UNIT 4 CONSUMER BEHAVIOUR

Objectives
The objectives of this unit are to:

• define what is meant by consumer behaviour

• understand its role and importance for a marketer
• identify the major factors that influence a consumer's purchase decision and behaviour
• study each of the major influencing factors in detail to be able to understand
• know the levels of consumer decisions
• appreciate the process of decision making
• relate models of consumer behaviour
• understand organisational buying behaviour and the process of organisation buying

Structure
4.1 Introduction
4.2 Consumer Behaviour and Its importance for marketers
4.3 Types- of -Consumers
4.4 Buyer versus User
4.5 A Model of Consumer Behaviour
4.6 Factors influencing Consumer Behaviour
4.7 Psychological Factors
4.8 Personal Factors
4.9 Social Factors
4.10 Cultural Factors
4.11 What is a Decision?
4.12 Levels of Consumer Decisions
4.13 Process of Decision – Making
4.14 Types of Purchase Decision Behaviour
4.15 Stages in Consumer Buying Process
4.16 Models of Buyer Behaviour
4.17 What is Organisational Buying Behaviour?
4.18 Organisational Buying Process
4.19 Factor Affecting Organisational Buying
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4.20 Summary
4.21 Key Words
4.22 Self-assessment Test
4.23 Further Readings

4.1 INTRODUCTION

Mr.Rao is an office Manager with a fast growing midsized Advertising Agency in the city of
Hyderabad of Telengana state. Mr. Rao’s wife is a home maker while his son is an IT
professional and his daughter is a management graduate. Each member of Mr.Rao’s
household is a well defined consumer entity having different tastes and preferences, likes -
and dislikes and adopts different behaviour patterns while making purchase decisions.

The family may prefer to use either Colgate or Pepsodent toothpaste, Cinthol or Dove toilet
soap and Halo or Head and Shoulders shampoo or any other specific brand that each member
may buy and use as per their affinity or loyalty towards the same. If you closely observe Mr.
Rao’s and his family buying patterns you would try to relate almost a similar behaviour
pattern in your own family as well.

As a consumer you may have a certain set of preferences in food, clothing, books, magazines,
recreational activities, forms of savings and the stores from where you prefer to shop, which
may be different not only from those of your family members but also your friends,
neighbours and colleagues. Each consumer is unique and this uniqueness is reflected in the
consumption behaviour and pattern and process of purchase. The study of consumer
behaviour provides us with reasons why consumers differ from one another in buying and
using products and services.

`What' products and services do we buy, `why' do we buy, `how often' do we buy, from
`where' do we buy, `how' we buy, etc. are the issues which are dealt with in the discipline of
consumer behaviour.

Consumer behaviour can be defined as those acts of individuals (consumers) directly

involved in obtaining, using, and disposing of economic goods and services, including the
decision processes that precede and determine these acts.

As we know that Mr.Rao is an office manager by profession in an advertising firm. In view

of the rapid growth in terms of acquiring new clients and rendering best of their services the
management felt that the current desk tops being used by the executives needs to be replaced
with a more advanced and sophisticated systems for superior quality and speed. Mr.Rao was
assigned the task of identifying and compiling some of the best brands available in the market
and to prepare a detailed summary of each of the systems on various criteria and to submit to
the management for further course of action.

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In the above scenario you will find that Mr Rao is playing a dual role both as an individual or
personal consumer in the context of the household with his own likes and dislikes in choosing
his products or service offerings. While on the other hand having been assigned the task of
identifying and purchasing new desk tops for the company he would be buying on behalf of
the organisation as an organisational buyer by virtue as of his position as an office manager.
Therefore when he is buying for the organisation his buying process and behaviour would be
completely different in terms of product identification, brand selection and choice, the
pricing, the delivery, installation after sales service and a host of allied aspects will be
considered. This change in organisational buying behaviour is primarily due to the firm’s
policies and procedures and other set of guidelines that as an employee he should adhere
while acquiring any kind of assets for the organisation.

In this unit we shall discuss some of the basic issues of consumer behaviour and shall outline
the major influences which shape an individual's consumer behaviour and preferences. The
unit also discusses how as a personal consumer and an organisational consumer arrives at the
decision to purchase a specific product or brand out of the so many available in the market. In
other words, we shall study the process of consumer decision making. Besides, we will also
touch upon individual behaviour and major influences while buying on behalf of the
organisation as in case of Mr.Rao called as organisational buying behaviour.

4.2 CONSUMER BEHAVIOUR AND ITS IMPORTANCE FOR MARKETERS

Consumer behaviour is helpful in understanding the purchase behaviour and preferences of

different consumers. As consumers, we differ in terms of our sex, age, education, occupation,
income, family set-up, religion, nationality and social status. Because of these different
background factors we have different needs and we only buy those products and services
which we think will satisfy our needs. In marketing terminology, specific types or group of
consumers buying different products (or variation of the same basic product) represent
different market segments.
To successfully market to different market segments, the marketing manager needs
appropriate marketing strategies which he can design only when he understands the factors
which account for these differences in consumer behaviour and tastes. In today's world of
rapidly changing technology, consumer tastes and preferences are also characterised by rapid
changes. To survive in the market, a firm has to be constantly innovating and understand the
latest consumer trends and tastes. Consumer behaviour provides invaluable clues and
guidelines to marketers on new technological frontiers which they should explore. For
example, let us consider the advent of smart television in India. When we switched over from
CRT colour television sets in the late nineties, the consumers exhibited a desire to purchase
smart TV for closer-to-life picture viewing with advanced applications and sophisticated
features.

Consumer behaviour is a process, and purchase forms one part of this process. There are
various endogenous psychological and exogenous environmental factors which influence this
process. All these factors and the type of influence which they exert on an individual's
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consumption behaviour can be understood and analysed. Moreover, some of these factors can
be further influenced by specific elements of the marketing strategy, so that the consumer
behaviour process results in a definite purchase decision. To the extent that the marketer can
understand and manipulate the influencing factors, he can predict the behaviour of
consumers. Though prediction can never be absolutely accurate, it certainly reduces the risk
associated with different marketing strategies. Thus, the importance of consumer behaviour
lies in the fact that behaviour can be understood and influenced to ensure a positive purchase
decision. The marketing manager's interest lies exactly here i.e. to ensure that his marketing
strategy results in purchase of the product.

Activity 1
To get a preliminary idea about the study and applications of consumer behaviour complete
the following table in terms of your own purchase behaviour. What are your reasons for
purchasing following products and services?
i) Groceries …………………………………………………………
ii) Health Drink …………………………………………………………
iii) Smart Phone ……………………………………………………...….
iv) Salon Service …………………………………………………………
v) Footwear …………………………………………………………

a) Which brand do you normally purchase?

i) Groceries …………………………………………………………
ii) Health Drink …………………………………………………………
iii) Smart Phone ……………………………………………………...….
iv) Salon Service …………………………………………………………
v) Footwear ------------------------------------------------------------------

b) How often/how much do you buy at a time?

i) Groceries …………………………………………………………
ii) Health Drink …………………………………………………………
iii) Smart Phone ……………………………………………………...….
iv) Salon Service …………………………………………………………
v) Footwear -----------------------------------------------------------------

c) From where do you usually purchase? (Type of retail outlet)

i) Groceries …………………………………………………………
ii) Health Drink …………………………………………………………
iii) Smart Phone ……………………………………………………...….
iv) Salon Service …………………………………………………………
v) Footwear .........................................................................................

d) Conduct a similar exercise for one of your close friends and compare his/her purchase
behaviour with your own. Are there any differences? Identify the reasons for these
differences.

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4.3 TYPES-OF-CONSUMERS
All consumers can be classified into two types -personal and organisational. When you
buy a shirt for your own use - you are buying in your capacity as a personal consumer.
However, when you are buying a computer for use in office you are making the purchase
in your capacity as an organisational consumer. Whenever you buy goods and services for
your own or for family use, you are a representative of a personal consumer. All
individuals thus fall in the category of personal consumer. All business firms, government
agencies and bodies, non-business organisations such as hospitals, temples, and trusts are
organisational consumers of goods and services purchased for running the organisation.
In this unit our focus is on the personal consumer and factors influencing his/her
behaviour. We will also touch upon the organisational consumers as well and the factors
influencing their behaviour.

4.4 BUYER VERSUS USER

Often the person who purchases the product is not the person who actually consumes or
uses the product. A mother buys toys and clothes for consumption by her young children.
The mother is the buyer but the actual consumers are the children. A car is purchased by
the husband or the wife but is used by all the members of the family. Thus, in the family
context, you may either have the situation where the buyer is distinct from the consumer
or the buyer is only one of the many consumers. The question that arises is: Who should
be the subject of study in consumer behaviour? Should we study the buyer or the
consumer? To overcome this problem, in many instances it is the household or the family
and not the individual who is considered the subject of the study.
As a marketer, should have a very sharply defined focus for marketing strategy,
especially promotional strategy. You must identify the best prospect for your products-
whether it is the buyer or the user. But even when the consumer is distinct from the buyer,
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 the consumer's likes and dislikes, taste, etc. influence the buyer's decision to purchase a
specific product or brand. Thus many companies play it safe and focus their promotion at
both the user and the buyer. Consider the promotional message of Maggi noodles and
Rasna Soft drink concentrate: the taste and fun aspects of both these products are meant
to appeal to the children who are the major consumers, while, the convenience (in case of
noodles) and economy (in case of Rasna) are meant to appeal to the mothers who are the
buyers.
Activity 2
a) Identify which of the members within your own family are likely to be the buyers and
users for the following products:
Product Buyer User
Mosquito Repellent ………………………. ……………………….
Air Cooler ………………………. ……………………….
Blue Detergent ………………………. ……………………….
Electric Bike ………………………. ……………………….
Business magazine ………………………. ……………………….
Milk and Dairy
Products ………………………. ……………………….
b) In the above analysis, which of your family member plays the buyer role most of the
times? Identify the reasons and explain.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________

4.5 A MODEL OF CONSUMER BEHAVIOUR

A consumer's decision to purchase a particular product or service is the result of complex
interplay of a number of variables. The starting point for the decision process is provided by
the company's marketing stimuli in the shape of product, promotion, price and distribution
strategy.
The marketing stimuli are received by the potential consumer along with the other stimuli
already existing in the environment. These stimuli may be social, economic, cultural,
technological and political in nature. At the point of receiving the marketing stimuli, the
consumer already has a certain mental, emotional and psychological frame of mind
developed over the years by his cultural, religious, social, family and psychological
background. However, most of these factors (or buyer characteristics) exert their influence at
the sub-conscious level so that the consumer is not really aware of their existence or working.
When a stimulus is received, the consumer goes through an elaborate process of: decision-
making in terms of receiving, retaining, interpreting and evaluating the stimuli according to
his own framework. Depending on the nature of product being purchased, this process may

