Consumer Behaviour

The Management of PROCTER & GAMBLE once stated : "Our business is based on understanding
the consumer and providing the kind of products that the consumer wants. We place enormous emphasis
on our product development area and our marketing area, and on our people knowing the consumer. The
human mind is the most complex entity in the whole universe as it is very unpredictable how a person
would behave in or react in a particular situation. A persons behavior changes from place to place and
situation to situation or, say it is very inconsistent. The person when has a need, is willing and able to
satisfy the need is called a CONSUMER.
Consumer behaviour is the study that focuses on how, what, when and why people buy. It is a complex
process. It is a study that blends elements from psychology, sociology, anthropology, marketing and
economics. It attempts to understand the consumers decision making process, both individually and in
groups based on social and economic division. It studies characteristics of individual consumers such as
demographics, psychographics, and behavioural variables in an attempt to understand people's wants. It
attempts to understand the decision-making processes of buyers, both individually and in groups such as
how emotions affect buying behaviour. It studies characteristics of individual consumers such as
demographies and behavioural variables in an attempt to understand people's wants. It also tries to assess
influences on the consumer from groups such as family, friends, sports, reference groups, and society in
general.Customer behaviour study is based on consumer buying behaviour, with the customer playing the
three distinct roles of user, payer and buyer. The roles also vary in different consumption situations; for
example, a mother plays the role of an influencer in a childs purchase process, whereas she plays the role
of a disposer for the products consumed by the family.
The study of consumer behaviour explains as to:

Why and why not a consumer buys a product ?

When a consumer buys a product ?
How a consumer buys a product ?

During Christmas, the buying tendencies of consumers increase as compared to other months. In the same
way during Valentines week, individuals are often seen purchasing gifts for their partners. Fluctuations in
the financial markets and recession decrease the buying capacity of individuals.
In a laymans language consumer behaviour deals with the buying behaviour of individuals.
The main catalyst which triggers the buying decision of an individual is need for a particular
product/service. Consumers purchase products and services as and when need arises.

Importance of studying consumer behaviour

Perhaps the most challenging concept in marketing deals with understanding why consumers do
what they do (or dont do). But such knowledge is critical for marketers since having a strong
understanding of consumer behaviour will help shed light on what is important to the consumer and also
suggest the important influences on consumer decision-making. Using this information, marketers can
create marketing programs that they believe will be of interest to consumers. The reason for studying
consumer behaviour seems very simple to understand the consumers mindset and the factors that
influence it. But, just that much is not enough; today, we need to study consumer behaviour in detail,
looking into the smallest nuances of it so as to identify what exactly the consumer desires because in
todays times with so much of competition in every market segment we cannot afford to take the
consumer for granted. With a range of choices in every product, if the consumers desire is not looked
after they will surely move on to any one of the competitors. According to a recent study:

Out of 11000 products introduced by 77 companies, only 56% are present 5 years later.

Only 8% of product concepts offered by 112 leading companies reached the market. Out of that 83%
failed to meet marketing objectives.

Now, the question that comes to my mind here is Why exactly did this happen?

The answer is the lack of understanding of consumer behaviour. Not only is launching a new
product and getting the product noticed by the consumer important but what is more important is to make
sure that the consumer is hooked on to the product and comes back for it time and again We can sell a
product to a consumer again and again only if the consumer feels that this is the best product in the
market to satisfy his needs and maybe even give him some delight and in order to design the best
product, it is necessary to understand not just the physics and chemistry of the product, but also the
psychology of consumers and the sociology of consumer groups or networks.

Basic Model of Consumer Decision Making

Problem Recognition (Motivation)

Problem recognition is that result when there is a difference between one's desired state and one's
actual/current state i.e. when consumer recognizes a problem or a need e.g. Kathy may realize that her
best suit doesnt look contemporary any more or, Dan may recognize that his personal computer is not
performing as well as he thought it should. These are the kinds of problem that we as consumers
encounter all the time. When we find out a difference between the actual state and a desired state, a
problem is recognised. When we find a problem, we usually try to solve the problem. The word
motivation means "to stimulate toward action,"

seeing the difference in his/her actual and desired state the consumer is motivated to take action i.e.
consumers are motivated to address this discrepancy and hence they commence the buying process.
Sources of problem recognition include:

An item is out of stock

Dissatisfaction with a current product or service

Consumer needs and wants

Related products/purchases

Marketer-induced

Information Search

(Perception)

