CONSUMER

BEHAVIOUR
Dr. Ankita Bhardwaj
Outline
◦ Introduction to Consumer Behaviour
◦ Model of Consumer Behaviour
◦ Factors influencing Buyer Behaviour - Cultural, social and personal
◦ Psychographic Process/factors
◦ Motivation - Marketing applications of Maslow’s theory
◦ Perception - Perceptual process in marketing)
◦ Attitude - Multi-attribute Attitude Model
◦ Integration – compensatory and non-compensatory, Heuristics
◦ Learning - Marketing examples of Classical and instrumental conditioning
◦ Emotions and Memory
◦ Buying Habits/Shopping Behaviour
◦ Stages Consumer goes through
◦ Consumer Behaviour in adopting New Products – Individual Differences and innovation adoption model
◦ Participants in Buying Decision – Buying Roles
Introduction to Consumer Behaviour
◦ Consumer Behaviour is the study of how individual customers, groups or organizations
select, buy, use, and dispose ideas, goods, and services to satisfy their needs and
wants. It refers to the actions of the consumers in the marketplace and the underlying
motives for those actions
◦ Engel, Blackwell, and Mansard, “Consumer Behaviour is the actions and decision
processes of people who purchase goods and services for personal consumption”
◦ A consumer’s buying behavior is influenced by cultural, social, and personal factors.
Psychographic
Process/factors

◦ The starting point for

understanding consumer
behavior is the stimulus-
response model.
◦ Marketing and
environmental stimuli
enter the consumer’s
consciousness, and a set
of psychological
processes combine with
certain consumer
characteristics to result in
decision processes and
purchase decisions.
 ◦ Consumer Behaviour Roles

