INTRODUCTION OF CONSUMER
1. Defining Consumer Behavior
2. Nature, Scope and Application of Consumer
3. Application of Consumer Behavior
4. Why Study Consumer Behavior?
5. Evolution of Consumer Behavior
6. The Interdisciplinary Nature of Consumer
Consumer Behavior may be defined as “the interplay of
forces that takes place during a consumption process,
within a consumers’ self and his environment. - this
interaction takes place between three elements viz.
knowledge, affect and behavior; - it continues through
pre-purchase activity to the post purchase experience; - it
includes the stages of evaluating, acquiring, using and
disposing of goods and services”.
1.1 The “consumer” includes both personal consumers and
Consumer behavior explains the reasons and logic that
: underlie purchasing decisions and consumption patterns; it
explains the processes through which buyers make
decisions. The study includes within its purview, the
interplay between cognition, affect and behavior that goes
on within a consumer during the consumption process:
selecting, using and disposing off goods and services.
“The behavior that consumers display in searching for,
purchasing, using, evalauting and disposing of products
and services that they expect will satisfy their needs.”
Schiffman and Kanuk
“…..the decision process and physical activity engaged in
when evaluating, acquiring, using or disposing of goods
Loudon and Bitta
OTHER “ The study of consumers as they exchange something of
value for a product or service that satisfies their needs”
DEFINI Wells and Prensky
TIONS: “Those actions directly involved in obtaining, consuming
and disposing of products and services including the
decision processes that precede and follow these actions”.
Engel, Blackwell, Miniard
“the dynamic interaction of effect and cognition, behavior
and the environment by which human beings conduct the
exchange aspects of their lives”
American Marketing Association
EVOLUTION OF CONSUMER BEHAVIOR AS A FIELD OF STUDY AND ITS
RELATIONSHIP WITH MARKETING
• The discipline finds its roots in the “marketing concept” and has
been essentially interdisciplinary in nature. As a subject it emerged
as a separate field of study in the 1960s.
• Initially the focus lay in the marketers’ attempts to study the causes
of consumer behavior; the assumption was that if they could
identify the reasons behind consumption behavior, they would be
able to predict it; and if they could predict consumer behavior, they
could influence it. So the emphasis was to predict consumer
behavior; the approach came to be known as ‘positivism’.
• Gradually, the focus of the study changed; the marketers wanted to
understand the customer better, and this approach came to be
known as ‘interpretivism’.
i The subject deals with issues related to cognition, affect and behavior
in consumption behaviors, against the backdrop of individual and
environmental determinants. The individual determinants pertain to an
individual’s internal self and include psychological components like
personal motivation and involvement, perception, learning and
memory, attitudes, self-concept and personality, and, decision making.
The environmental determinants pertain to external influences
surrounding an individual and include sociological, anthropological
NATURE and economic components like the family, social groups, reference
AND groups, social class, culture, sub-culture, cross-culture, and national
and regional influences.
ii. The subject can be studied at micro or macro levels depending upon
OF whether it is analyzed at the individual level or at the group level.
iii. The subject is interdisciplinary. It has borrowed heavily from
ER psychology (the study of the individual: individual determinants in
BEHAVI buying behavior), sociology
(the study of groups: group dynamics in buying behavior), social
OR: psychology (the study of how an individual operates in group/groups
and its effects on buying behavior), anthropology (the influence of
society on the individual: cultural and cross-cultural issues in buying
behavior), and economics (income and purchasing power).
iv. Consumer behavior is dynamic and interacting in nature. The three
components of cognition, affect and behavior of individuals alone or in groups
keeps on changing; so does the environment. There is a continuous interplay or
interaction between the three components themselves and with the
environment. This impacts consumption pattern and behavior and it keeps on
evolving and it is highly dynamic.
v. Consumer behavior involves the process of exchange between the buyer and
the seller, mutually beneficial for both.
vi. As a field of study it is descriptive and also analytical/ interpretive. It is
descriptive as it explains consumer decision making and behavior in the context
of individual determinants and environmental influences. It is analytical/
interpretive, as against a backdrop of theories borrowed from psychology,
sociology, social psychology, anthropology and economics, the study analyzes
consumption behavior of individuals alone and in groups. It makes use of
qualitative and quantitative tools and techniques for research and analysis, with
the objective is to understand and predict consumption behavior.
vii. It is a science as well as an art. It uses both, theories borrowed from social
sciences to understand consumption behavior, and quantitative and qualitative
tools and techniques to predict consumer behavior.