When a consumer discovers a problem, he/she is likely to search for information regarding what products
he/she can use to satisfy his/her need, e.g. Dan may simply pay more attention to product information of
a personal computer. He becomes more attentive to computer ads, computers purchased by his friends,
and peer conversations about computers. Or, he may more actively seek information by visiting stores,
talking to friends, or reading computer magazines, among others. Through gathering information, the
consumer learns more about some brands that compete in the market and their features and characteristics.
Theoretically, there is a total set of brands available to Dan, but he will become aware of only a subset of
the brands (awareness set) in the market. Some of these brands may satisfy his initial buying criteria,
such as price and processing speed (consideration set). As Dan proceeds to more information search, only
a few will remain as strong candidates (choice set).
Once the consumer has recognised a problem, they search for information on products and
services that can solve that problem. Consumers undertake both an internal (memory) and an external
search.
Sources of information include:

Personal sources

Commercial sources

Public sources

Personal experience

Evaluation and Selection of Alternatives

(Attitude Formation)

How does the consumer process competitive brand information and evaluate the value of the
brands? Unfortunately there is no single, simple evaluation process applied by all consumers or by one
consumer in all buying situations.
One dominant view, however, is to see the evaluation process as being cognitively driven and
rational. Under this view, a consumer is trying to solve the problem and ultimately satisfying his/her
need. In other words, he/she will look for problem-solving benefits from the product. The consumer,
then, looks for products with a certain set of attributes that deliver the benefits. Thus, the consumer sees
each product as a bundle of attributes with different levels of ability of delivering the problem solving
benefits to satisfy his/her need. The distinctions among the need, benefits, and attributes are very
important Consumers evaluate alternatives in terms of the functional and psychological benefits that they
offer. The marketing organisation needs to understand what benefits consumers are seeking and therefore
which attributes are most important in terms of making a decision. The relevant internal psychological
process that is associated with the alternative evaluation stage is attitude formation. Attitudes are 'learned
predispositions' towards an object. Attitudes comprise both cognitive and affective elements - that is both
what you think and how you feel about something. The multi-attribute attitude model explains how
consumers evaluate alternatives on a range of attributes. There are a number of strategies that can be used
to influence the process (attitude change strategies). Finally, there is a range of ways that consumers apply
criteria to make decisions. The marketing organisations should know how consumers evaluate alternatives
on salient or important attributes and make their buying.

Purchase decision (Integration)

Actual purchasing process of buyer seeking to build a better understanding of how buyers make
their purchases. The earlier mentioned evaluation step helps the consumer in arriving at a purchase

intention. In the decision evaluation stage, the consumer forms preferences among the brands in the
choice set. The consumer may also form a purchase intention and lean towards buying the most preferred
brand. However factors can intervene between the purchase intention and the purchase decision.

There are certain factors which may come in the way of his/her purchase intention and purchase
decision.
(a) The attitude of others: By other we mean people who are close to the buyer and their reaction or
attitude towards the purchase intention of the prospect.
(b) The unanticipated situational factors: These factors may influence the purchase intention such as
transfer to another place, priority given to another purchase etc. Many factors influence the purchase
decision. These include the cost of the product compared to how much money the consumer can afford to
spend, the opinions of family or friends, and the sales and services policies of the marketer. Some
customers may wish to try a product before making a major purchase.

Post-purchase evaluation

(Learning)

There should be a feedback loop, importance of the post purchase evaluation and that the post
purchase evaluation is the key due to its influences on future purchase patterns. After customers make
buying decisions, they often continue to evaluate them. Post-purchase evaluation occurs when a customer
seeks reasons to support a purchase decision. Post-purchase evaluation processes are directly influenced
by the type of preceding decision-making process. Directly relevant here is the level of purchase
involvement of the consumer. Purchase involvement is often referred to as the level of concern for or
interest in the purchase situation, and it determines how extensively the consumer searches information
in making a purchase decision. Although purchase involvement is viewed as a continuum (from low to
high), it is useful to consider two extreme cases here. Suppose one buys a certain brand of product (e.g.,
Diet Pepsi) as a matter of habit (habitual purchase). For him/her, buying a cola drink is a very low
purchase involvement situation, and he/she is not likely to search and evaluate product information
extensively.
In such a case, the consumer would simply purchase, consume and/or dispose of the product with
very limited post-purchase evaluation, and generally maintain a high level of repeat purchase motivation.

