the attitudes towards people, places, products and things can be positive or negative or
favourable or unfavourable.

Attitudes develop gradually as a result of experience; they emerge from

interaction of a person with family, friends, and reference groups. There are three
distinct components of attitude namely, cognitive, affective and co-native. ‘Cognitive’
component is what an individual believes about an object, thing or an event whether it is
good or bad, necessary or unnecessary, useful or useless.

The marketer may be interested in confirming the existing attitudes, or change in

the existing attitudes or create new attitudes depending on how his product is
performing in the market.

Attitude confirmation is, perhaps, the easiest course of action which is followed in
case of established products. Such an act involves only reminding the consumers as to
why they like it and why they should continue it to purchase.

Attitude changing is more difficult task than mere confirming it. It is a change
from disposition to act in the direction of the original attitude to a disposition to act in the
opposite direction.

A product disliked is to be liked by the consumers. It is really a difficult process.

Attitude creation is to make the consumers to forget the old products or brands and to
make them to go in for new product or brand entirely altogether, in fact, it is
comparatively easier to create new attitudes than to change the existing one. The most
powerful instrument of attitude change and creation is advertising.

5. Personality:
Very often, the word ‘personality’ is used to refer to the capacity of a person for
popularity, friendliness or charisma. However, in strict sense, it refers to the essential

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 differences between one individual and another.

Therefore, personality consists of the mannerisms, habits and actions that make
a person an individual and thereby serve to make him distinct from everyone else. It is
the function of innate drives, learned motives and experience.

This means that an individual responds with certain amount of consistency to

similar stimuli. Personality is the interplay of three components namely, ‘id’, ‘the ego’
and the ‘super ego’.

The ‘id’ governs the basic drives and the instincts of an individual. On the other
hand, the ‘super ego’ disciplines the ‘id’ by suppressing anti-social behaviour; it drives
the individual in the direction of more high minded pursuits of civilizations.

The ‘ego’ component is the executive and makes the conscious decisions and
reconciles the inflicting demands of ‘id’ and ‘super ego’, wherever necessary. For
instance, ‘id’ may force an individual to make full use of consumer credit to buy an
automobile, ‘super ego’ dissuades such an activity as borrowing is a kind of social sin in
Indian society.

It is ‘ego’ that reconciles these and works out a compromise making the
individual to pay instalments regularly without any strain on his regular budget.

The personality of an individual is either expressed in terms of traits or type. The

personality traits may be aggressiveness honesty anxiety independence sociability and
so on.

The personality types may be introvert or extrovert or another classification as

tradition direction outer direction and inner direction. Each of these traits and types has
been explored as the possible clues to the behaviour of consumers.

Evaluation of personality’s role in marketing is seen in drawing consumer profiles

and psychographic market segmentation.

III. Sociological Determinants:

In the area of psychological determinants, the consumer behaviour was seen
from the stand point view of an individual. However, the sociologists and social
psychologists have attempted to explain the behaviour of a group of individuals and the
way in which it affects and conditions and individual’s behaviour in marketing or
purchase decisions.

These groups of individuals as determinants are:

1) Family
2) Reference groups
3) Opinion leaders
4) Social class and
5) Caste and culture

Let us see these in brief to know their marketing implications:

1. Family:
Many of the decisions made by consumers are taken within the environment of

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 the family and are affected by the desires, attitudes, and values of the other family
members. Family, as a primary group, is vital because, it links the individual with a wider
society and it is through this that the individual learns the roles appropriate to the adult
life. The family can be ‘nuclear’ or ‘extended’.

A ‘nuclear’ family is a two generational family which consists, usually, a mother-

father and children. The ‘extended’ family is one that spans at-least three generations
which consists of mother-father- children-grandparents uncle-aunts, cousins-nephews
and other in-laws. There is another way of classifying the family based on family life-
cycle.