• Psychology: This includes the study of the individual as well as the individual
determinants in buying behavior, viz., consumer perception, learning and memory,
attitude, self-concept and personality, motivation and involvement, attitudes and
attitudinal change and, decision making.
• Sociology: This includes the study of groups as well as the group dynamics in
buying behavior, viz., family influences, lifestyles and values, and social group
• Social psychology: This includes the study of how an individual operates in
group/groups and its effects on buying behavior viz, reference groups and social
• Anthropology: This is the influence of society on the individual viz., cultural and
cross-cultural issues in buying behavior, national and regional cultures etc.
• Economics: This is the study of income and purchasing power, and its impact on
consumer behavior. The underlying premise is that consumers make rational
choices while making purchase decisions. While resourcse are limited and needs
and wants many, consumers collect information, and evaluate the various
alternatives to finally make a rational decision.
• The study of consumer behavior deals with
Scope understanding consumption patterns and behavior.
of It includes within its ambit the answers to the
Cons following: -
umer • ‘What’ the consumers buy: goods and services
Behav • - ‘Why’ they buy it: need and want
ior: • - ‘When’ do they buy it: time: day, week, month,
year, occasions etc.
• - ‘Where’ they buy it: place
• - ‘How often they buy’ it: time interval
• - ‘How often they use’ it: frequency of use
The scope of consumer behavior includes not only
the actual buyer but also the various roles played by
him/ different individuals.
Consumer Behavior as an Academic
Discipline and an Applied Science
• Factors that contributed to the growing interest
in consumer behavior:
– accelerated rate of new product development
– consumer movement
– public policy concerns
– environmental concerns
– the opening of national markets throughout
WHY STUDY CONSUMER BEHAVIOR?
The knowledge of Consumer Behavior helps the marketer understand
and predict the consumption patterns and consumption behaviors of
people. It helps them gain insights as to why a consumer behaves
differently to another consumer; as well as, why a consumer
behaves differently in different times and buying situations. The
study helps them understand the internal (individual determinants)
and external (environmental factors) forces that impel people to act
out different consumption patterns and behaviors.
The study helps the marketer in:
• a) Analyzing the environment: identifying opportunities and fighting
threats b) Segmenting, targeting and positioning
• c) Designing the marketing-mix
• d) Designing the marketing strategy
• e) Governmental and Non-profit Organization and Social Marketing
1. Define Consumer Behavior?
2. List out the individual determinants and
environmental influences that affect
3. Is the subject of Consumer Behavior
4. What are the basic components in
FA consumption behavior?
QS 5. What are the various Buying Roles.
6. Which are the various disciplines that have
contributed to the study of Consumer
7. What are the various environmental influences
that affect consumption behavior?
Fill in the blanks
1. The three interplay of forces, ------------------, affect and behavior that takes
place during a consumption process, within a consumers’ self and his
2. The “consumer” includes both personal consumers and
3. As we know that the subject consumer behavior is interdisciplinary in nature
and most of It has borrowed from--------------
4. Consumer behavior involves the process of ---------------between the buyer and
the seller, mutually beneficial for both.
Keys: 1.knowledge 2. business/industrial/organizational 3. psychology 4.
Application of Consumer Behaviour in Marketing
According to the marketing concept, the marketer should
be able to determine needs and wants of the target
segment and provide product and service offerings more
effectively and efficiently than competitors. It is
essentially a customer-centered philosophy, which aims at
understanding customer needs and wants, providing the
right product and service, and deriving customer
satisfaction; “ make what you can sell” rather than “sell
what you make.”