Types of Consumer Buying Behavior

Consumers are becoming smarter day by day; it is not to fool them with any gimmick. Nowadays,
consumer does his/her homework very well before making any purchase in the market. Even before
buying a face wash a consumer go through a rigorous process of choosing the best among the many
present in the market. Buying a face wash and buying a luxurious car is very different, therefore the
perception involved and the information gathered by the consumer in purchasing a car is much more than
buying a face wash.
Henry Assael distinguished four types of consumer buying behavior based on the degree of buyer
involvement and the degree of differences among brands.

(a) Routinized Response Behavior (RRB)/ Habitual Buying Behavior:

This is the simplest type of consumer behavior. This occurs when the consumer already has some

experience of buying and using the product. Usually, this kind of behavior is adopted for the purchase of
low cost, frequently used items. In such cases the buyers do not give much thought, or search and also do
not take a lot of time to make the purchase. Most of the time the buyer is familiar with the various brands
available and the attributes of each and has a well-established criteria for selecting their own brand. The
buyers are well aware of the product class, know the brands and also have a clear preference among the
brands. The degree of involvement in buying such products is low. In such a case, the marketer has to
ensure two tasks:

(a) The marketer must continue to provide satisfaction to the existing customers by maintaining quality,
ervice and value.
(b) He must try to attract new customers by making use of sales promotion techniques like points of
purchase displays, off-price offers, etc., and also introduce new features to the products.

(b) Limited Problem Solving (LPS)/ Dissonance Reducing Buying Behavior:

In this type of buying behavior, the consumer is familiar with the product and various brands
available, but has no established brand preference. Here the buyer is more complex as compared to
routine buying behavior because the consumer is confronted with an unfamiliar brand in a familiar
product class. The consumer would like to gather additional information about the brands to arrive at his
brand decision. For instance, a housewife buys refined vegetable oils for her cooking and she may be
familiar with the concept of vegetable oil, vanaspati and ghee. She may also know about some of the
leading brands available. But to establish her choice of brand, she would like to check with her friends
and regular store about the attributes of each. This buying behavior as described limited problem solving
because the buyers are in a situation where they are fully aware of the product class but not familiar with
all the brands and their features. 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 vegetable oil. Apart from buying 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. Here the marketers job is to design a communication programme,
which will help the buyer to gather more information, increase his brand comprehension and gain
confidence in the brand.

(b) Extensive Problem Solving (EPS)/Complex Buying Behavior:

This buying is referred to as a complex buying behavior because the consumer is in an unfamiliar
product class and is not clear about what criteria to consider for buying. 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 the most complex type. For
instance, you may become interested in purchasing a Color Television set to replace the existing black and

white one. You may have heard of the various brand names, but lack clear brand concepts. You do not
know what product attributes or features to consider while choosing a good television set. So yours is an
extensive problem solving. The marketing strategy for such buying behavior must be such that it
facilitates the consumers information gathering and learning process about the product category and his
own brand. The marketer must understand the information gathering and evaluation activities of the
prospective consumers. They have to educate the prospective buyers to learn about the attributes of the
product class, their relative importance and the high standing of the marketers brand on the more
important brand attributes.

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. In other words, the
marketing communications should be aimed at supplying information and help the consumer to evaluate
and feel good about his/her brand choice. The concept of EPS is most applicable to new products. The
product may be new at the generic level or it may be an established product concept but new for a
particular consumer. In case of a new product concept 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 consumer in turn need a great deal of information before they can take a decision; and the decision
process takes a longer 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. Because for him,
buying a toothpaste is an EPS behavior whereas for most of us it is simply Routinized response behavior.

(d) Variety Seeking:

Consumers often express satisfaction with their present brand but still engage in brand switching. The
motive is variety seeking, which occurs most often when there are many similar alternatives, frequent
brand shifts, and high purchase frequency. It can occur simply because someone is bored with his or her
current brand choice, or it can be prompted by external cues as store stock outs or coupons that promote
switching. Take the example of chocolates. The consumers has some beliefs about chocolates chooses a
brand of chocolates without much evaluation and evaluates the product during consumption. Next time,
the consumer may reach for another brand out of a wish for a different taste. In this case the brand
switching occurs for the sake of variety rather than dissatisfaction.
The business firm implications in case of variety-seeking buying behaviour may be as follows:
1. The market leader may try to encourage habitual buying behaviour by domination of shelf
space,avoiding out-of-stock conditions and sponsoring reminder advertising.
2. Encourage variety-seeking by offering lower price,deals-coupons,free samples, and an advertising
campaign that features reasons for trying something new.