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work at the sub-conscious level or it may be overt, the time taken to make the decision may
vary from a few seconds to a few days or months. The buyer characteristics and buyer
decision-making process in conjunction with marketing stimuli lead to a decision to either
buy the product or not to buy.
For instance, you are on your way home from office after a hot, long, tiring day. On the way
you see a hoarding for a lemonade drink which promises to be cool, refreshing and tasteful.
This hoarding provides you a stimulus to stop at the nearest cold drink shop and drink
lemonade. All three brands (X, Y&Z) are available at the shop at a certain price. You can
recall some association with each of the three brands from the advertisements you have seen
on TV, hoardings and magazines. You buy a particular brand of cola and consume it. The
initial stimulus for this purchase and consumption was provided by the hoarding. This was
further backed up by other stimuli such as product display in the shop, watching other
consumers buy a particular brand, any point-of-purchase promotion material, earlier
satisfaction with a given brand etc. Your response to these stimuli results in a purchase of a
particular brand. In between, the process of receiving these stimuli and responding to them,
you went through a decision-making process. The stimuli, the process of decision-making
and response constitute a simple model of consumer behaviour as shown in Figure I.
Figure I
A Simple Model of Consumer Behaviour

EXTERNAL INFLUENCES
Marketing Stimuli Other Stimuli
Product Economic
Input Price Technological
Promotion Political
Channel of distribution Social

CONSUMER DECISION MAKING

Buyer Characteristics Buyer Decision
Process
Psychological Process
Personal and Cultural
characteristics

CONSUMER DECISIONS AND ACTIONS

Product choice
Output Brand choice
Dealer choice
Purchase timing
Purchase amount

4.6 FACTORS INFLUENCING CONSUMER BEHAVIOUR

Consumer behaviour is affected by a host of variables, ranging from personal motivations,

needs, attitudes and values, personality characteristics, socio-economic and cultural
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background, age, sex, professional status to social influences of various kinds exerted by
family, friends, colleagues and society as a whole. The combinations of these various factors
produce a different impact on each one of us as manifested in our different behaviour as
consumers. You may think that the best way of utilising your annual saving is to have a
holiday, but your wife thinks it is wisest to invest in a house, while your colleague considers
buying shares as the best way of spending savings. Thus you would find that each person has
his or her own standards of judgments and distinct behaviour in every aspect of his role as a
consumer. But at the same time, underlying the individual differences are similarities which
help explain behaviour of specific types or groups of people. It is these similarities which
make it possible for us to classify and analyse the behaviour of individual consumers.

Psychological factors such as individual consumer needs and motivations, perceptions,

attitudes, the learning process and personality characteristics are the similarities which
operate across different types of people and influence their behaviour. Amongst the social
influences affecting behaviour, we can classify the influences of family, friends, leaders and
the social class to which the 'consumer belongs. Figure II exhibits a detailed model of factors
influencing consumer behaviour. We shall discuss these factors one by one and see how they
influence the individual's behaviour as a consumer.

Figure II
Detailed Model of Factors Influencing Consumer Behaviour

Cultural
Culture
Social
Reference
Sub‐Culture Personal
Groups Age & Life
Social Class Psychological
Cycle Stage
Family
Motivation
Occupation
Roles and Perception Buyer
Income
Status Learning
Lifestyle
Benefits &
Personality
Attitudes

4.7 PSYCHOLOGICAL FACTORS

Consumer Needs and Motivations

We all have needs and we consume different goods and services with the expectation that
they will help fulfil these needs. When a need is sufficiently pressing, it directs the person to
seek its satisfaction. It is known as motive. All our needs can be classified into two
categories-primary and secondary. Primary needs or motives are the physiological needs
which we are born with, such as the need for air, water, food, clothing, shelter and sex. The
secondary needs are our acquired needs which we have developed in response to the society
and environment in which we live. The secondary needs are the result of the individuals'
psychological make-up and his relationship with other members of the society. The
secondary needs may include the need for power, prestige, esteem, affection, learning, status
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etc. Clothing is a primary need for all of us; but the need for three piece Raymond suit, or
kanjivaram saree or silk kimono is expressions of our acquired needs. The man wearing a
three piece Raymond suit may be seeking to fulfil his status need or his ego need by
impressing his friends and family.

All human needs can be classified into five hierarchical categories and this hierarchy is
universally applicable (Fig.III). The theory of hierarchy of needs was propounded by
Abraham Maslow. According to Maslow's hierarchy all needs can be ranked in order of
importance from the low biological needs to the higher level psychological needs. Each level
of unfulfilled need motivates the individual's' behaviour, and as each successive level of need
is fulfilled people keep moving on to the next higher level of need. In figure III the different
levels of needs have been depicted as being water tight compartments, but in reality there is
always overlap amongst the different levels of needs, since no need is ever totally satisfied.
There is always scope for further fulfilment.

Figure III: Maslow’s Hierarchy of Needs

5 Self actualization: Self Fulfillment

4 Ego Needs: Prestige, Status, Success, Self -

respect etc

3 Social Needs: Affection, Friendship,

Belonging etc.

2 Safety and Security needs: Protection, order

stability etc

1 Psychological Need: Food, Water, Air, Shelter,

Sex etc.

Maslow's hierarchy-of human needs helps us understand consumer motivations. It is useful

for the marketer who can identify what generic level need his product is capable of fulfilling
and accordingly position his product and back it up with relevant marketing inputs. Products
such as food and Clothing are bought to fulfil physiological needs; insurance, burglar alarms,
security services are purchased because they fulfil safety needs; most personal care products
such as soap, toothpaste, shaving cream, perfume are bought primarily because they serve
social needs, And luxury products such as jewellery, expensive clothing, fancy house and
cars are bought mainly to serve ego and self actualisation needs. The same product can be
sold to entirely distinct customer segments provided the marketer can correctly identify the
need which the product is fulfilling. For instance, a bicycle may be bought by different
customer segments for entirely different reasons. One segment may buy to use it as a means
of commuting. For another segment, a bicycle serves a recreational/leisure need while for a
third segment, it fulfils the need of a health aid. Still another customer segment buys a bicycle
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for converting into a rickshaw or bicycle cart for selling fruits, vegetables etc. A bicycle is
also purchased for use in competitive sport.

Perception
The second major psychological factor that influences consumer behaviour is perception.
Perception can be described as "how we see the world around us". All the time we are
receiving messages through our five Sense organs viz., eyes, ears, nose, mouth and skin. The
different sights, sounds, smells, tastes and sensations that we feel are known as stimuli. Each
person recognises, selects, organises and interprets these stimuli in his own individual manner
based on his needs, values and expectations and this is known as perception. Since each
individual's needs, motives and expectations are unique therefore each individual's perception
is unique.

Perception helps to explain the phenomenon of why different individuals respond differently
to the same stimulus under the same condition. As a marketing manager, you are providing
stimulus to your consumers through the physical shape, colour, size, fragrance, and feel, taste
of your product, its package, advertisements and commercials. Your interest is to understand
why and what different types of perceptions are associated with each of the stimuli so that
you can highlight that particular stimulus or combination of stimuli which evokes the most
favourable perception in the maximum number of consumers. For example, generally
consumers tend to perceive the quality of perfumes on the basis of package, brand name,
price and manufacturer's image.

Every day, every hour of our life we are being bombarded with a variety of stimuli. If we
were to analyse and interpret each one of these stimuli, it may drive us crazy. But we all have
an in-built screening system which helps us to ‘select’ and ‘recognise’ only the relevant
stimuli and ignore all the others. As a person involved in marketing, you would like to ensure
that the stimuli which you are providing are not ignored by the consumers, but rather they are
recognised, interpreted and retained in the consumer memory. In this context, there are three
aspects of perception which are of immediate interest to the marketer. These are selective
exposure, selective distortion and selective retention.

Selective exposure: You must have noticed that when you are on the look-out for purchasing
a specific product, be it bike, refrigerator, television or any other high value product or
service, you suddenly seem to notice more than the usual number of advertisements
pertaining to that specific product. This is because of your selective exposure. People are
more likely to notice stimuli which relate to their immediate needs. For the marketer, the
implication is that he has to carefully and accurately identify his potential customers since
other customers are not at all likely to notice the stimuli. Having identified the potential
customers, the marketer has to ensure that the stimuli are interesting enough to attract and
hold their attention.

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Selective Distortion: Let us suppose you have decided to purchase a specific brand `A' of
pressure cooker. Since you have already made your decision you would seek only that
information which reinforces the correctness of your decision.

If you hear some positive remarks made about brand `B' you would tend to find some
shortcoming or flaw in that brand so that you do not feel that you have made a wrong
decision by buying brand ‘A’. When you attempt to fit information to suit your own ideas or
personal meaning, the process is known as selective distortion. Thus, a marketer may find
that his message is often not received in the intended manner but it is twisted in different
ways by different consumers.

Selective Retention: People forget much of the stimuli which they receive and only retain
that information which reinforces their values and decision. You are more likely to remember
the positive features of brand `A' pressure cooker since they help reassure you that the
decision which you had made was correct.

Activity 3

What do you think are -the bases for perceiving quality in the following products/services?

i) Green Vegetables …………………………………………………...........................

ii) A pair of Denim …………………………………………………….........................
iii) Multiplex ………………………………………………………….…......................
iv) Dry Fruits ……………………………………………………..…............................
v) Laptop ………………………………………………………...................................
vi) OTT Streaming Service …………………………………………………….............
vii) Wellness Products……………………………………………..................................
viii) Cab Service …………………………………………………………........................
ix) Online Banking …………………………………………………………………....
x) Detergent Powder ……………………………………………………...................
xi) Electric Toaster……………………………………………………….....................
xii) Crockery………………………………………………………………....................
xiii) Stainless Steel Utensils …………………………….................................................

Learning

A new born infant's sucking at the feeding bottle is instinctive behaviour, but a five year old
clamouring for chocolate or chewing gum is the result of learned behaviour. Much of an
adult's human behaviour is learned behaviour.