An understanding of the study of consumer behavior
helps formulate appropriate marketing strategies for a
firm keeping in view the consumer and his environment.
It has a number of applications; the main application bases are as follows:
Analyze the environment : The knowledge of consumer behavior can be applied to
help identify opportunities and fight threats. The opportunities could be in terms of newer
customers, newer markets, unfulfilled needs and wants (through a study of consumer
individual determinants and other environmental influences). The threats could be fought
by developing and implementing appropriate marketing strategies to best fit the
environment. The marketing strategies need to be dynamic and constantly evolving
keeping in view the uncertainty in the environment; Environmental uncertainty is a
function of complexity and dynamism. Complexity is defined in terms of the number,
strength and interrelatedness of the various factors in the environment that a firm has to
deal with. Dynamism relates to how quickly the changes take place in the environment.
Segmentation, targeting and positioning: The study of consumer behavior may be
applied to segment the market, select the target market and position the product or service
offering. Identifying the target segment, understanding their needs, providing the right
product and service offering and communicating about the offering – all of these help a
marketer succeed in the long term and ensure his survival and success in a changing
a) Segment the market: The marketer needs to identify distinct customer
groups with needs and wants, classify them on basis of descriptive
characteristics and behavioral dimensions.
The descriptive characteristics may take forms of age, gender, income,
occupation, education, family size, family life cycle, gender, lifestyle,
personality, religion, generation, geography, nationality, and social class.
The behavioral dimensions take forms of benefits, uses, use occasion, usage
rates, and loyalty status.
b) Select target market: The marketer then selects one or more markets to
enter. The segment(s) that should be targeted should be viable; there should
be a fit between the market attractiveness and the company’s objectives and
resources. The marketer would be able to assess the viability of a segment
on the basis of the following criteria, viz., measurability, substantialability,
accessibility, differentiability, and actionability.
c) Position the product offering in the mind of the customers: The
marketers should be able to communicate the distinct and/or unique product
Designing the Marketing Strategy: There exists interrelatedness between the
Consumer, the Environment and the Marketing strategy.
a) Consumer: The consumer has his needs and wants as well as product
preferences; Thus, there exists an interplay of Cognition (knowledge about
products and alternatives), Affect (feelings of favorableness and
unfavorableness) and Behavior (action: buy or not to buy).
b) Environment: This refers to forces in the environment, which make the
environment complex and dynamic.
c) Marketing strategies: This implies setting up of goals and then achieving them
through the design of an appropriate marketing mix. The Marketing Strategy
should be designed to influence consumers (Cognition, Affect and Behavior)
and be influenced by them. It should be flexible and ever evolving with
changes in the customer needs and wants; as well as, changes in the
environment in which it operates. The knowledge of consumer behavior can
be applied to develop a “best fit” between consumer needs and wants, the
environment in which the firm operates; and, the firms’ goals and objectives.
Designing the Marketing Mix (4 Ps):
a) Product: The term product includes both tangible products and intangible
services. The issues to address consist of name (brand), size, shape, features,
labeling, packaging, accessories and supplementary products, terms of sale
and services, after sales etc.
b) Price: This includes the pricing of the product offering. The major
components include, form of payment, terms and conditions of payment,
discounts, price sensitivity, differential prices and customer reaction, imagery
(price increase and customer reaction, price decrease and customer reaction).
c) Place and Distribution: This includes the marketing channel, and comprises
decisions regarding choice of channel (direct or indirect), location,
accessibility and availability of product offering, wholesaling, retailing,
d) Promotion: This includes marketing communication, and the major issues
comprise decisions on communication/promotion mix, the message and
media strategy (the content, appeal and context).