Role Description
Initiator Initiator is the individual who determines that some need or want is not
being fulfilled and authorizes a purchase to rectify the situation.
Gatekeeper Influences the family’s processing of information. The gatekeeper has the
greatest expertise in acquiring and evaluating the information
Influencer Influencer is a person who, by some intentional or unintentional word or
action, influences the buying decision, actual purchase and/or the use
of product or service
Decider The person or persons who actually determine which product or service will
be chosen.
Buyer Buyer is an individual who actually makes the purchase transaction
User(s) User is a person most directly involved in the use or consumption of the
purchased product.
◦ Cultural Factors
◦ Culture: Culture is the set of basic values, perceptions, wants and behaviours learned by a
member of society from family and other important institutions. Basically, culture is the part of
every society and is the important cause of individual wants and behavior. The influence of
culture on buying behavior varies from country to country therefore marketers have to be very
careful in analyzing the culture of different groups, regions or even countries.
◦ Subculture: Each culture contains different subcultures such as religions, nationalities,
geographic regions, racial groups etc. Marketers can use these groups by segmenting the
market into various small portions. Marketers can design products according to the needs of a
particular sub-cultural group.
◦ Social class: Social class refers to the hierarchical arrangement of the society into various
divisions, each of which signifies social status or standing. Social class is an important
determinant of consumer behavior as it affects consumption patterns, lifestyle, media patterns,
activities and interests of consumers.
◦ Social Factors
◦ Reference Groups
◦ A person’s reference groups are all the groups that have a direct (face to- face) or indirect influence on their
attitudes or behavior. Groups having a direct influence are called membership groups. Some of these are primary
groups with whom the person interacts fairly continuously and informally, such as family, friends, neighbors, and
coworkers.
◦ People also belong to secondary groups, such as religious, professional, and trade-union groups, which tend to be
more formal and require less continuous interaction.
◦ Reference groups influence members in at least three ways. They expose an individual to new behaviors and
lifestyles, they influence attitudes and self-concept, and they create pressures for conformity that may affect
product and brand choices. People are also influenced by groups to which they do not belong.
◦ Aspirational groups are those a person hopes to join; dissociative groups are those whose values or behavior an
individual rejects.
◦ Where reference group influence is strong, marketers must determine how to reach and influence the
group’s opinion leaders. An opinion leader is the person who offers informal advice or information about
a specific product or product category, such as which of several brands is best or how a particular
product may be used.
◦ Social Factors
◦ Family: Buyer behavior is strongly influenced by the member of a family. Therefore marketers are trying to
find the roles and influence of the husband, wife and children. If the buying decision of a particular
product is influenced by wife then the marketers will try to target the women in their advertisement. Here
we should note that buying roles change with change in consumer lifestyles.
◦ The family of orientation consists of parents and siblings. From parents a person acquires an orientation toward
religion, politics, and economics and a sense of personal ambition, self-worth, and love.
◦ The family of procreation—namely, the person’s spouse and children
◦ Roles and Status: Each person possesses different roles and status in the society depending upon the
groups, clubs, family, organization etc. to which he belongs. The social role and status profoundly
influences the consumer behavior and his purchasing decisions.
◦ A role consists of the activities a person is expected to perform
◦ Personal Factors-
◦ Personal characteristics that influence a buyer’s decision include age and stage in the life
cycle, occupation and economic circumstances, personality and self-concept, and lifestyle and
values.
 Age and stage in lifecycle: Age and life-cycle have potential impact on the consumer buying behavior.
Consumers change the purchase of goods and services with the passage of time. Family life-cycle consists of
different stages such as childhood, bachelorhood, newly married couple, parenthood etc. which help marketers
to develop appropriate products for each stage.
 Occupation: The occupation of a person has significant impact on his buying behavior. For example a
marketing manager of an organization will try to purchase business suits, whereas a low level worker in the same
organization will purchase rugged work clothes.
 Personality and Self-concept: personality, is a set of distinguishing human psychological traits that lead
to relatively consistent and enduring responses to environmental stimuli. It can be called as traits such as self-
confidence, dominance, autonomy, deference, sociability, defensiveness, and adaptability.
◦ Brands also have personalities, and consumers are likely to choose brands whose personalities match their own
◦ Sincerity (down-to-earth, honest, wholesome, and cheerful)
◦ Excitement (daring, spirited, imaginative, and up-to-date)
◦ Competence (reliable, intelligent, and successful)
◦ Sophistication (upper-class and charming)
◦ Ruggedness (outdoorsy and tough)
◦ Lifestyle and Values-A lifestyle is a person’s pattern of living in the world as expressed
in activities, interests, and opinions. It portrays the “whole person” interacting with his or
her environment. Marketers search for relationships between their products and lifestyle
groups. A computer manufacturer might find that most computer buyers are achievement-
oriented and then aim the brand more clearly at the achiever lifestyle
◦ Lifestyles are shaped partly by whether consumers are money constrained or time constrained
◦ LOHAS-lifestyles of health and sustainability
Psychographic
Process/factors