This is a very significant fact for marketers, because it implies that consumers can be made to
learn the desired behaviour through an inter play of motives, stimuli, cues, responses and
reinforcements. A housewife has the need for cutting down the time she spends for cooking
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in the kitchen. When this need is strong enough to propel her to take action it becomes a
motive. The motive is directed towards the stimulus object - a pressure cooker. The stimuli
are the various advertisements about the product which she sees and hears. Cues are minor
stimuli that determine when, where and how the housewife responds. Positive feedback about
pressure cooker from a friend, seeing it on display in a show-window, a special introductory
price offer is all examples of cues which influence a housewife's response to the motive for
buying a pressure cooker. Suppose the housewife buys the pressure cooker and is satisfied
with its performance, then the chances are that she would like to use it as often as possible,
and in the future may buy another one. The housewife's response to pressure cookers has
been reinforced.

At some later stage, the same housewife wants to buy a food processor. Since she has had a
positive experience with brand ‘A’ pressure cooker, she may infer that the company
manufacturing brand ‘A’ also makes good food processor and choose it over other brands.
This is known as `generalisation' of response.

Learning refers to the skill and knowledge gained from past experience which we apply to
evaluate future decisions and situations. A marketer can build up demand for his brand by
associating it with strong motives, using the appropriate stimuli and cues and providing
positive reinforcement, thus making the consumer `learn' that the brand is good and worth
patronising.

Beliefs and Attitudes

A belief is a descriptive thought that a person has about something. A person may believe
that a certain cooking oil ‘X’ has the lowest fat content and is best for health. This belief may
be based on some real facts or it may merely be a notion or opinion that the person has. The
belief that the customer has about a brand is important because it determines his behaviour
towards buying and using it. The beliefs constitute the brand image, and if the customer has
the wrong beliefs he is likely to generate a negative image about the brand. The marketer
must ensure that consumers have all relevant and correct information about the brand to
facilitate formation of a positive brand image.

Attitude is a person's enduring feeling, evaluation and tendency towards a particular idea or
object. Starting from childhood, attitudes develop over the time with each fresh knowledge
input, experience and influence. Attitudes get settled into, specific patterns and are difficult to
change. It is easier to market a product which fits in well with the existing patterns of
attitudes rather than change the attitudes to fit a new product concept.

Activity 4

a) A company is planning to introduce a growth promoting hair oil for women in the Indian
market. As a marketing consultant to this company, what motivational, perceptual and
attitudinal characteristics will you consider for devising the four P's for this product?

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 i) Product
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................................................................................................................
i) Price
................................................................................................................
................................................................................................................
................................................................................................................

ii) Promotion
................................................................................................................
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................................................................................................................

iii) Place (Distribution)

................................................................................................................
................................................................................................................
................................................................................................................

iv) Kindly repeat similar activity for a service such as dry-cleaning

................................................................................................................
................................................................................................................
................................................................................................................

4.8 PERSONAL FACTORS

A consumer's purchase decisions are also affected by his personal characteristics such as age, sex, and
stage in family life-cycle, education, occupation, income, life-style, his overall personality and overall
self-concept. We shall now discuss some of the influences.
Demographic factors and life-cycle stage
The first factor influencing a buyer's decision is his age. The need for different products and services
changes with age. Babies and children have special needs for products such as milk powder, baby
foods and toys. Young adults need clothes, recreational and educational facilities, transportation and a
host of other age and fashion related consumption needs.
There are certain physiological differences between men and women which result in their having
different consumption needs. Women need specialised medical facilities for pregnancy and delivery.
Their requirement of clothes and cosmetics is different from that of men. Each gender thus has its
own need for specific products and services.
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Consumption behaviour is also influenced by the specific stage of the family life cycle. Table 1 list
nine stages in the family cycle and the predominant buying pattern associated with each. This family
life cycle may be applicable in India only in the urban upper middle classes.

Table 1
Traditional Family Life Cycle and Buying Pattern

Education and Occupation

Education widens a person's horizons, refines his tastes and makes his outlook more
cosmopolitan. An educated person, as compared to somebody less educated, is more likely to
consume educational facilities, books, - magazines and other knowledge oriented products
and services. For instance, in India, we find that educated families are more inclined towards
adopting family planning than families which have no educational background.
The occupation also shapes the consumption needs. People following specialised occupations
such as photography, music, dance, carpentry, etc. need special tools and equipment. But,

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apart from this specific need, the status and role of a person within an organisation affects his
consumption behaviour. Chief executives would buy three-piece suits of the best fabric,
handmade leather briefcase and use services of airlines and five star hotels. A junior manager
or blue collar worker in the same organisation may also buy a three-piece suit but he
compromises on quality.

Income
The income which a person earns is an extremely important influence on his consumption
behaviour. He may aspire to buy certain goods and services but his income may become a
constraint. Income in this context really refers to the income available for spending (i.e.
income after tax, provident fund and other statutory deductions). The person's attitude
towards spending versus saving and his borrowing power are also important influencing
factors. Small size packaging in sachets for products such as tea, shampoo, toothpaste are
meant for the lower income customers who cannot afford a onetime large outlay of money on
such products.
Products which are considered luxuries are more income sensitive than products which fall in
the category of necessities. If you are marketing a luxury product you must keep a close
watch on income and saving trends to avoid decrease in sales resulting from recession. To
avoid sales decline you may need to re-position the product, change the marketing mix or
both.

Personality
Personality is sum total of an individual's psychological traits, characteristics, motives, habits,
attitudes, beliefs and outlooks. Personality is the very essence of individual differences. In
consumer behaviour, personality is defined as those inner psychological characteristics that
both determine and reflect how a person responds to his environmental stimuli. Personality is
enduring and ensures that a person's responses are consistent over time.
There has been a great deal of research into the concept of personality with the objective of
predicting consumer behaviour, in terms of product and brand choice. The assumption in all
personality related research has been that different types of personalities can be classified and
each type responds differently to the same stimuli, and personality can be used to identify and
predict that response. In case of products such as cigarettes, beer and cars, personality has
been used to segment the market. The runaway success of ‘Charms’ cigarettes in the eighties
used a urban young, modern, carefree personality for appealing to the potential market
segment of students and other young people. In contrast, surf detergent powder is promoted
with the help of ‘Lalitaji’- a middle class traditional, forthright and objective housewife.
These are just the right personality variables that would appeal to a potential customer of surf.
Personality research to predict consumer behaviour has either focused on total personality
profile or a specific trait or attempted to find a correlation with product brand choice. But
both these approaches assume that individuals with a given personality profile or trait are
homogeneous in all other respects such as age, income, education, occupation etc. We have
seen how all these factors strongly influence a consumer's decisions. A much broader, more
15
comprehensive approach for characterising behavioural patterns is needed and this is
provided by the concept of life-style.

Life-Style
Life-styles are defined as patterns in which people live, as expressed by the manner in which
they spend money and time on various activities and interests. Life-style is a function of our
motivations, learning, attitudes, beliefs and opinion, social class, demographic factors,
personality etc. While reading this unit, you are playing the role of a student. But at the same
time you also have your career, family and social roles to play. The manner in which you
blend these different roles reflects your life-style.
Life-style is measured by a technique known as psychographics. It involves measuring
consumers' responses to Activities, Interests and Opinions (AIO), along with collecting
information on demographic factors as shown in Table 2. Different individual's responses are
collected and analysed to find distinctive life-style groups. Based on the AIO technique,
different life-styles have been identified and described. The different life-styles are then used
for market segmentation, product positioning and for developing promotion campaigns,
including new products.
To get a good idea of marketing based on life-styles, you only need to look at the promotional
strategies of Garden Vareli, Raymonds and Vimal Textiles.

Life-Style Dimension
Table 2

Activities Interests Opinions Demographic

Work Family Themselves Age
Hobbies Home Social issues Education
Social Job Politics Income
Vacation Community Business Occupation
Entertainment Recreation Economics Family size
Club Membership Fashion Education Dwelling
Community Food Products Geography
Shopping Media Future City size
Sports Achievements Culture Stage in life
cycle

Activity 5
What major differences do you observe amongst the users of Surf and Nirma in terms of
various life-style dimensions?
Life-style Dimensions Surf Vs. Nirma
16
 1. Activities
......................................................................................................................
......................................................................................................................

2. Interests
......................................................................................................................
......................................................................................................................
3. Opinions
......................................................................................................................
......................................................................................................................
4. Demographics
......................................................................................................................
......................................................................................................................

4.9 SOCIAL FACTORS

Reference Groups

As a consumer, your decision to purchase and use certain products and services, is influenced
not only by psychological factors, your personality and life-style, but also by the people
around you with whom you interact and the various social groups to which you belong. The
groups with whom you interact directly or indirectly influence your purchase decisions and
thus their study is of great importance to marketers.

A group is defined as two or more people who interact to achieve individual or common
goals. The three categories of groups which are important for the marketer to understand are:

i) Primary and secondary groups: A primary group is one with which an individual
interacts on a regular basis and whose opinion is of importance to him. Family,
neighbours, close friends, colleagues and co-workers are examples of primary groups.
Secondary groups are those with which an individual interacts only occasionally and
does not consider their opinion very important.

ii) Formal and informal groups: Members of clubs are some of the well known social
groups in our society. Labour unions, social clubs and societies are other types of
formal groups to which individuals may belong. A formal group has a highly defined
structure, specific roles and authority positions and specific goals.

17
 iii)In contrast, an informal group is loosely defined and may have no specified roles and
goals. Meeting your neighbours over lunch once a month for friendly exchange of
news is an instance of an informal group.

iv) Membership and symbolic groups: A membership group is one to which a person
belongs or qualifies for membership. All workers in a factory qualify for membership
to the labour union. A symbolic group is one which an individual aspires to belong to,
but is not likely to be received as a member. A clerk in an office may act as if he
belongs to the top management group by adopting their attitudes, values and modes of
dress. Both membership and symbolic groups influence consumer behaviour but
membership groups have a more direct influence. Primary, informal and small groups
exert the maximum influence on consumers and are of great interest for marketers.

Any of these groups can serve as a reference group for a consumer if it serves as a point of
reference or comparison in the formation of the values, attitudes and behaviour. Different
kinds of groups, whether small or large, formal or informal or symbolic qualify as a reference
group (Figure IV). The concept of reference group is a very wide one and includes both direct
and indirect individual and group influences.