Factors Influencing Consumer Behaviour:

Internal Influences
Internal Influences
Perception
Perception
Motivation
Motivation
Learning
Learning
Attitudes
Attitudes
Personality
Personality
Age Groups
Age Groups
Lifestyle
Lifestyle

Social Influences
Social Influences
Culture
Culture
Subculture
Subculture
Social Class
Social Class
Group
Group
Membership
Membership
s
s
Opinion
Opinion
Leaders
Leaders

Figure 4

Situational Influences
Situational Influences
Communication
Communication
Situation
Situation
Purchase
Purchase
Situation
Situation
Usage Situation
Usage Situation
Disposal
Disposal
Situation
Situation

Decision
Process
Purchase!!

Factors Influencing Consumer Behaviour

As we can see there are a number of internal and external influences that can affect a consumers
decision/behaviour with respect to a product. Discussing the above in detail would give a holistic
perspective on consumer behaviour.

1. Internal Influences:

Motivation:
It is an internal state that drives us to satisfy needs. Motivation is the reason or reasons for
engaging in a particular behaviour, especially human behaviour as studied in philosophy, conflict,
economics, psychology, and neuropsychology. These reasons may include basic needs such as food or a
desired object, hobbies, goal, state of being, or ideal. What it does is, it exerts a push towards action that
satisfies a need, which in most of the cases leads to a purchase.
The extent to which the consumer is motivated depends on the importance of the need to
him.The needs in order of their importance have been described by Abraham Maslow in 1943 in a
paper called A theory of Human Motivation and is commonly known as Maslows Hierarchy of
Needs, represented as a pyramid with the more primitive needs at the bottom. The higher needs in this
hierarchy only come into focus when the lower needs in the pyramid are satisfied. Once an individual
has moved upwards to the next level, the needs in the lower level will no longer be prioritized. If a
lower set of needs is no longer being met, the individual will temporarily re-prioritize those needs by
focusing attention on the unfulfilled needs, but will not permanently regress to the lower level. For
instance, a businessman at the esteem level who is diagnosed with cancer will spend a great deal of
time concentrating on his health (physiological needs), but will continue to value his work
performance (esteem needs) and will likely return to work during periods of remission.

The extent to which the consumer is motivated depends on the importance of the need to
him.The needs in order of their importance have been described by Abraham Maslow in 1943in a
paper called A theory of Human Motivation and is commonly known as Maslows Hierarchy of
Needs, represented as a pyramid with the more primitive needs at the bottom. The higher needs in this
hierarchy only come into focus when the lower needs in the pyramid are satisfied. Once an individual

has moved upwards to the next level, the needs in the lower level will no longer be prioritized.

If a lower set of needs is no longer being met, the individual will temporarily re-prioritize
those needs by focusing attention on the unfulfilled needs, but will not permanently regress to the
lower level. For instance, a businessman at the esteem level who is diagnosed with cancer will spend a
great deal of time concentrating on his health (physiological needs), but will continue to value his
work performance (esteem needs) and will likely return to work during periods of remission.

Maslows Hierarchy of Needs:

Physiological needs:
These are the basic human needs for such things as sex, warmth, water, and other
bodily needs. If a person is hungry or thirsty or their body is chemically unbalanced, all of
their energies turn toward remedying these deficiencies and other needs remain inactive.

Safety Needs:

With their physical needs relatively satisfied, the individual's safety needs take
over and dominate their behaviour. These needs have to do with people's yearning for a
predictable, orderly world in which injustice and inconsistency are under control, the
familiar frequent and the unfamiliar rare. In the world of work, safety needs manifest
themselves in such things as a preference for job security, grievance procedures for
protecting the individual from unilateral authority, savings accounts, insurance policies,
and the like.

Social Needs:
After physiological and safety needs are fulfilled, the third layer of human needs is
social. This psychological aspect of Maslow's hierarchy involves emotionally-based
relationships in general. Humans need to feel a sense of belonging and acceptance, whether
it comes from a large social group, such as clubs, office culture, religious groups,

professional organisations, sports teams, gangs , or small social connections. They need to love
and be loved by others. In the absence of these elements, many people become susceptible to
loneliness, social anxiety, and clinical depression. This need for belonging can often overcome the
physiological and security needs, depending on the strength of the peer pressure; an anorexic, for
example, ignores the need to eat and the security of health for a feeling of control and belonging.