◦ The starting point for

understanding consumer
behavior is the stimulus-
response model.
◦ Marketing and
environmental stimuli
enter the consumer’s
consciousness, and a set
of psychological
processes combine with
certain consumer
characteristics to result in
decision processes and
purchase decisions.
Psychological Processes
◦ Some needs are biogenic; they arise from physiological states of tension such as
hunger, thirst, or discomfort.
◦ Other needs are psychogenic; they arise from psychological states of tension such as
the need for recognition, esteem, or belonging. A need becomes a motive when it is
aroused to a sufficient level of intensity to drive us to act.
◦ Motivation has both direction—we select one goal over another—and intensity—we
pursue the goal with more or less vigor.
◦ Need>Wants>Demand
Motivation
◦ FREUD’S THEORY
◦ Sigmund Freud assumed the psychological forces shaping people’s behavior are largely
unconscious, and that a person cannot fully understand his or her own motivations.
◦ Someone who examines specific brands will react not only to their stated capabilities, but also
to other, less conscious cues such as shape, size, weight, material, color, and brand name.
◦ A technique called laddering lets us trace a person’s motivations from the stated instrumental
ones to the more terminal ones. Then the marketer can decide at what level to develop the
message and appeal
◦ Laddering refers to an in-depth, one-on-one interviewing technique used to develop an understanding of
how consumers translate the attributes of products into meaningful associations with respect to self
◦ Various projective techniques such as word association, sentence completion, picture interpretation are
used.
◦ Human needs are arranged in a
hierarchy from most to the least
pressing—physiological needs, safety
needs, social needs, esteem needs, and
self-actualization
◦ People will try to satisfy their most
important need first and then try
to satisfy the next most important.
◦ Example a starving man (need 1) will
not take an interest in the latest
happenings in the art world (need 5),
nor in how he is viewed by others (need
3 or 4), nor even in whether he is
breathing clean air (need 2), but when
he has enough food and water, the
next most important need will become
salient.
Maslow’s Theory
Perception
◦ A motivated person is ready to act—how is influenced by his or her perception of the
situation. In marketing, perceptions are more important than reality, because
perceptions affect consumers’ actual behavior.
◦ Perception is the process by which we select, organize, and interpret information inputs
to create a meaningful picture of the world.
◦ One person might perceive a fast-talking salesperson as aggressive and insincere; another,
as intelligent and helpful. Each will respond to the salesperson differently.
◦ People emerge with different perceptions of the same object because of three
perceptual processes: selective attention, selective distortion, and selective retention
What do you
see?
◦ SELECTIVE ATTENTION
◦ Attention is the allocation of processing capacity to some stimulus. Voluntary attention is something
purposeful; involuntary attention is grabbed by someone or something.
◦ It’s estimated that the average person may be exposed to over 1,500 ads or brand communications a
day.
◦ Because we cannot possibly attend to all these, we screen most stimuli out —a process called
selective attention. Selective attention means that marketers must work hard to attract consumers’
notice. The real challenge is to explain which stimuli people will notice. Here are some findings:
◦ 1. People are more likely to notice stimuli that relate to a current need. A person who is motivated to buy a
computer will notice computer ads and be less likely to notice DVD ads.
◦ 2. People are more likely to notice stimuli they anticipate. You are more likely to notice computers than radios in
a computer store because you don’t expect the store to carry radios.
◦ 3. People are more likely to notice stimuli whose deviations are large in relationship to the normal size of the
stimuli. You are more likely to notice an ad offering $100 off the list price of a computer than one offering $5 off.
◦ Though we screen out much, we are influenced by unexpected stimuli, such as sudden offers in
the mail, over the phone, or from a salesperson. Marketers may attempt to promote their
offers intrusively in order to bypass selective attention filters.
SELECTIVE DISTORTION
◦ Even noticed stimuli don’t always come across in the way the senders intended. Selective distortion is the
tendency to interpret information in a way that fits our preconceptions. Consumers will often distort
information to be consistent with prior brand and product beliefs and expectations.
◦ Selective distortion can work to the advantage of marketers with strong brands when consumers distort
neutral or ambiguous brand information to make it more positive. In other words, coffee may seem to taste
better, a car may seem to drive more smoothly, the wait in a bank line may seem shorter, depending on
the brand.