Figure IV
Major Reference Groups

Individual
Individual Reference Group

Family
Friends
Social Class

Culture

Indirect reference groups comprise those individuals or groups with whom an individual does
not have any direct face-to-face contact, such as film stars, TV stars, sportsmen, politicians.
Reference groups are used in advertising to appeal to different market segments. Group
situation with which potential customers can identify are used to promote products and
services. Hidden in this appeal is the subtle inducement to the customer to identify himself

18
with the user of the product in question. The three types of reference group appeals most
commonly used are:
a) celebrities,
b) experts, and
c) the ‘common man’
Celebrities are well known people (in their specific field of activity) who are admired and
their fans aspire to emulate their behaviour. Film stars and sports heroes are the most popular
celebrities. Soft drinks (Thums Up), shaving cream (Gillette), toilet soaps (Lux), textiles
(Raymond,) are advertised using celebrities from the sports and film fields. Experts such as
doctors, lawyers, accountants and authors are used for establishing the benefits of the
product. Colgate and Sensodyne toothpastes are examples of products which use the expert
reference group appeal for promotion.
Another reference group appeal is that which uses the testimonials of a satisfied customer. It
demonstrates to the prospective customer that someone just like him uses and is satisfied with
the product. Hindustan Unilever Ltd. for Surf has used this appeal very effectively, using a
stereo type upper middle class housewife known as `Lalitaji'.
Direct reference groups which exert a significant influence on consumer's purchase decisions
and behaviour can be classified into six categories. These are:
i) the family,
ii) friendship groups,
iii) formal social groups,
iv) formal shopping groups,
v) consumer action groups, and
vi) work groups.
Family
The family is the most important of all these groups and we shall discuss it in detail. The
family as a unit is an important consumer for many products which are purchased for
consumption by all family members. It is a source of major influence on the individual
members' buying behaviour. We can identify two families which shape an individual's
consumption behaviour. One is the family of orientation that is the family in, which you are
born and consists of your parents, brothers and sisters. 'It is from parents that we' imbibe most
of our values, attitudes, beliefs and purchase behaviour patterns. Long after an individual has
ceased to live with his parents, their influence on the sub-conscious mind still continues to be
great. In our country, where children continue to live with their parents even after attaining
adulthood, the latter’s influence is extremely important.
The second type of family is the family of procreation consisting of the consumer's spouse
and children. Within the family, different members play different roles. Marketers are
interested in finding out exactly the role played by individual members so that they can
appropriately design their promotion strategy to suit these differing roles. Traditionally, it has
been the wife's role to purchase food, clothing and other household sundries, while the
19
husband played a dominant role in the purchase of automobiles and life insurance. But with
the emergence of the working woman, these lines of traditional role demarcation have been
getting increasingly blurred. Husbands now have to shoulder a greater part of the household
duties while women are asserting themselves in areas so far treated as the husband's domain.
Thus, the same decision, in different families may be made either by the husband or wife, or
both may have an equal voice. Children are also beginning to exert their influence on the
family's purchase decisions. This is especially true in case of products such’ as television,
music systems, personal computers, white goods etc. where the children are likely to have
more updated information about various brands and product attributes. Commenting on the
consumer behaviour trends in the hi-fi stereo music today, Vice-president of Peico Electronic
(Consumer electronics division) said, "It is teenagers who select sets, and their papas just-buy
them" (as reported in 'India Today' July 31, 1987) well it’s still not changed to a large extent
even in 2021.
Roles
An individual may participate in many groups. His position within each group can be defined
in terms of the activities he is expected to perform. You are probably a manager, and when in
your work situation you play that role. However, at home you play the role of spouse and
parent. Thus in different social positions you play different roles. Each of these roles
influences your purchase decisions.
As a manager, you would like to buy clothes which reflect your status within the
organisation, such as safari suit, three-piece suit, tie, leather shoes etc. But at home where you
are in a relaxed and informal situation you would prefer clothes which are comfortable rather
than formal and you may wear shirts, jeans, kurta pajama, dhoti or lungi or bermuda shorts
etc.
Status
Each role that a person plays has status, which is the relative prestige accorded by society.
Status is often measured by the degree of influence an individual exerts on the behaviour and,
attitude of others.
People buy and use products which reflect their status. The managing director of a company
may drive a Mercedes to portray his status in society. He may go to Europe or U.S.A. for a
holiday, rather than going to Mussoorie or Ooty.

Group norms
The norms of a group are the implicit rules of conduct and behaviour that are expected of its
member. For instance, in certain multi-national companies in India, the norm for office wear
includes a full-sleeved shirt and tie, notwithstanding the terrible heat conditions. If marketers
can identify the various groups to which potential consumers belong, they can successfully
market those products and services whose consumption is dictated by the group norms.
Conformity
20
Conformity implies that members of a group have adopted attitudes and behaviour patterns
that are consistent with the group's norms. In the context of consumer behaviour it refers to
the percentage of members who knowingly use the same brand or product.
Opinion Leaders
Apart from the family, a consumer is influenced by the advice he receives from his friends,
neighbours, relatives and colleagues about what products and services he should buy. This
process of influencing is known as the opinion leadership process and is described as the
process by which one person (the opinion leader) informally influences the actions or
attitudes of others (opinion receivers). The influence is informal and the setting in which the
influencing process takes place has nothing to do with the actual buying or selling of the
product in question. For instance, during lunch hour you may casually ask your colleague to
recommend a good television mechanic. Or you discuss with your relatives and neighbours
what brand of washing machine they possess and try to ascertain which the brand is
recommended by most, before purchasing a washing machine for your own home. Further,
the process often occurs between two persons rather than in a large group setting. Thus, the
opinion leadership process can also be thought of as the 'word-of-mouth' communication.
The advice of opinion leaders is sought in case of specific products. People who have
acquired considerable knowledge and experience in a particular field are thought of as
opinion leaders in that area.
Both opinion leaders and followers receive information on all kinds of products and services
from the mass media. But the opinion receivers are more influenced by the opinion leaders
rather than the media. In the eyes of the opinion receiver, the opinion leader has more
credibility than the mass media. The opinion leaders become a sort of ‘middleman’ receiving
information from mass media and passing it on to opinion receivers.
Advertisers and marketers are concerned with reaching the opinion leaders and ensuring that
they receive the intended information which they can, in turn, pass on to opinion receivers.
Thus the first task of the marketer is to identify the opinion leaders. In a particular society,
persons who are members or participants in a number of social organisations and have a high
social activity participation are likely candidates for opinion leaders. Having identified the
opinion leaders, the next task is to reach them through the media which they patronise. Direct
mail pieces, magazines and journals-of clubs and social organisations and special interest
magazines (for speciality products) are some of the appropriate channels for this purpose.
Diffusion of Innovation
Opinion leaders are usually innovators. They are always trying out new products and brands,
and recommending them to the opinion receivers. The acceptance of new products, brands,
and ideas is known as the diffusion of innovation. In a narrow sense, innovation is defined as
something new or modified which has a relative advantage over the existing products.
Marketers are concerned with the spread or diffusion of this innovation which is a two-step
process. The first step is the spread of awareness of an innovation from its source to the

21
consumers. The second step is the individual consumer decision-making process which leads
up to the acceptance or rejection of the innovation.

Activity 6
i) Name some of the potential candidates to be considered as celebrities for promoting
the following products/services and concepts:
a) tractor brand
b) Fertilizer subsidy
c) family planning concept
d) Winter lotion
e) Landline phone connection
f) Jewellery
g) Smart TV
h) Infant milk powder
i) Cookery magazine
j) Beauty parlour
k) Cab Service
l) Rural Banking
m) Premium Housing
n) Diagnostic Centre
o) Motorcycle Company

ii) What are your reasons for selecting these celebrities?

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

4.10 CULTURAL FACTORS

Culture
Culture is an extremely critical and all pervasive influence in our life. "It is a mould in which
we are all cast, and it controls our daily lives in many unsuspected ways" (Edward T. Hall-
The Silent Language): The study of culture encompasses all aspects of a society such as its
religion, knowledge, language, laws, customs, traditions, music, art, technology, work
patterns, products, etc. All these factors make up the unique, distinctive 'personality' of each
society. For our purpose of studying consumer behaviour, culture can he defined as the sum

22
total of learned beliefs, values and customs which serve to guide and direct the consumer
behaviour of all members of that society. Culture is learned through the following three ways:
a) formal learning in which parents and elders teach children the proper way to behave; for
instance a child may be taught that too many toffees and chocolates are bad for his teeth.
This learning may influence his response, both as a child and adult, towards these
products.
b) informal learning in which we learn by imitating the behaviour of our parents, friends,
or by watching TV and film actors in action;
c) technical learning in which instructions are given about the specific method by which
certain things have to be done such as painting, dancing, singing, etc.
Though a marketer can influence all the three types of learning through his company's
advertising strategy, it is informal learning which is most amenable to such influences.
Children learn much more about products and services through advertisements in mass media
(especially TV) than they do either from their parents or teachers. Brand loyalties and images
developed in the early, formative years of childhood tend to be deep-rooted and affect the
child's consumer behaviour even in later years of adulthood. Marketers' interest lies in
identifying the potential consumer segments and ‘catching them young’.
The kinds of products and advertising appeals that can work effectively in a society depend
largely on its cultural background. In the Western Society, individualism, freedom,-
achievement, success, material comfort, efficiency and practicality are values which are
followed and imbibed by the younger children. Products and services which fulfil these
values are most successfully marketed in America. In the Indian society, on the contrary,
conformity, spiritualism, respect for the elderly, traditionalism and education are some of the
dominant cultural values. However, our society is undergoing a cultural metamorphosis and
you can discern some major cultural shifts which have far reaching consequences for the
introduction of a vast variety of new products and services. Some of these changes are as
follows:
i) Convenience: With more women joining the work-force there is an increasing
demand for products that help lighten and relieve the daily household chores, and
make life more convenient. This is reflected in the soaring sale of gas stoves, food
processors , "washing machines, vacuum cleaners, ready to eat/cook packets of
dehydrated frozen/precooked foods, fast food outlets and many more.
Fifteen years ago when Hindustan Unilever first introduced the concept of dehydrated
vegetables and marketed Hima peas, the concept did not succeed. The cultural value
was of eating fresh and freshly cooked food. But today that cultural value does not
have a strong hold, and frozen foods which can't be kept up to 6-7 months are being
successfully marketed.
ii) Education: People in our society today wish to acquire relevant education and skills
that would help improve their career prospects. This is evident from the fact that so
many professional, career-oriented educational institutes in technology and