This classification is ‘home making phase’ from marriage to birth of the first child;
the ‘procreation phase’ from the birth of the first child to the marriage of the first child’s;
the dispersion phase’ from the marriage of the first child to the marriage of the last and
the ‘final phase’ from the marriage of the last child to the death of original partners.

The family impact on consumer buying behaviour can be traced in two ways:
i. The family influence on the individual personality characteristics, attitudes and
the evaluative criteria and
ii. The family influence in the decision-making process involved in the purchases.
Family is both a purchasing and consuming unit. Therefore, it is essential to note
the distinguished family roles of the members.

These roles are:

Initiator: The person who senses the need for the purchase;

Influencer:The person who provides input into the purchase decision;

Decider: The person who has the final say over the decision and

User: The person who is most directly involved in using the purchase

That is why; every marketer is keenly interested in four points in case of family
purchase. There are:
i. Who influences the buying?
ii. Who does family buying?
iii. Who makes buying decision?
iv. Who uses the product?

2. Reference groups:
Each person in the society is not only the member of his family but the member
of some group or groups outside the family circle. These groups can be called as
‘reference groups’.

‘Reference groups’ are those groups which an individual identifies with to the
extent that these groups become a standard or norm which influences his behaviour.

Reference group is a social and professional group that influences the

individual’s opinions, beliefs and aspirations. It is one that provides an individual with a

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 sense of identity, accomplishment and stability.

3. Opinion leaders:
Like reference groups, ‘opinion leaders’ or ‘influentials’ play a key role in
influencing the buying behaviour of their followers. Very often we come across
situations where a person refers to an individual than a group in formulating his or her
behaviour pattern. The individual to whom such reference is made by a person or
persons is the opinion leader.

The beliefs, preferences, attitudes, actions and behaviour of the leader set a
trend and a pattern for others to follow in given situation. In very intimate reference
group, there is a reference person, an informal group leader.

The group of followers respects him and looks up to him. He is the innovator in
the group of followers who respect him and look up to him. He is the innovator in the
group who first tries new ideas and products and then propagates them to his followers.

Marketers very often try to catch hold of the opinion leaders through ads and
other means of communication. If they succeed in selling their ideas and products to the
opinion leaders, then they have sold it to the entire group of followers behind them.

4. Social class and caste:

Buying behaviour of individuals is also influenced by the social class and the
caste to which they belong. Social class is a relatively permanent and homogeneous
division of a society into which individuals or families sharing similar values, life-style,
interests and behaviour can be categorized. Social class is a larger group than intimate
group in structure.

Constitution of a social class is determined by the income, authority, power,

ownership, lifestyles, education, consumption patterns, occupation, type and place of
residence of the individual members. In our country, we can think of three classes are
as ‘rich’, ‘middle’ and ‘poor’. Caste, on the other hand, is the group of the membership
by birth. It is not the wealth but the birth that decides his or her caste. These castes
were based on activity specialisation of profession or occupation.

5. Culture:
Culture adds yet another dimension to the study of consumer behaviour.
‘Culture” refers to all those symbols, anti-factor and behavioural patterns which are
passed on socially from one generation to the next.

It includes cognitive elements, beliefs, values, and norms, signs and non-
normative behaviour. Cultures are specific to the areas in which they evolve. Yet two
nations can enjoy a common cultural heritage. Thus, each nation has its distinct culture
; however, in a particular nation, there may be subcultures identified on the basis of
ethnicity, nationality, religion and race.

Cultural and sub-cultural groups have their unique consumption patterns that
provide important bases to the marketers.

Cultural trends have significant implications for market segmentation, product

development, advertising, merchandising, branding and packaging. While designing the

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 marketing-mix, it is but essential to determine the broad cultural values that are relevant
to the product as well as the most effective means of conveying these values.