◦ SELECTIVE RETENTION
◦ Most of us don’t remember much of the information to which we’re exposed, but we do retain information
that supports our attitudes and beliefs. Because of selective retention, we’re likely to remember good points
about a product we like and forget good points about competing products. Selective retention again
works to the advantage of strong brands. It also explains why marketers need to use repetition—to make
sure their message is not overlooked.
◦ SUBLIMINAL PERCEPTION
◦ Selective attention mechanisms require active engagement and thought on the part of the consumer.
Marketers embed covert, subliminal messages in ads or packaging that consumers are not consciously
aware of but that affect their behavior. Although it’s clear that mental processes include many subtle
subconscious effects, no evidence supports the notion that marketers can systematically control consumers
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at that level, especially enough to change strongly held or even moderately important beliefs
 Learning
◦ Learning induces changes in our behavior arising from experience. Most human behavior is learned,
although much learning is incidental. Learning theorists believe learning is produced through the
interplay of drives, stimuli, cues, responses, and reinforcement.
◦ Learning theory teaches marketers that they can build demand for a product by associating it with
strong drives, using motivating cues, and providing positive reinforcement
◦ A drive is a strong internal stimulus impelling action. Cues are minor stimuli that determine when, where, and how a
person responds.
◦ Suppose you buy an HP computer. If your experience is rewarding, your response to computers and HP will be
positively reinforced. Later, when you want to buy a printer, you may assume that because it makes good
computers, HP also makes good printers. In other words, you generalize your response to similar stimuli. A
countertendency to generalization is discrimination. Discrimination means we have learned to recognize differences
in sets of similar stimuli and can adjust our responses accordingly.
◦ Approaches to learning :
◦ Classical conditioning and
◦ Operant (instrumental) conditioning
◦ Classical Conditioning is a theory of psychology that refers to learning through repetition. Its ultimate goal is to
create a spontaneous response to a particular situation by repeatedly exposing a subject (consumer) to a
specific stimuli (a brand, product, or service)
◦ Pavlov was the Russian physiologist who trained his dogs to associate the ringing of a bell with food. After a while, he
recorded that his dogs would salivate when they heard the bell, even without food. Today, his theories are referred to
as classical conditioning.
◦ Example
◦ Instrumental conditioning is another term for operant conditioning, a learning process first described by B. F.
Skinner. In instrumental conditioning, reinforcement or punishment are used to either increase or decrease the
probability that a behavior will occur again in the future.
◦ Reinforcement serves to increase the behavior, while punishment serves to decrease the behavior.
 Emotions and Memory
◦ Emotions- Consumer response is not all cognitive and rational; much may be emotional and invoke different kinds
of feelings. A brand or product may make a consumer feel proud, excited, or confident. An ad may create
feelings of amusement, disgust, or wonder.
◦ Memory- Cognitive psychologists distinguish between short-term memory (STM)—a temporary and
limited repository of information—and long-term memory (LTM)—a more permanent, essentially unlimited
repository. All the information and experiences we encounter as we go through life can end up in our long-term
memory.
◦ The associative network memory model views LTM as a set of nodes and links. Nodes are stored information connected by links
that vary in strength. Any type of information can be stored in the memory network, including verbal, visual, abstract, and
contextual
◦ A spreading activation process from node to node determines how much we retrieve and what information we can actually
recall in any given situation
◦ Consumer brand knowledge as a node in memory with a variety of linked associations.
◦ Brand associations consist of all brand-related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes, and so on
that become linked to the brand node
◦ MEMORY PROCESSES
◦ Memory is a very constructive process, because we don’t remember information and events
completely and accurately. Often we remember bits and pieces and fill in the rest based on
whatever else we know
◦ Memory encoding describes how and where information gets into memory. The strength of
the resulting association depends on how much we process the information at encoding
(how much we think about it, for instance) and in what way
◦ The more attention we pay to the meaning of information during encoding, the stronger
the resulting associations in memory will be
◦ Memory retrieval is the way information gets out of memory.
◦ The presence of other product information in memory can produce interference effects
and cause us to either overlook or confuse new data.
◦ The time between exposure to information and encoding has been shown generally to
produce only gradual decay
◦ Information may be available in memory but not be accessible for recall without the
proper retrieval cues or reminders
Consumer Behaviour Model/
Consumer Decision Making Process
◦ Problem Recognition
◦ The buying process starts when the buyer recognizes a problem or need is triggered by
internal or external stimuli. With an internal stimulus, one of the person’s normal needs—
hunger, thirst, rises to a threshold level and becomes a drive.
◦ [Link] , example
◦ A need can also be aroused by an external stimulus. A person may admire a friend’s new
car or see a television ad for a Hawaiian vacation, which inspires thoughts about the
possibility of making a purchase.
◦ Example
◦ Marketers need to identify the circumstances that trigger a particular need by gathering
information from a number of consumers.
◦ Particularly for discretionary purchases such as luxury goods, vacation packages, and
entertainment options, marketers may need to increase consumer motivation so
a potential purchase gets serious consideration.
◦ Information Search
◦ Consumers often search for limited amounts of information. Surveys have shown that for
durables, half of all consumers look at only one store, and only 30 percent look at
more than one brand of appliances.
◦ We can distinguish between two levels of engagement in the search.
◦ The milder search state is called heightened attention. At this level a person simply
becomes more receptive to information about a product.
◦ At the next level, the person may enter an active information search: looking for
reading material, phoning friends, going online, and visiting stores to learn about the
product
◦ Information Sources to which consumers will turn to fall into four groups:
• Personal. Family, friends, neighbors, acquaintances
• Commercial. Advertising,Web sites, salespersons, dealers, packaging, displays
• Public. Mass media, consumer-rating organizations
• Experiential. Handling, examining, using the product
◦ SEARCH DYNAMICS
By gathering
information, the
consumer learns
about
competing brands
and their features
◦ Total set
◦ Awareness set
◦ Consideration set
◦ Choice set
◦ Decision