Esteem Needs:
All humans have a need to be respected, to have self-esteem, self-respect, and to
respect others. People need to engage themselves to gain recognition and have an activity
or activities that give the person a sense of contribution, to feel accepted and self-valued,
be it in a profession or hobby.

Self-Actualization:
When all of the foregoing needs are satisfied, then and only then are the needs for
self-actualization activated. Maslow describes self-actualization as a person's need to be
and do that which the person was "born to do." "A musician must make music, an artist
must paint, and a poet must write." These needs make themselves felt in signs of
restlessness. The person feels on edge, tense, lacking something, in short, restless. If a
person is hungry, unsafe, not loved or accepted, or lacking self-esteem, it is very easy to
know what the person is restless about. It is not always clear what a person wants when
there is a need for self-actualization.

Perception:
In psychology and the cognitive sciences, perception is the process of attaining
awareness or understanding of sensory information. For us it is the process by which consumers
select, organize, and interpret information regarding the product. The consumer is first exposed to the
product through various mediums used to grab his attention; the consumer then interprets whats been
shown to him/her about the product and forms his view or perception of the product.

 Age Groups:

Consumer behaviour can vary on the basis of age as well; consumers from different age
groups might have different preferences. Consumers based on their ages can be broadly classified
as children, teens, young adults, middle aged and the elderly. Consumers from different age groups
might have different preferences even when it comes to the same product e.g. T-shirts, a child
would prefer something with a cartoon character on it, a teenager on the other hand would prefer
one with some rock band poster on it, a young adult would prefer clever graffiti, a middle age or
older consumer would prefer something sober and plain.
Sometimes companies design products that are aimed at specific age groups e.g. products
like luxury cruises to exotic locales often target older consumers who are retired and have the time
and money for expensive travel, or products like gaming consoles which target consumers from
lower age groups. Related to age groups, our purchases also depend on our current position in the
family life cycle stages through which family members pass as they grow older.

Attitude:

The term attitude is used here to denote the valuation of a concept or an object, i.e. to which
extent the object or concept is judged to be good or bad in a general global meaning i.e. attitude is
the amount of affect or feeling for or against a stimulus e.g. how good would it be for Sweden to
stay as a member in the European Union? How good is the Indian nuclear power program?
Attitude in this sense can be studied with the help of one or a few judgment scales. The object or
concept judged can be more general or specific, but usually it is rather specific. In this way
attitude is different from value which is a judgment, similar to the one used in the measurement of
attitudes, of a general or abstract concept. Examples of such concepts are freedom and equality.

Lifestyle :

It is a term which can have at least three different meanings:

1. The values that a person expresses with reference to a limited number of basic dimensions
(freedom, justice, equality, etc).
2. A group or cluster of attitudes, opinions, interests and activities. In this case the
investigator usually includes a theoretical mixture of very different concepts which are
supposed to serve as a basis for classifying or segmenting a population. The segmentation
should in its turn be possible to use in marketing products or influencing habits.

3. Actual patterns of behaviour, e.g., lifestyles characterized by substance abuse or an active

leisure time involving sports, work in political organisations, etc.

A lifestyle is a pattern of living that determines how people choose to spend their time, money,
and energy and reflects their status, values, tastes, and preferences expressed through preferences for
sports activities, music interests, and political opinions. It is obvious that lifestyle is a very important
factor when it comes to consumer behaviour and decision making. There are many products that are
based on consumers lifestyle e.g. a person will pay ten to fifteen times more to have an imported
luxury sedan even though the same service can be provided by a small car, another example, in a study
of electricity consumption it was found in a family which was extreme in its consumption of energy
that the reason mainly was that two teenage daughters spent several hours in the shower each day. It
was therefore, according to the researchers, the lifestyle which was the explanation of energy
consumption in this case.
Life values are believed to provide the motivation for buying. They are usually characterized
by a set of values, which differ in relative importance from person to person. They tend to be abstract
so their impact on consumer behaviour will be quite indirect. The way in which consumers use
product and services in a certain area to attain their life values can also be called consumer lifestyle.
What is important from a marketing point of view is that different types of consumers have to be
addressed in different ways. Lifestyle is thus a useful tool for segmentation.