Models of Consumer Behaviour

1. Traditional Models:
The early or traditional models were developed by economists with a view to
understand economic systems. Economics helps to understand how scarce resources
are allocated among unlimited wants and needs. The first four Models give a general
view in terms of the Economic model, Learning model, Psychoanalytic model and the
Sociological model.

i. Economic Model:
Under economics, it is assumed that man is a rational human being, who will
evaluate all the alternatives in terms of cost and value received and select that
product/service which gives him/her maximum satisfaction (utility). Consumers are
assumed to follow the principle of maximum utility based on the law of diminishing
marginal utility. It is assumed that with limited purchasing power, and a set of needs and
tastes, a consumer will allocate his/her expenditure over different products at given
prices so as to maximise utility.

The law of equi marginal utility enables him to secure maximum utility from
limited purchasing power.

Economic model of consumer behaviour is unidimensional. This means that

buying decisions of a person are governed by the concept of utility. Being a rational man
he will make his purchase decisions with the intention of maximising the utility/benefits.

Economic model is based on certain predictions of buying behaviour.

i. Price effect – Lesser the price of the product, more will be the quantity purchased.
ii. Substitution effect – Lesser the price of the substitute product, lesser will be the
quantity of the original product bought.
iii. Income effect – More the purchasing power, more will be the quantity purchased

ii. Learning Model:

Unlike the economists, classical psychologists have been interested in the
formation and satisfaction of needs and tastes. They argued that living beings were
influenced by both innate needs such as the primary needs of hunger, thirst, sex,
shelter and learned needs like fear and guilt. A drive (internal stimulus) which when
directed towards a drive reducing object becomes a motive.

The various products or services will act as stimuli to satisfy drives. For instance,
a hungry person will be driven towards food, which after consumption will reduce the
drive and also provide satisfaction. According to learning theorists, this response of
satisfaction (feeling) reinforces the relationship between drive and the drive reducing
stimulus object as well as the related cues.

In marketing context, ‘learning’ will help marketers to understand how consumers

loam to respond in new marketing situations, or how they have learned and responded
in the past in similar situations. Very often it is observed that consumer’s experience

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 with one product from an organisation is likely to be generalised to the other products of
the firm.

iii. Psychoanalytical Model:

This model is based on the work of psychologists who were concerned with
personality. They were of the view that human needs and motives operated at the
conscious as well as at the subconscious levels. This theory was developed by
Sigmund Freud. According to him human behaviour (personality) is the outcome of (a)
‘id’ – the source of all psychic energy which drives to act, (b) ‘super ego’ – the internal
representation of what is approved by the society, (c) ‘ego’
– the conscious directing ‘id’ impulses to find gratification in a socially accepted manner.
Thus, we can say that human behaviour is directed by a complex set of deep-seated
motives.

From the marketing point of view this means that buyers will be influenced by
symbolic factors in buying a product. Motivational research has been involved in
investigating motives of consumer behaviour so as to develop suitable marketing
implications accordingly. Marketers have been using this approach to generate ideas for
developing products – design, features, advertising and other promotional techniques.

iv. The Sociological Model:

According to this model the individual buyer is a part of the institution called
society. Since he is living in a society, he gets influenced by it and in turn also
influences it in its path of development. He is playing many roles as a part of various
formal and informal associations or organisations such as a family member, as an
employee of a firm, as a member of a professional forum and as an active member of
an informal cultural organisation. Such interactions leave some impressions on him and
may play a role in influencing his buying behaviour.

Intimate groups comprising of family, friends and close colleagues can exercise a
strong influence on the lifestyle and the buying behaviour of an individual member. The
peer group plays a very important role in acting as an influencing factor especially in
adopting particular lifestyles and buying behaviour patterns. The group generally has an
informal opinion leader, whose views are respected by the group. This leader is able to
influence the individual member’s lifestyle and buying decisions.

The marketers, through a process of market segmentation can work out on the
common behaviour patterns of a specific class and group of buyers and try to influence
their buying pattern.