◦ Other criteria
◦ Market Partitioning : Marketers need to identify the hierarchy of attributes that guide
consumer decision-making
◦ Brand-dominant hierarchy (General Motors, VW)
◦ Nation-dominant hierarchy
◦ Type/price/ dominant hierarchy
◦ Evaluation of Alternatives
◦ How does the consumer process competitive brand information and make a final value
judgment? No single process is used by all consumers, or by one consumer in all buying
situations. There are several processes, and the most current models see the consumer
forming judgments largely on a conscious and rational basis.
◦ Some basic concepts will help us understand consumer evaluation processes: First, the
consumer is trying to satisfy a need. Second, the consumer is looking for certain benefits from
the product solution. Third, the consumer sees each product as a bundle of attributes with
varying abilities to deliver the benefits. The attributes of interest to buyers vary by product—
for example:
1. Hotels— Location, cleanliness, atmosphere, price
2. Mouthwash—

◦ A belief is a descriptive thought that a person holds about something

◦ Attitudes, a person’s enduring favorable or unfavorable evaluations, emotional
feelings, and action tendencies toward some object or idea. People have attitudes
toward almost everything: religion, politics, clothes,music, food. Attitudes put us into
a frame of mind: liking or disliking an object, moving toward or away from it
◦ [Link]
◦ EXPECTANCY-VALUE MODEL (COMPENSATORY MODELS OF CONSUMER CHOICE)

◦ The consumer arrives at attitudes toward various brands through an attribute evaluation procedure,
developing a set of beliefs about where each brand stands on each attribute. The expectancy-value
model of attitude formation posits that consumers evaluate products and services by combining their
brand beliefs—the positives and negatives—according to importance.
◦ Strategies to Stimulate Attitude
• Redesign the product. This technique is called real repositioning.
•Alter beliefs about the brand. Attempting to alter beliefs about the brand is called psychological repositioning.
•Alter beliefs about competitors’ brands. This strategy, called competitive depositioning, makes sense when
buyers mistakenly believe a competitor’s brand has more quality than it actually has.
•Alter the importance weights. The marketer could try to persuade buyers to attach more importance to the
attributes in which the brand excels.
•Call attention to neglected attributes. The marketer could draw buyers’ attention to neglected attributes, such
as styling or processing speed.
•Shift the buyer’s ideals. The marketer could try to persuade buyers to change their ideal levels for one or more
attributes
◦ Purchase Decision
◦ In the evaluation stage, the consumer forms preferences among the brands in the
choice set and may also form an intention to buy the most preferred brand. In
executing a purchase intention, the consumer may make up to five sub-decisions:
brand (brand A), dealer (dealer 2), quantity (one computer), timing (weekend), and
payment method (credit card).