23
 management education are coming up, and still they cannot seem to meet the demand.
The establishment of IGNOU is also a result of cultural trend.
iii) Physical Appearance: Physical fitness, good health, and smart appearance are on
premium today. Slimming centres, beauty parlours, yoga centres are mushrooming in
all major cities of the country. Wellness and grooming products and services both for
women and men have sprung up in every nook and corner of major cities and towns.
Exclusive shops retailing designer clothes at fancy prices are doing brisk business.
iv) Materialism: There is a definite shift in the people's cultural value from spiritualism
towards materialism. People are spending more money than ever before on acquiring
products such as air-conditioners, cars, motor cycle, home screen theatre etc. which
add to both physical comfort as well as status. A company which wants to grow must
keep a tab on such major cultural trends to ensure that its products fit in well with
these new trends.
Sub-culture
Within the large framework of a society there exist many sub-cultures. A sub-culture is an
identifiable distinct, cultural group, which, while following the dominant cultural values of
the overall society also has its own beliefs, values, customs and rituals that set them apart
from other members of the same society. Table 3 lists the various sub cultural categories that
can be identified in any society.
Table 3
Sub Cultural Categories

These sub-cultures offer readymade market segments to the marketer who can position his
product to meet the specific needs, motivation, perception and attitudes of each sub-culture.
However, the marketer may need to modify both his product and advertising appeal to suit
their specialised needs.
Every member of a society is a member of several sub-groups, (such as an elderly, Keralite,
Christian, Woman, teacher) and the consumer's purchase decision is a result of the influence
of these various sub-groups. The marketer must understand how the specific sub-cultural
groups interact with each other and exert their influence on the member's consumption
behaviour.
24
Social Class
In every society there is inequality in social status amongst different people and the people
are categorised into different social classes. Social classes can be defined as relatively
permanent and homogeneous divisions in a society in which individuals or families sharing
similar values, life-styles, interests and behaviour can be categorised. Social class is a concept
based on distribution of status and the categories are usually ranked in a hierarchical order
ranging from low status to high status. People belonging to a particular class tend to restrict
their interaction to people belonging to the same class; unless it is for a very specialised
purpose. Within a social class there are shared values, attitudes and behavioural patterns of
consumption of certain products and services. But if we compare different social classes, we
would find differences in values, attitudes and behaviour between each class, as also a pattern
of consumption behaviour unique to each class.
Social class is an ideal basis for segmenting the market, as different social classes exhibit
distinct product and brand preferences. Within the same social class, there is sharing of
information on different products and brands, while between the different social classes there
is little communication. Different social classes have different media exposure and habits. Let
us take the instance of English women's magazines: If we study the profile of Femina, Savvy,
and Woman's Era, we would immediately realise the different class of readers each magazine
is catering to. Social classes, thus, are market segments which are easily identified and also
easy to reach.
Social class is a complex variable which is determined by a person’s income, occupation,
education; personal performance and possession of different types of products.
Social classes can be categorised on the basis of a number of different bases such as blue
collar workers and white collar workers, educated and uneducated and so on. The most
commonly accepted and used categories of social classes are shown in Table 4 along with
their dominant distinguishing characteristics and the stereo type products and services
consumed by them.

Table 4

25
4.11 WHAT IS A DECISION?

In the earlier sections we have discussed the concept of consumer behaviour its importance to
marketers and the simple model of consumer behaviour. Eventually the factors influencing
consumer behaviour have been dealt very exhaustively for better understanding and their role
in the decision makes process.
A decision is the selection of an alternative out of the several numbers of alternatives
available. It is only when theme are two or more alternatives available that there is the need
to make a choice. In the field of consumer behaviour, we are only concerned with situation in
which the consumer has to take a purchase decision where there is a choice available.

26
4.12 LEVELS OF CONSUMER DECISIONS

As a buyer or consumer you are all the time making decisions such as what product to buy (a
book or a shirt as a birthday present for your friend), Which brand of soap from where to buy
etc. Table 1 presents a summary of the different levels of purchase related decisions most
commonly encountered by consumers. The table highlights the broad range of choices the
consumers have to select from when making a decision, starting from the generic product
category level to the brand level and retail outlet level.

Table-1

4.13 PROCESS OF DECISION-MAKING

The most basic and important requirement for the marketer is to understand how consumers
make choices. Ajzen and Fishbein have attempted to explain human choice behaviour in their
theory of reasoned action which states that:
"Generally speaking-human beings are usually quite rational and make systematic use of
information available to them. People consider the implications of their actions before they
decide to engage or not to engage in a given behaviour."
Thus, making a decision is a rational and conscious process in which the consumer evaluates
each of the available alternatives to select the best amongst them. Each decision you make
involves an elaborate mental thought process, a degree of active reasoning, though on the
surface it may not always seem to be so. This may be because over a period of time you have

27
taken certain decisions so many times that they now seem to be made almost automatically
but that is not true at all. Even your daily decision of buying a loaf of bread involves the
element of active reasoning as buying a new sofa set for your drawing room. However, in the
former case, the extent and intensity of active reasoning may be much less as compared to the
latter case.
In the case of bread, the only decision variables may be which brand, quantity and retail
outlet. But in case of buying a sofa set the decision variables are far more in number. These
may be:
ready-made or made to order
from a furniture shop or to be built at home
type of material for frame: Wood, Steel, Aluminium
type of material for cushion: cloth, rexine, leather
design: with or without arm-rests, height, depth of seat, seating capacity, loose or fixed
cushion.
Thus, depending on the type of decision being made, the degree and strength of active
reasoning will vary.
There are three factors which influence the degree of active reasoning that is undertaken by
the consumer in his process of decision-making. These are:
- involvement,
- alternative differentiation, and
- time pressure
-
Involvement: When a product is perceived to be of great personal importance to the
customer, such as personal clothing, or its purchase involves a great deal of money or risk
such as jewellery, car, house, company shares, the level of involvement in making the
decision is likely to be very high. The consumer is likely to spend a great deal of time before
arriving at the final decision. In contrast, when buying items which do not reflect much on the
consumer's personality or their purchase involves small amounts of money .or the risk
associated with them is not high, the degree of involvement of the consumer is likely to be
low. Products such as shoes, polish, toilet soap, toothpaste, biscuits etc. would fall in this
category.

Differentiation: When the consumer perceives that the various alternatives which are
available are very different from one another in terms of their features and benefits offered,
he is likely to spend more time in gathering information about and evaluating these different
features. On the other hand, in case of products which are not very different from one another
either in terms of their features or benefits offered, the consumer is bound to perceive them as
being almost the same and buy the first available product/brand which satisfies his minimum
expectation. He will not like to spend much time in evaluating the various alternatives. The
various brands of washing powder available in the market today are an excellent example of
low level of differentiation with the consumer perceiving the different brands to be offering
28
almost identical benefits. All the brands, such as Nirma, Vimal, Vijay, etc. look similar with
identical packing and carry almost the same price tag.

Till a few years ago, the motor cycle market in, India was highly undifferentiated with Jawa
and Rajdoot offering almost identical motor cycles to the consumers in terms of basic
features. But today the same market is highly differentiated. The consumers have a wide
range of brands to choose from such as Hero, TVS, Yamaha, and Bajaj etc. each offering a
variety of shapes, horse power and many other innovative features to choose from. A
potential consumer of motor cycle would have to spend considerable time in evaluating each
brand before he is in a position to make his decision.

Time Pressure: When you are under pressure to make a decision quickly, you cannot afford
to spend a long time finding out about the various products or brands. You would probably
buy whatever is readily available. While travelling in your car to a hill station your car tyre
bursts and you need to buy a new one. At that time you would buy the brand that is available
at whatever price without giving it too much thought. But under a different situation, when
you need to buy new tyres, you would certainly like to find the features of nylon, radial and
tubeless tyres and evaluate various brands e.g. MRF, Dunlop, Ceat and Apollo etc. on their
individual advantages and disadvantages.
Activity 7
a) For each of the products/services written below, identify whether the purchase
decision involves a high or low degree of involvement under normal circumstances:
i) Car Tyre
ii) Wooden Almirah
iii) Buying Platform Ticket
iv) Electric Bike
v) Suiting Material
vi) A pair of Glasses
vii) Dairy Products
viii) Buying Groceries
ix) Booking a Cab
x) Voltage stabiliser.

b) In respect of the above products, record which differentiated alternatives (brands) are
available in the market.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________

29
4.14 TYPES OF PURCHASE DECISION BEHAVIOUR
Consumer buying behaviour varies with the type of buying decision. Earlier, we stated that
while a decision for buying bread was almost made automatically, the decision for buying a
sofa set was more deliberate and time consuming. Similarly, there is a great deal of difference
in buying a tube of toothpaste, clothes for yourself and a refrigerator for your home. We shall
now distinguish three types of buying behaviour:
i) Routinised response behaviour,
ii) Limited problem solving, and
iii) Extended problem solving.

i) Routinised response behaviour (RRB): This occurs when the consumer already has
some experience of buying and using the product. He is familiar with the various brands
available and the attributes of each and has well established criteria for selecting his own
brand. Consumers do not give much thought or time when buying such products and
already have a preferred brand. The degree of involvement in buying such products is
low. Frequently purchased and low cost products such as razor blades, coffee powder,
toothpaste, soap, soft drinks, etc. fall in this category.