Application in Governmental and Non-profit Organizations and
The knowledge of consumer behavior finds relevance even in
Governmental and Non-profit Organizations and Social
Marketing. Governmental and Non-profit Organizations have the
society as its customers and need to understand them so as to be
able to serve them better. Social marketing involves propagation
of ideas; attempts at such circulation and spread of ideas for moral
and social upliftment can be more successful if there is a proper
understanding of the these consumers (i.e., the public and society )
FAQS(FREQUENTLY ASKED QUESTIONS)
1. As a marketer, how do you think that you can apply what you study in Consumer Behavior?
2. How has the study of Consumer Behavior evolved?
3. Is the subject of Consumer Behavior interdisciplinary? Discuss.
4. List out how the knowledge of Consumer Behavior helps a marketer in Designing the 4 Ps?
1. The study of consumer behavior is viewed as the edifice of the selling concept.
2. The knowledge of consumer behavior does not find relevance in Governmental and Non-profit
Organizations and Social Marketing
Fill up the blanks:
1. The _____________________ concept believes in “ make what you can sell” approach rather than “sell
what you make” approach.
2. Environmental uncertainty is a function of ________________ and dynamism.
3. There exists interrelatedness between the Consumer, the _________________ and the Marketing
4. During the evolution of the discipline, marketers realized that there was a need to understand the
customer better. This approach came to be known as ______________.
5. The marketer needs to identify distinct customer groups with needs and wants, classify them on basis of
descriptive characteristics and behavioral dimensions this process is known as…………….
Keys: 1.Marketing 2. complexity 3.environmental 4. interpretivism 5. Segmentation of market:
CONSUMER BUYING PROCESS OR CONSUMER DECISION MAKING PROCESS
Decision : A decision is defined as choosing an option of the few/many available.
Decision making is the process of choosing between two or more alternatives; It is
the selection of an alternative out of the few/many choices that are available.
Decision making is: a) a goal oriented process. b) it is a problem solving process:
helps take advantage of opportunities and fight threats.
Decisions Making can be of two types,
a) Programmed decision making: This is applied for problems that are routine and
regular. Such problems are simple to deal with and guidelines to sort out such
problems exist. Such decisions are made without much thought. With respect to
marketing, these are decisions related to day to day purchases or convenience and
shopping goods; these are generally low involvement purchases. They may also be
habitual in nature, and brand loyalty could easily develop. Examples: Purchases
made for staples, toiletaries etc.
b) Non-programmed decision making: This is applied for problems that arise
suddenly and are unique or novel. As the problem is sudden and novel, it is
complex and requires a lot of information gathering, deliberation and thought.
With respect to marketing, these are decisions related to infrequent purchases or
specialty goods and emergency goods; these are high involvement purchases.
Examples: Purchases made for laptops, real estate etc .
CONSUMER DECISION MAKING:
A consumer purchase is actually a response to a problem.
Consumer Decision Making pertains to making decisions
regarding product and service offerings. It may be defined as a
process of gathering and processing information, evaluating it
and selecting the best possible option so as to solve a problem or
make a buying choice.
Consumer Decision Making pertains to the following decisions:
a) What to buy: Products and Services (and the Brands?)
b) How much to buy: Quantity
c) Where to buy: Place
d) When to buy: Time
e) How to buy: Payment terms.
All purchase decisions are not similar. The effort put into each
decision making is different.
A Simplified Model of Consumer Decision
• The decision-making process can be viewed as
three interlocking stages:
– The input stage:
• marketing efforts
• sociological influences
– The process stage:
• psychological factors
– The output stage:
• purchase behavior
• postpurchase evaluation
Firm’s Marketing Efforts 1. Family
1. Product 2. Informal sources
Input 2. Promotion 3. Other noncommercial
3. Price sources
4. Channels of distribution 4. Social class
Consumer Decision Making 5. Subculture and culture
Need 1. Motivation
Recognition 2. Perception
Prepurchase 4. Personality
Search 5. Attitudes
Output 2. Repeat purchase
LEVELS OF DECISION MAKING:
While decision making is defined as the selection of an alternative to solve a problem, the
time and effort required to complete the process varies across buying situations. We may
define three kinds problem solving spread over a continuum; these are referred to as the levels
of consumer decision making;
(i) Extensive problem solving (EPS):In EPS, the consumer is unfamiliar with the
product/service category; he is not informed of the product or service offering, and thus, the
situation requires extensive information search and evaluation.