◦ NONCOMPENSATORY MODELS OF CONSUMER CHOICE

◦The expectancy-value model is a compensatory model, in that perceived good things
about a product can help to overcome perceived bad things. But consumers often take
“mental shortcuts” called heuristics or rules of thumb in the decision process.
◦ With non-compensatory models of consumer choice, positive and negative
attribute considerations don’t necessarily net out. Evaluating attributes in isolation
makes decision making easier for a consumer, but it also increases the likelihood
that she would have made a different choice if she had deliberated in greater
detail. We highlight three choice heuristics here.

1. Using the conjunctive heuristic, the consumer sets a minimum acceptable cutoff level for
each attribute and chooses the first alternative that meets the minimum standard for all
attributes. For example, if Linda decided all attributes had to rate at least 5, she would
choose laptop computer B.
2. With the lexicographic heuristic, the consumer chooses the best brand on the basis of its
perceived most important attribute.
[Link] the elimination-by-aspects heuristic, the consumer compares brands on an
attribute selected probabilistically—where the probability of choosing an attribute is
positively relate to its importance—and eliminates brands that do not meet minimum
acceptable cutoffs.
◦ INTERVENING FACTORS Even if consumers form brand evaluations, two general
factors can intervene between the purchase intention and the purchase
decision.
◦ The first factor is the attitudes of others.
◦ The influence of another person’s attitude depends on two things:
(1) the intensity of the other person’s negative attitude toward our preferred alternative
(2) our motivation to comply with the other person’s wishes.
The more intense the other person’s negativism and the closer he or she is to us, the more we will
adjust our purchase intention. The converse is also true.

◦ Unanticipated situational factors

A consumer’s decision to modify, postpone, or avoid a purchase decision is heavily
influenced by one or more types of perceived risk:
1. Functional risk—The product does not perform to expectations.
2. Physical risk—The product poses a threat to the physical well-being or health of the user or
others.
3. Financial risk—The product is not worth the price paid.
4. Social risk—The product results in embarrassment in front of others.
5. Psychological risk—The product affects the mental well-being of the user.
6. Time risk—The failure of the product results in an opportunity cost of finding another
satisfactory product.
◦ Post-Purchase Behavior
◦ After the purchase, the consumer might experience dissonance from noticing certain
disquieting features or hearing favorable things about other brands and will be alert to
information that supports his or her decision. Marketing communications should supply
beliefs and evaluations that reinforce the consumer’s choice and help him or her feel
good about the brand. The marketer’s job therefore doesn’t end with the purchase.
Marketers must monitor post-purchase satisfaction, post-purchase actions, and post-
purchase product uses and disposal.
◦ POSTPURCHASE SATISFACTION: Satisfaction is a function of the closeness between expectations and the
product’s perceived performance. If performance falls short of expectations, the consumer is disappointed; if it
meets expectations, the consumer is satisfied; if it exceeds expectations, the consumer is delighted. These
feelings make a difference in whether the customer buys the product again and talks favorably or unfavorably
about it to others.
◦ POSTPURCHASE ACTIONS A satisfied consumer is more likely to purchase the product again and will also tend to
say good things about the brand to others. Dissatisfied consumers may abandon or return the product. They
may seek information that confirms its high value. They may take public action by complaining to the company,
going to a lawyer, or complaining to other groups (such as business, private, or government agencies). Private
actions include deciding to stop buying the product (exit option) or warning friends (voice option)
◦ POSTPURCHASE USES AND DISPOSAL Marketers should also monitor how buyers use and dispose of the product.
Key driver of sales frequency is product consumption rate—the more quickly buyers consume a product, the
sooner they may be back in the market to repurchase it. Consumers may fail to replace some products soon
enough because they overestimate product life. One strategy to speed replacement is to tie the act of
replacing the product to a certain holiday, event, or time of year.