Marketers dealing in products involving routinised response behaviour must ensure the
satisfaction of existing customers by maintaining consistent quality, service and value.
Also, they must attempt to attract new customers by introducing novel features, using
point-of-purchase promotional material and special displays.

ii) Limited Problem Solving (LPS): In this type of buying behaviour, the consumer is
familiar with the product and the various brands available, but has no established brand
preference. The consumer would like to gather additional information about the brands to
arrive at his brand decision. For instance a housewife buys refined vegetable oil for her
cooking. She is familiar with the concept of vegetable oil (as opposed to say vanaspati
and ghee) and also knows that Sundrop, and Fortune are some of the prominent brands
available. But to establish her choice of brand, she would like to check with her friends
and regular shopkeeper about the attributes of each.
Limited problem solving also takes place when a consumer encounters an unfamiliar (or
new) brand in a known product category. The housewife, who buys refined vegetable oil,
on her next visit to the market, sees a new brand of oil, Saffola. Apart from being a new
brand, this brand of oil also claims the unique attribute of being low in cholesterol. To
arrive at a decision, whether or not to buy this brand, the housewife needs to gather
information about the new brand which will allow her to compare it with the known
brands.
The marketer's task in a situation where he is introducing a new brand in a well known
product category is to design a communication strategy that gives complete information

30
 on all the attributes of the brand, thus increasing the consumer's confidence and
facilitating his or her purchase decision.

iii) Extensive Problem Solving (EPS): Extensive problem solving occurs when the
consumer is encountering a new product category. He needs information on both the
product category as well as the various brands available in it. This kind of decision is by
far the most complex.
For instance, you are thinking of buying a Flat colour television to replace your existing
CRT colour TV set. You do not have much idea about how to judge the quality of a,
colour TV set. You have heard about the various brands, such as Videocon, BPL,
Samsung, LG, Sony, Thomson etc. but you do not know what their respective quality
ranking is in colour TV. Each brand makes claims of foreign technology, latest features
such as flat square tube and channel display. Further, there is a range of models to choose
from within each brand, models with remote control, different cabinet colour finish,
vertical monitor styling etc. To arrive at a decision, you have to gather information at
three levels and also establish criteria for evaluating this information. The three levels of
information gathering and evaluation are at generic product level, brand level and model
level within each brand.
The marketing strategy for such buying behaviour must be such that it facilitates the
consumer's information gathering and learning process about the product category and
his own brand. The marketer must be able to provide his consumer with a very specific
and unique set of positive attributes regarding his own brand, so that the purchase
decision is made in his favour.

The concept of EPS is most applicable to new products. The product may be new at the
generic product concept level (such as Maggi noodles) or it may be an established
product concept but new for a particular consumer. In case of a new product concept
such as ready to cook instant snack, the entire consumer universe is unfamiliar with the
product. The marketer has to spend large amounts of money in educating the consumers
about his product. The consumers in turn need a great deal of information before they
can take a decision; and the decision process takes a long time. On the other hand, you
may have the situation where the product concept is well understood by a majority of the
consumers, but it is being bought or used by a particular consumer for the first time. To
take a very simple example, a tribal who is exposed to the concept of toothpaste for the
first time in his life will seek a lot of information and take a long time to decide. For him,
buying toothpaste is a EPS behaviour, whereas for most of us it simply requires a
routinised response behaviour.

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 4.15 STAGES IN CONSUMER BUYING PROCESS

Even buying decision involves an element of active reasoning. The manner in which this
active reasoning manifests itself is illustrated in Figure I. In making a buying decision the
consumer goes through the five stages of:
i) problem recognition,
ii) pre-purchase information search,
iii) evaluation of alternatives,
iv) purchase decision, and
v) post purchase behaviour.
However, in case of routine purchases, the consumer may skip the second and third stages
and straight away go to the stage of purchase decision. But in case of purchase decision
involving extensive problem solving, the consumer is likely to go through all the five stages
in the specified sequence.
The important point to note is that the buying process starts much before the actual purchase
and has implications even after the purchase has been made. This should give ideas to the
marketer as to how he has to start designing his marketing strategy in order to achieve his
specified marketing objectives.
Figure I: Stages in the Buyer Decision Process

Let us understand the stages in decision-making process with the help of a Mr. Rao's specific
decision to purchase a briefcase.
i) Problem Recognition: The buying process starts with the buyer recognising a need or
problem. Lets come back to Mr. Rao he feels very uncomfortable carrying his papers, files
and lunch packet in his hand or in a plastic bag to his work place. Sometimes, the papers
and even files from his hand and get spoiled Mr. Rao feels the need for a suitable holder to
carry papers to and fro from his office and has identified a briefcase as the solution to his
problem.

ii) Pre-Purchase Information Search: In response to the stimuli provided by the need for a
briefcase, Mr. Rao starts searching for information on the kinds of briefcases available in
the market. Search can be of two types: internal and external. Internal search refers to
recalling relevant information stored in the memory. For instance, Mr. Rao may recall
having seen the different kinds of briefcases used by his colleagues. Or he may recall
having seen some advertisements for briefcases on the television or in some magazines
and newspapers. External search refers to the deliberate and voluntary seeking of new

32
 information regarding the product/brand under consideration. Mr. Rao can seek
information from the following three sources:

Personal sources: family, friends, colleagues, neighbours.

Commercial sources: advertisements, retailers, salesmen.
Public sources: seeing others, consumer information centres.
By tapping all these sources of information, Mr. Rao is able to identify the different types of
briefcase on the basis of material, branded versus unbranded, high-medium low priced. A
wide variety of materials are used for making briefcases ranging from the best leather to
rexine to plastic. There are branded briefcases available and Mr. Rao can choose from the
well known VIP, Safari and Aristocrat and some less known local brands, or he can choose to
buy an unbranded briefcase. The price range varies according to the size the material that has
gone into its make of the briefcase etc. Also, there are a number of other features which can
influence the choice, such as type of lock, and number of partitions and pockets for keeping
different documents.
By the end of this stage, Mr. Rao has gathered enough information about different kinds of
briefcases available and has narrowed down his alternatives to moulded plastic, branded
briefcase. Within this broad range there are various brands and price ranges to make the final
choice from.
Evaluation of Alternatives: Mr. Rao will make his final decision using certain evaluative
criteria. The most commonly used criteria are: (i) product attribute, (ii) the relative
importance of each attribute to the consumer, (iii) brand image, (iv) attitudes towards the
different brands or alternatives under considerations. For instance, the product attributes of
the (Plastic branded briefcase) alternatives identified by Mr. Rao are: unbreakable,
lightweight, spaciousness, reliability of locking system, colour, and price. Mr. Rao attaches
maximum importance to the product attributes of light weight and spaciousness as compared
to other attributes. He already has some kind of attitude towards the various brands developed
in the stage of information search which will affect his final decision.
This stage of the buying decision process gives the marketer a chance to modify his product
offering in keeping with the relative importance attached to each attribute by various
consumer segments, altering beliefs and attitudes about his own brand, and calling attention
to neglected product attributes,
Purchase Decision: In the evaluation stage, Mr. Rao has ranked the various brands in terms
of his first, second and third preference. In short, he has made up his mind about which brand
he wants to buy. However, Mr. Rao may finally end up buying a brand which is not his most
preferred. This may happen because attitudes of others and ''situational factors.
For instance, when Mr. Rao goes to the shop to make his purchase, the shopkeeper's negative
remarks about his (Mr. Rao's) most preferred brand may make him change his mind. Also, it
is possible that Mr. Rao's preferred brand is not available, or there is a very attractive price
discount on the brand ranked third by him which eventually makes him change his mind.

33
Post Purchase Behaviour: After purchasing the briefcase, if Mr. Rao finds that its
performance or utility matches up to his expectation, Mr. Rao will feel satisfied with his
purchase. The satisfaction will reinforce Mr. Rao's perceived favourable image of the brand,
which is likely to be extended to the entire range of products manufactured by the Company.
Also, Mr. Rao is likely to strongly recommend the brand when his friends ask his advice for
buying a new briefcase. A satisfied customer is thus a very powerful source of influence for
potential customers.
However, if Mr. Rao feels that the briefcase which he has purchased is not up to his
expectation, then he is likely to feel dissatisfied. The gap between expected (or perceived)
and the actual performances cause discomfort or dissonance to the buyer. As a result of this,
Mr. Rao may decide to stop buying other products sold by the same company and also warn
his friends about the poor utility of his briefcase. To reduce his own state of discomfort or
dissonance arising from the feeling that he has not made the right choice, Mr. Rao can: (i) re-
evaluate the unchosen brands and downgrade their desirability by identifying some negative
features, and (ii) search for information to confirm his choice.

Activity 8
a) Consider the case of a consumer durable which you may have recently purchased. Try
to recall the actual process you might have undergone in buying that. Write down the
specific activities you undertook at each stage of the decision-making process.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________

b) Do you find any differences in the approach described above and the approach that you
may have followed? What could be the reasons for these differences?
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________

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4.16 MODELS OF BUYER BEHAVIOUR

Consumer behaviour is a process and purchase is only one stage in that process. There are
many underlying influences ranging from internal motivations and attitudes to social and
external influences of many kinds. Having explained the consumer decision making process,
now let us turn our attention to the process of consumer or buyer behaviour. We shall explain
the process of buyer behavior with the help of three models. The first two models describe
the decision process as applicable to individual consumer. The third model explains the
decision-making process of a group, namely the family.
Howard-Sheth Model
This model explains the buyer decision process using four major sets of variables as presented
in Figure II. The four sets of variables are: (i) inputs, (ii) perceptual and learning constructs,
(iii) outputs and (iv) exogenous or external variables.

Input: The input to the customer decision process is provided by three distinct types of
stimuli. Of these two types of stimuli are provided by the marketer in the form of
physical, tangible product characteristics known as significative stimuli, and intangible,
perceptual product characteristics known as symbolic stimuli. To return to the example
35
 of Mr. Rao, while the physical appearance, sturdiness, finish, and spaciousness would
constitute the significative stimuli for quality, the overall quality that Mr. Rao perceives
in his briefcase connotes the symbolic stimuli. The actual price paid for the briefcase is
significative stimulus while the perception that the price is reasonable or too high or is a
good bargain is the symbolic stimulus. The third type of stimuli is provided by the
consumer's family, reference groups and social class to which he belongs.

Perceptual and learning constructs: These constructs are composed of psychological

variables such as motives, attitudes, perceptions which influence the consumer's decision
process.
The consumer receives the stimuli and interprets it. The two factors that may influence his
interpretation are stimulus ambiguity and perceptual bias. Stimulus ambiguity occurs when
the consumer is not sure about the meaning of the stimulus that he has received and how it
may influence his response. Perceptual bias occurs when the distorts the information he
receives to fit his established needs or experiences.
The manner in which the consumer interprets the stimuli leads him to the stage of brand
comprehension. This refers to the consumer's understanding and overall rating of the brand.
If the consumer rates it high, it leads him to have confidence in it and eventually to the
purchase decision.

Output: The purchase decision is the output. If after using the product, the consumer is
satisfied with it, this will reinforce his positive attitude and purchase intent about the
product and brand. Also, the positive attitude makes the consumer more attentive to the
product/brand's stimuli and further increases his brand comprehension.
If the consumer is dissatisfied with experience of using the product/brand, it will trigger off
a reaction of negative attitude, low attention to the product stimuli, poor brand
comprehension and negative intention to purchase.