1.These goods are ones of high involvement; they are expensive; they are infrequently
bought; there is considerable amount of risk involved.
2.These are generally first time purchases
Examples: Jewellery, electronic goods, Real estate and property etc.
(ii) Limited problem solving (LPS) :The consumer is familiar of the product or service
offering; but he is unaware of the various brands. The case is one where the buyer is familiar
with the product category but unfamiliar with the brands. The types of products and /
situations where we generally have LPS:
1.These goods are ones of low involvement; they are generally moderately priced; they are
frequently bought; there is lesser amount of risk involved.
2.These are generally recurring purchases.
Exceptions: They may also be cases where an expensive product is being repurchased.
Examples: A laptop replacing a desktop, a second TV for the home.
(iii)Routinized problem solving (RPS) or Routinized response behavior:
The consumer is well informed and experienced with the product or service offering. The
consumer is aware of both the decision criteria as well as the various brands available.
Here, the goods are ones of low involvement; they are inexpensive; they are frequently
bought; there is no risk involved. These are routine purchases and are a direct repetition,
where the consumer may be brand loyal.
Examples: Staples, Cold drinks, Stationery etc.
Comparisons between EPS, LPS and RPS
EPS LPS RPS
1.Complexity of decision making High Medium Low
2.Time taken to make decisions High Low to High Low
3.Information gathering Yes Yes No
4.Information sources Many Few Few or none
5.Awareness and knowledge of:
a)Decision criteria No No Yes
b)Alternative brands available Somewhat Yes Yes
6. Evaluative criteria Complex Moderate Simple (if at all)
7. Brands considered Many Few One (Repeat purchase)
8. Cognitive dissonance High Rare None
9. Consumer Involvement High Medium Low
10.Information search Extensive Limited Minimum
Comparisons between EPS, LPS and RPS
EPS LPS RPS
11. Evaluation of alternatives Complex Moderate Simple (if at
5. Purchase Gradual after a cognitive process Not so gradual Immediate
6. Post purchase processes Cognitive dissonance is high Cognitive dissonance Brand loyalty.
. Brand loyalty if satisfied would be rare Repeat purchase
7. Types of goods Specialty goods Mixed Convenience
BUYING ROLES: Consumer decision making is a complex process. It is an
interplay of reactions amongst a consumer and his cognition, affect and behavior on
the one hand, as well as the environmental forces on the other hand.
The actual transaction/ exchange is preceded by considerable amount of thought
processes and influences. This could be explained in terms of the five “Buying
a) Initiator: The person who identifies a need and first suggests the idea of buying
a particular product or service.
b) Influencer: The person(s) who influences the buyer in making his final choice
of the product.
c) Decider: The person who decides on the final choice: what is to be bought,
when, from where and how.
d) Buyer: The person who enters into the final transaction and exchange process or
is involved in the physical activity of making a purchase.
e) User: The person(s) who actually consumes the product or service offering.
so The marketer needs to understand these to frame suitable strategies.
Example A boy enters college and needs a laptop for doing assignments.
i) Initiator: The boy himself
ii) Influencer: His friends and classmates.
iii) Decider: The boy himself.
iv) Buyer: The boy himself.
FAQS (FREQUENTLY ASKED QUESTIONS):
1. Define Consumer Decision Making.
2. Compare and contrast the various levels(EPS,LPS&RPS) of Consumer
3. Mention the five buying roles.
4. Mention the two types of decision making.
5. Mention the three kinds problem solving.
a) With respect to marketing, programmed decisions are related to
infrequent purchases or specialty goods and emergency goods.
b) In case of LPS brand loyalty is high.
c) As far as Buyer Behavior is concerned, the users’ role is the most
Fill in the blanks:
1. A decision is defined as choosing an -------------of the few/many available.
2. Programmed decision making is applied when problems are ---------to deal
with and guidelines to sort out such problems exist.
3. ----------------decision making is applied for problems that arise suddenly and
are unique or novel.
Keys: 1. option 2. simple3. Non-programmed
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