 Personality:

An individuals personality relates to perceived personal characteristics that are consistently

exhibited, especially when one acts in the presence of others. In most, but not all, cases the behaviour
one projects in a situation is similar to the behaviour a person exhibits in another situation. In this
way personality is the sum of sensory experiences others get from experiencing a person (i.e., how
one talks, reacts, etc).
For marketers it is important to know that consumers make purchase decisions to support their
self concept. Using research techniques to identify how consumers view themselves may give
marketers insight into products and promotion options that are not readily apparent. For example,
when examining consumers a marketer may initially build marketing strategy around more obvious
clues to consumption behaviour, such as consumers demographic indicators (e.g., age, occupation,
income, etc). However, in-depth research may yield information that shows consumers are purchasing
products to fulfill self-concept objectives that have little to do with the demographic category they fall
into e.g., senior citizen making purchases that make them feel younger. Appealing to the consumers
self concept needs could expand the market to which the product is targeted.

Situational Influences

The Communication Situation:

The situation in which consumers receive information has an impact on their behaviour. Whether one is alone or
in a group, in a good mood or bad, in hurry or not influences the degree to which he sees and listens to marketing
communication. A marketer is able to deliver an effective message to consumers who are interested in the service and are
in a receptive communication situation. However, finding high interest potential buyers in receptive communications
situations is a difficult challenge.

The Purchase Situation:

Situations can also affect service selection in a purchase situation. A shortage of time, such as trying to make a
purchase between all classes, can affect the store choice decision. Marketers must understand how purchase situations
influence consumers in order to develop marketing strategies that enhance the purchase of their services.

The Usage Situation:

Marketers need to understand the usage situations for which their services are actually appropriate. Using this
knowledge, marketers can communicate how their services create consumer satisfaction in each relevant usage situation.
A number of features or characteristics of situation influence behaviours across the various types of situations described
below.
1. Physical Features: Physical surroundings include decor, sounds, aroma, lighting, weather and configurations of
merchandise or other material surrounding the stimulus object. Physical surroundings are widely used type of situational
influence, particularly for retail applications.
2. Social Surroundings: Social surroundings are the other individuals present during the consumption process. People s
actions are frequently influenced by those around them. Most people would change their apparel for at least some of
these situations. Social influence is a significant force for acting on our behaviour, since individuals tend to comply with
group expectations, particularly when the behaviour is visible.

3. Temporal Perspective: Temporal perspectives are situational characteristics that deal with the effect of
time on consumer behaviour. Time as a situational factor can manifest itself in a number of ways. The amount
of time available for the purchase has a substantial impact on the consumer decision process and information
search.

2. Social Influences
The way we think, perceive and act depends a lot upon social factors. These factors were analysed
by a number of scientists such as W. J. Stanton, M. J. Etzel and B. J. Walker (1991). They highlighted four
social factors that influence consumer behaviour:

o
o
o
o

Culture & Sub-Culture

Social Class
Group Behaviour and Reference Groups
Opinion Leaders

According to the authors, social factors influence consumer behaviour directly and indirectly.
Indirect social factors act through psychological factors. This means that social factors do influence the
formation of psychological factors (consumer motivation, perception, attitude, etc) that in turn influence
consumer behaviour.

Culture and Subcultures:

Culture generally refers to patterns of human activity and the symbolic structures that give such

activities significance and importance. Cultures can be "understood as systems of symbols and meanings
that even their creators contest, that lack fixed boundaries, that are constantly in flux, and that interact and
compete with one another". Culture can be defined as all the ways of life including arts, beliefs and
institutions of a population that is passed down from generation to generation. Culture has been called
"the way of life for an entire society." As such, it includes codes of manners, dress, language, religion,

rituals, norms of behaviour such as law and morality, and systems of belief as well as the art. Culture is

the values, beliefs, customs, and tastes produced and valued by a group of people, whereas a subculture is
a group coexisting with other groups in a larger culture whose members share a distinctive set of beliefs
Or characteristics. In sociology, anthropology and cultural studies, a subculture is a group of people with
a culture (whether distinct or hidden) which differentiates them from the larger culture to which they
belong.
For marketers it is very vital to know the culture to which particular consumers belong before he gives
out the product to the consumers. Culture is an important cog in the mechanism of consumer behaviour
and has to be noticed, e.g. when Mc Donalds came to India they realized that Indians do not eat beef as
cow is considered holy in our culture, also that most Indians are vegetarians, so what it did to counter
these cultural barriers was to introduced Indianised versions of burgers!
For better market penetration the subcultures of a society must be taken into account.
Acknowledging these subcultures can often be beneficial, e.g. various eateries and food outlets offering
Jain Food.