36
Exogenous of External variable: These are not directly a part of the decision making
process and are not shown in the model. But they are important to the extent that they
influence the consumer. These exogenous variables vary from one consume to another and
include: consumer personality traits, social class, importance of the purchase, financial status
etc.
Engel-Kollat-Blackwell Model
The Engel-Kollat-Blackwell model consists of four components: (i) information processing,
(ii) central control unit, (iii) decision process and (iv) environmental influences. (see Figure
III)

37
i) Information Processing: This component comprises the consumer's selective exposure,
attention, comprehension and retention of stimuli relating to a product or brand received
from marketing and non-marketing sources. As a marketer, the first step is to ensure that
a consumer is exposed to your message (stimuli), pays attention to it, understands what it
is all about and also remembers it.

ii) Central Control Unit: The stimuli thus received and retained is processed in the central
control unit. The stimuli is processed and interpreted with the help of four psychological
filters:

a) stored information and past experience about the product/brand which serves as
memory for comparing different alternatives;

b) evaluative criteria which the consumer uses in judging the interactions;

c) general and specific attitudes which influence-the purchase decision;

d) basic personality traits which influence how the consumer is likely to respond to
various alternatives.

iii) Decision Process: The decision process component of the model consists of:

a) problem recognition

b) internal search and evaluation

c) external search and evaluation

d) purchase processes

e) decision outcomes.

If the purchase decision is such that it requires extensive problem solving, the consumer
would go through all the above five stages. In case of limited problem solving or routinised
response behaviour, some of the intervening stages may be skipped and the consumer may
directly reach the purchase decision.

iv) Environmental Influences: The environmental factors that may influence the
consumer's purchase decision are income, culture, family, social class and physical
situations. Depending on the specific product under consideration, these factors may
have a favourable or unfavourable influence on the purchase decision

Model of Family Decision-making

Before describing the model of family decision-making, it is important to understand how the
various family members interact with each other in the context of their consumer decision-
making. These interactions are determined by the different consumption related roles played
by members in a family. These roles are:
38
 i) Influencers: Those family members who provide information and advice and thus
influence the purchase. The housewife tells her family about the new hair cutting
saloon which has opened in the neighbourhood and her favourable description about it
influences her husband and teenaged children to also patronise the saloon.

ii) Gatekeepers: Those family members who control the flow of information about a
product/service thus influencing the decisions of other family members. The teenage
son, who wants a racing bicycle, may withhold from his father much of the relevant
information on all brands except the one that he fancies, thereby influencing his
father's decision in favour of his preferred brand.

iii) Deciders: Family members who have the power to unilaterally or jointly decide
whether or not to buy a product or service. The husband and wife may jointly decide
about the purchase of a new refrigerator.

iv) Buyers: Those family members who actually buy a particular product or service. A
housewife may be the person who actually buys all the foodstuffs, rations and
toiletries which are consumed by all the family members.

v) Preparers: Those family members who transform or prepare the product into the
form in which it is actually consumed. The housewife may prepare the family meal
using raw vegetables, lentils, spices, oil and other ingredients.

vi) Users: Those family members who use or consume a particular product or service.
All family members may use the car, watch the television, listen to the stereo music
system.

The roles played by different family members will vary from product to product. While
shopping in the market, a housewife comes across a new variety of squash which she buys
for the family. Her decision to purchase does not directly involve the influence of other
family members. She is the decider, buyer, she may or may not be the preparer and is not the
only user.

In case of products such as television, car, music systems, furniture or any such product
which is likely to be used by some or all the family members, the purchase decision is likely
to be a joint or group decision (with participation of some or all family members). Figure IV
shows a model of family decision-making.

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 Figure IV: A Model of Family Decision Making

The left side of the model diagram shows the separate psychological predispositions of the
father, mother and other family members which lead to "Family buying decision" which may
be either individually or jointly made.

Whether a decision will be made individually or jointly is affected by (i) social class,

(ii) Life-style, (iii) role orientation, (iv) family life-cycle stage, (v) perceived risk, (vi)
product importance, and (vii) time pressure. Decisions are more likely to be made jointly in
middle class, closely-knit families or in case of newly married couples. Also, when the
product under consideration is thought to be important to the family, when the perceived risk
associated with it is high and there is ample time to make the decision.

40
Now let’s once again catch up Mr. Rao who is being assigned the task of purchasing desk
tops for the organisation is associated with. As already mentioned purchasing for on behalf of
the organisation is called as Organisation Buying Behaviour (OBB).

4. 17 WHAT IS ORGANISATIONAL BUYING BEHAVIOUR

Let’s start the discussion with the definitions to understand and appreciate the organisational
buying process.

According to Pette D. Bennett, “Organizational buying behavior is the decision making

process by which a buying group establishes the needs for goods and services and
identifies, evaluate, and chooses among alternative brand and suppliers.”

According to W. M. Pride and O. C. Ferrel, “Organizational buying behavior refers to the

purchase behavior of producers, government units, institutions and resellers.”
Thus it’s evident from the above definitions that Organizational Buying Behaviour is a
complex decision-making and communication process involving selection and procurement
of product and services by organizational buyers.

While organizational behavior refers to the buying behavior of organizations that buy
products for business use, resell or to make other products. These organisations include other
businesses, industries, retailers etc. Similarly, government bodies buy goods for office and
conducting development program. Non-governmental organizations, hospitals, educational
institutes, social organizations, religious organizations etc. buy goods to provide services to
their clients or customers.

4.18 ORGANISATIONAL BUYING PROCESS

Organizational buying behaviour or buying process refers to the process of how companies or
organizations buy goods and services. Organizational Buying is not an easy task as perceived
by most people. On the contrary it is a complex process and procedure involving critical
external and internal factors and more importantly the participation of people of varied
positions and their experiences at all stages of buying process.
Organizational buying processes include eight stages. In practice the organization may go
through all of these stages sequentially or it may change some of them. This depends on
buying quantity, buying price, nature of goods, buying frequency etc.

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1. Need or Problem Recognition

The first stage of need recognition starts with someone in the company recognises a need or a
problem that can be met by acquiring a good or service. Needs could be recognized in two
ways. They are: external stimuli and internal stimuli. If a company decides to produce new
goods, it is internal stimuli. It needs to buy new goods and equipment. Similarly, when a
buyer observes trade exhibition, s/he may make his/her idea to buy new goods. Such idea is
external stimuli, because this idea is made from outer environment and materials should be
purchased for this.

2. Need Description

Once the need is recognized, the buying company should describe the general characteristics
and quantity of a needed item. If the items are of standard nature this task becomes easy
otherwise in case of customised items then the help o f engineers, users and consultants
should be taken for such items.

3. Product Specification

At this stage of the buying process the task of buying organization decide on the item/product
and specify the best technical product characteristics for the required item. If need arise
technician’s help should be taken for the task.

4. Supplier Search

At this stage of organizational buying process, the buyer searches for the best vendor or
supplier for the intended item and prepare a list of suppliers to decide upon for order
placement. This list is prepared by looking at trade directory, searching in Internet, asking
other companies for suggestions etc. If the goods to be bought are new, complicated and
costly, it needs long time to search suppliers.
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5. Proposal Solicitation

Proposal solicitation is the fifth stage of organizational buying process signifying the
invitation to qualified suppliers to submit their proposals. As customary some send
catalogue or sellers to the organization. If the product is costly and complicated, the buyer
seeks a detailed proposal, and if the product is technical, business organization calls for
presenting the product itself.

6. Supplier Selection

At the sixth stage of organizational buying process, buyers review and assess the proposal
and select one or more suppliers. For selecting the suppliers, a list is prepared and rating is
made on the basis of their attribute and importance. Then the best supplier is selected.

7. Order Routine Specification

This stage is characterised by the selection of the best suppliers. The buying firm writes the
final order with the chosen suppliers, listing the technical specifications; quantity needed, and
expected time of delivery, return policies and warranties which should be clearly mentioned

8. Performance Review

This is the last stage of organizational buying. The buyer reviews suppliers’ performance
which helps to take decision whether to continue the relation with the supplier or change or
end the relation. If the performance of the supplier is satisfactory, the relation can be
continued; if it is somewhat defective, if partial correction is made and the relation is
maintained. But if the performance is disagreeable then the association will be discontinued.

4.19 FACTOR AFFECTING ORGANISATIONAL BUYING

Similar to various factors that affect consumer buying process the organisational buying
process does also get affected both external as well as internal factors. We will now discuss
the factors which may directly or indirectly influence the organisational buying behaviour.

I. Environmental Factors
Environment factors affect organizational buying behavior. This includes economic,
technological, political-legal, social responsibility and competition.

• Economic factors affect organizational buying behavior.The level of demand includes

capacity and desire for buying goods. This is affected by income distribution and
price of product. While economic health constitutes prosperity, recession and

43
 recovery.

• Technological factors also affect organizational behavior. This includes level and
pace of technology, technology transfer etc. E-commerce as well as information
technology has got revolutionary change.

• Political and legal factors do affect organizational buying process directly. Political
factors include political system, political situation, and political thought, government
policies etc. While constitution, laws, rules and regulations etc. are included in legal
factors.

• A business organization should consider social responsibility while buying any goods
or services. Indigenous goods should be given preference in buying and interest of
society should be protected. Interest of different pressure group of the society also
should be considered while buying goods or services.

• Competition is no exception it affects buying behavior. This competition includes

pure competition, monopolistic competition and oligopoly competition.

II. Organizational Factors

Organizational factors also affect organizational buying behavior. This includes objectives,
policies, procedures, organizational structure and system.

 Buying objective is determined according to organizational goal. Goods should be

purchased according to organizational objective. As goods or services need to be
purchased according to organizational goal, buying is affected by objective.

 Purchasing or buying policy also effects organizational buying behavior. Goods

should be purchased according to buying policy of the organization. If the
organization has the policy of buying indigenous goods, the buyer cannot buy foreign
goods. If the purchasing policy is silent in this matter, whichever goods, foreign or
indigenous, can be purchased as desired.

 The methods and process adopted by an organization to buy goods or services is

called procedure. Goods or services can be purchased directly through agreement, or
through tender, demanding catalog etc. Any of the method can be adopted to buy
goods or services. Whichever procedure the organization has adopted, the buyer
should follow it.