2. Contemporary Models:
With the evolution of the consumer behaviour study, newer approaches were
used to understand what influences consumer behaviour. These were said to be
contemporary models. These contemporary models or views differed from the earlier
models mainly because they focused on the decision process adopted by consumers
and borrowed concepts from behavioural sciences field. Some of these models have
been discussed here under.

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 CONSUMER DECISION MAKING PROCESS
The consumer decision-making process can seem mysterious, but all consumers
go through basic steps when making a purchase to determine what products and
services will best fit their needs.

Steps in consumer decision making process

1. Problem recognition
The first step of the consumer decision-making process is recognizing the need
for a service or product. Need recognition, whether prompted internally or externally,
results in the same response: a want. Once consumers recognize a want, they need to
gather information to understand how they can fulfil that want

2. Information search
When researching their options, consumers again rely on internal and external
factors, as well as past interactions with a product or brand, both positive and negative.
In the information stage, they may browse through options at a physical location or
consult online resources, such as Google or customer reviews.

3. Alternatives evaluation
At this point in the consumer decision-making process, prospective buyers have
developed criteria for what they want in a product. Now they weigh their prospective
choices against comparable alternatives. Alternatives may present themselves in the
form of lower prices, additional product benefits, product availability, or something as
personal as colour or style options. Your marketing material should be geared towards
convincing consumers that your product is superior to other alternatives

4. Purchase decision
This is the moment the consumer has been waiting for: the actual purchase.
Once they have gathered all the facts, including feedback from previous customers,
consumers should arrive at a logical conclusion on the product or service to purchase.

5. Post-purchase evaluation
The best marketers know that the process doesn’t end at the purchase step – in
fact, that’s only the beginning of a customer’s value for your company. Once acquisition
is out of the way, your new goal is to create long-term relationships between consumer
and company, ensuring that you get the most value out of your customers, and they get
the most value out of your products

Three levels of consumer decision-making:

➢ Extensive problem-solving
✓ Consumers have not yet established a criteria for evaluating the product
✓ They haven’t narrowed the number of brands to be considered
➢ Limited problem-solving
✓ Consumers have established a basic criteria for product evaluation
✓ They haven’t fully established brand preferences
➢ Routinised-response behaviour
✓ Consumers have some experience with the product category

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 ✓ They have a well established set of criteria for product evaluation
✓ They may search for a small amount of information or may purchase out of
habit

Four views of consumer decision-making:

i. An economic view: world of perfect competition, the consumer has often
been characterised as making rational decisions.
ii. A passive view: depicts the consumer as basically submissive (“onderdanig”) to
the self- serving interests and promotional efforts of marketers.
iii. An emotional view: associate deep feelings or emotions, such as joy, fear, love,
hope, sexuality, fantasy and even a little ‘magic’, with certain purchases or
possessions. These feelings or emotions are likely to be highly involving.
iv. A cognitive view: within this framework, consumers are frequently pictured as
either receptive to or actively searching for products and services that fulfil
their needsand enrich their lives.

Pre-Purchase Behaviour:
When a consumer realizes the needs, he goes for an information search. He
does the same, so that he can make the right decision.

Consumer gathers the information about the following:

➢ Product Brands
➢ Products Variations
➢ Product Quality
➢ Product Alternatives.

The consumer can gather information about a product depending on his age, gender,
education and product’s price, risk and acceptance.

Post-Purchase Behavior
All the activities and experiences that follow purchase are included in the post
purchase behavior. Usually, after making a purchase, consumers experience post-
purchase dissonance. They sometimes regret their decisions made. It mainly occurs
due to a large number of alternatives available, good performance of alternatives or
attractiveness of alternatives, etc.

The marketers sometimes need to assure the consumer that the choice made by
them is the right one. The seller can mention or even highlight the important features or
attributes and benefits of the product to address and solve their concerns if any.

A high level of post-purchase dissonance is negatively related to the level of

satisfaction which the consumer draws out of product usage. To reduce post-purchase
dissonance, consumers may sometimes even return or exchange the product.

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