 Organizational structure defines authority and relations which directly affects buying
behavior. In some organizations, goods or services are purchased by direct order
of chief executive while in some other organizations, goods or services are bought

44
 through purchase department. So, buying behavior is affected by organizational
structure.

 Purchasing system also directly affects buying behavior. An organization

can adopt any one or more such as centralized system, decentralized system, huge
quantity purchase system and others.

III. Interpersonal Factors

Interpersonal factors also affect buying behavior. This includes authority, status, interest etc.

• The personnel whom the organizational structure gives authority to order for
purchase, no goods can be purchased without his order. Buying decision of such
authority plays an important role in buying.

• The persons to purchase goods or services and to give order for purchase may be
different in an organization. As much the behavior of the person issuing purchase
order affects behavior of the buyer. If the status or level of the buyer is high, his
buying decision becomes rational and quick. His/her behavior becomes mature.

• Users, influencers, buyers, decider and gate keeper are involved in organizational
buying process. Their interest affects organizational buying process. As their interest
becomes different, buying process may be complicated.

IV. Personal Factors

Personal factors also affect buying behavior. This includes age of person, education, level of
job, personality etc.

 Age of person also affects selection and priority. Younger persons make
buying decision and supplier selection quicker than older aged persons. Similarly, the
younger persons try to find new suppliers whereas older persons try to give
continuation to the same who is supplying. So this also affects buying process.

 Education makes person able to analyze good or bad. So, an educated person takes
buying decision rationally whereas uneducated person makes buying decision at hit
and miss or hunch. Educated person selects goods or services carefully. So, buyer’s
education also affects organizational buying behavior.

 Job position also shows a person’s status. Buyer’s position or status also affects his
buying behavior. Buyer’s status may be low or high.

45
  Personality of person working in an organization may be different. Personality affects
selection of quality, brand, price etc. So, buyer’s personality also affects
organizational buying behavior.

 Risk bearing capacity of men becomes different. Some can bear more risk and others
like to take less risk. Similarly, some like to avoid risk and some others like to face.
The capacity and attitude to bear risk also affect buying behavior. The buyers having
the capacity to take high risk become aggressive. But those having less risk bearing
capacity and having no risk bearing capacity do not do so.

Figure 3: Major Factors on Organizational Buying Behaviour

4.20 SUMMARY

Consumer behaviour is the study of why, how, what, when, where, and how often do
consumers buy and consume different products and services.
Knowledge of consumer behaviour is helpful to the marketer in understanding the needs of
his different consumer segments and developing appropriate marketing strategies for each. It
is also useful for the marketer in developing an understanding of, how consumers respond to
the various marketing stimuli, which he provides in terms of the product, price, promotion
and place. If the marketer can correctly identify those stimuli that evoke a positive response
in the consumer he can very easily design effective marketing strategies using these stimuli.
The study of consumer behaviour also provides an insight into how consumers arrive at the
purchase decision and the variable which influences their decision helps in positive purchase
decision.
A consumer's decision to purchase a product is influenced by a number of variables which
can be classified into four categories, namely psychological, personal, social, and cultural. In
addition consumer behaviour is influenced by his motives, perceptions, attitudes and learning.

46
For the marketer it is essential to associate his product with the motives and positive
perceptions of his consumers. Also he must ensure that the product concept fits in with the
consumer's existing attitudes and beliefs.
Consumers differ from one another in terms of their sex, age, education, income, family life-
cycle stage, personality and life style, and other personal characteristics which influence their
buying behaviour. To successfully market to consumers with differing personal
characteristics, the marketer must accordingly modify his marketing, strategies.
Culture is the most pervasive influence on our lives and influences all aspects of our
behaviour; consumers operate within the cultural framework of their society and purchase
only those products which fit in with their cultural norms. While social classes are group of
people who have similar income, education, wealth, social -status, value and beliefs. The
marketer must understand that people with different cultural, sub-cultural and social class
background have different product and brand preferences and need suitably modified
products and marketing strategies.
A decision refers to the selection of a particular alternative out of the several available
alternatives. The process by which consumers arrive at a decision can be explained with the
help of a model comprising an input, process and output. Input refers to the marketing and
non-marketing stimuli received from the socio-cultural environment, the decision process
variables are influenced by the individual customer's own psychological characteristics
which affect his need recognition, pre- purchase information search and evaluation of
alternatives. The output of the model comprises the actual purchase and its post purchase
behaviour.
This simple model becomes increasingly complex, as the complexity of the decision-
making process increases. Three distinct types of buying decision behaviour can be
identified ranging from the rather simplified routinised response behaviour to the
increasingly complex limited problem solving and extensive problem solving. The
complexity of a decision also increases depending upon the number of people involved in
making the decision. Certain decisions are made singly while others are made jointly. This
is especially so in the context of a family situation where different family members play
different roles such as influences, decider, gatekeeper, etc. In this context, we described a
model of family buying behaviour as well as the Howard-Sheth and Engel-Blackwell-Kollat
models of individual buying behavior.
The organisational buying behaviour is a complex process in decision making. A variety of
influences and factors add to its complexity. Questions such as
How does an organisation buy?

Who takes the buying decisions in an organisation?

What factors influence the buying behaviour of an organisation?

What evaluation criteria are used to select the vendors?

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4.21 KEYWORDS

Motivation: Strong, unfulfilled need which spurs a person to take action for his satisfaction.
Perception: Process of selection, organisation and interpretation of stimuli into cohesive,
coherent picture.
Stimulus: An input to any one of the five senses.
Attitudes: Enduring and learned tendencies to act in a particular consistent way with regard
to a given object or idea.
Belief: A descriptive thought that an individual has about a product, service, idea or practice.
Learning: Process of applying results of past experiences to evaluate a new situation or
modify future behaviour.
Demographics: Objective and easily measurable characteristics of a population such as age,
income, education, occupation, sex and marital status.
Psychographics: The technique of measuring life-styles using psychographic characteristics
such as attitudes, opinions, and interests.
Life-Style: An individual's pattern of living in the world as expressed by the manner in which
he spends money and time on various activities and interests, and the opinion that he holds.
Reference group: A group that serves as a point of reference or comparison for an individual
in the matter of forming value, attitudes or behaviour.
Sub-culture: ‘Culture within a culture’; distinct groups of people grouped on the basis of
nationality, religion, geographic region or race and having their own distinct motives, values
and behaviour patterns.
Social Class: Division in a society comprising people sharing same social status, values,
beliefs, attitudes, and exhibiting a distinct preference for certain products and brands.
Diffusion of Innovation: Process by which the acceptance of an innovation (or product,
service, idea) is spread by communication to members of a society and the adoption of the
innovation in terms of actual purchase of the product.

Decision: A choice made from among several possible alternatives.

Evaluation of alternatives: A stage in the consumer decision-making process in which the
consumer appraises the advantages and disadvantages from each of the product/brand
alternatives, so that the choice may be narrowed down.
Extensive Problem Solving: An exhaustive search by the consumer to establish the
necessary product criteria to enable him to knowledgeably evaluate and select the most
suitable product to fulfil his needs.
Gatekeeper: Family member who controls flow of information about a product/brand thus
influencing the family's decision-making.

48
Influencer: Family member who provides information and advice to other family members
thereby influencing their decision-making.
Joint decisions: Decisions which are made with the active participation of two or more
individuals, joint decision occur most commonly in the context of families and organisation.
Limited Problem Solving: A search by a consumer for a product that will satisfy his basic
criteria from among a selected group of brands.
Model: A simplified representation of reality to show the relationship between various
elements of a system or process.
Post-purchase dissonance: The discomfort or dissatisfaction which a consumer feels after
having made the purchase, especially when the gap between expected and actual
performance of the product is very large.
Pre-purchase search: A stage in the consumer decision-making process in which the
consumer actively seeks out information concerning product alternatives that will satisfy his
unfulfilled need.
Buying Centre: It comprises of members, who are directly or indirectly connected with the
organizational buying decisions. The different roles are :
Users. Individuals who actually use the product-service package. They are sometimes also
defined as `indentors' or 'specifiers'.

Deciders. Individuals who are entrusted with the responsibility of making the buying
decision. This category can include ad hoc purchase committees.

Specifiers. Those individuals who develop and finalise the product's technical specifications.

Buyers. Individuals who are entrusted with the. act of formalising the final order and the
commercial terms and conditions. They are normally executives of the purchase department.

4.22 SELF-ASSESSMENT QUESTIONS

Choose five magazines or newspaper advertisements for different consumer goods. Study the
advertising appeal in each advertisement and identify which need(s) each product is supposed
to satisfy (according to Maslow's hierarchy of needs).

Name and describe the different types of groups that may have influenced your behaviour in
terms of making a decision:

To buy a particular brand of Smart phone

To choose a school/college for your child

To buy a Laptop or Computer Furniture for your office use.

If you are invited to someone's home for the first time, what factors would you consider in
making an estimation of their social class?
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Give an example from your own experience of each of the following types of cultural learning:

a) formal `learning
b) informal learning
c) technical learning

Discuss the importance of sub-cultures in segmenting the Indian market for food products.
Divide India into four regions comprising North, South, West and East and then proceed
further.

1. Identify three different products that you think would require a great deal of pre-
purchase search by a consumer. Assume that you are the buyer for these products.
Identify the very specific external sources of information you would tap in your
search.
2. Describe a recent purchase you have made in terms of the model described in Figure
I.
3. A consumer is at the evaluation stage of the buyer decision process when considering
the choice of retail outlet for buying a refrigerator. What factors do you think most
consumers would rank as `most important' in their choice of outlet?
4. Apply the six different roles which family members play in the context of the
following decisions:
i) deciding the restaurant on a weekend outing
ii) buying a gift for a close relative on the occasion of House warming ceremony
iii) buying a pair of denim(casual wear) for the wife
Assume that the family comprises husband, wife, a 15 year old son, a 11 year old daughter
and a 67 year old grand-mother.
5. With a suitable example explain what do you understand by the term organizational
buying behavior?
6. Discuss the stages involved in the organizational buying process.
7. What are the factors that affect organizational buying process? Elaborate the
importance of each of the factor in process of buying activity.

4.23 FURTHER READINGS

Schiffman, Leon G., and Kanuk, Leslie Lazar, 6th edition Consumer Behaviour, Prentice-
Hall of India, New Delhi

Kotler, Philip, 2002 Marketing Management, Prentice-Hall of India Private Limited, New
Delhi

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