Social Class:

Social class is the overall rank of people in a society. People in the same class tend to have similar
occupations, similar income levels, and share common tastes in clothes, decorating styles, and leisure
activities. They may share political and religious beliefs. Social class refers to the hierarchical distinctions
(or stratification) between individuals or groups in societies or cultures. Usually individuals are grouped
into classes based on their economic positions and similar political and economic interests within the
stratification system.

Group Behaviour and Reference Groups:

Group behaviour in sociology refers to the situations where people interact in large or small
groups. The field of group dynamics deals with small groups that may reach consensus and act in a

coordinated way.
Groups of a large number of people in a given area may act simultaneously to achieve a goal that
differs from what individuals would do acting alone (herd behaviour).

A large group (a crowd or mob) is likely to show examples of group behaviour when people
gathered in a given place and time act in a similar wayfor example, joining a protest or march,
participating in a fight or acting patriotically, boycotting a product or coming out in support of a product,
etc.

Reference group is a set of people a consumer wants to please or imitate. The group can be
composed of one person, a few people, or many people. They may be people you know or dont know.
Conformity is at work when people change as a reaction to real or imagined group pressure. E.g. in
college if everyone wears Nike shoes you would also feel like wearing shoes of the same brand so as to
please your peers and group members and more importantly yourself as the shoes give you a feeling of
being in the group or a feeling of being at-par with other group members.

Opinion Leaders:
The opinion leader is an agent who is an active media user and who interprets the meaning of

media messages or content for lower-end media users. Typically the opinion leader is held in high esteem
by those that accept his or her opinions. Opinion leadership tends to be subject specific, that is, a person
that is an opinion leader in one field may be a follower in another field.
An example of an opinion leader in the field of computer technology might be a neighborhood
computer service technician. The technician has access to far more information on this topic than the
average consumer and has the requisite background to understand the information. An opinion leader is
hence a person who influences others attitudes or behaviours because they are perceived as possessing
expertise about the product. They are usually the first ones to buy a product when it enters the market.
Marketers generally target these opinion leaders and use them in marketing communications. Any
knowledge about the product is conveyed through these opinion leaders as they are heavy users of a wide

range of information sources; both getting and giving marketplace information.

Models of Consumers :
Consumers approach the marketplaces differently; they go though the buying decision process differently
as it gets impacted by internal and external forces. Researchers have attempted to understand the
dynamics of consumer decision making and they have classified four varying views and perspectives, the
underlying forces operating within consumers that could be employed to approach the marketplace. These
are:

i) Economic view: According to the economic perspective of studying consumers, the consumer is
regarded as being rational. The model assumes that there exists in the market a state of perfect
competition; the consumer is aware of the various alternatives; he has the knowledge and ability to rank
all of these; and he finally takes a rational decision. He takes a decision and makes a choice as after taking
into account the cost and benefit, and the overall value in economic terms.

ii) Cognitive view: The consumer is regarded as being a problem solver, who searches for products to
fulfill his needs/wants. Consumer decisions are based on information gathering and processing. The
consumer is believed to take decisions after a lot of thought and deliberation, so as to get maximum
benefit and value.

iii) Passive view: Here, the consumer is regarded as irrational and impulsive, who easily succumbs to the
selling and promotional efforts of the marketer. It is assumed that the consumers are submissive to the
self-serving interests of the marketer and the salespersons are powerful.

iv) Emotional view: The consumer is regarded as being emotional and impulsive.
who takes decisions based on moods and emotions. Marketers must put in efforts and create positive
mood and emotions.

BUYER DECISION PROCESS TOWARDS NEW SERVICES:

(1) Awareness stage: In this stage an individual comes to know about a new innovation or new idea or new
product/service. He becomes aware of the innovation from any source of information like friends or neighbors, coworkers, commercial sources etc. The individual only learns about knowledge, innovations from either of the sources of
information. This means his knowledge about the new innovation is only limited to extent the information generated by
the source of information from where he first learns about the new innovations.
(2) Interest stage: After being aware of innovation in this stage the buyer feel stimulated and is interested in the
innovation to seek more information in terms of its utility aspects, its performance, durability and so on. The in depth
information sought by him will try to be obtained from all the sources he finds reliable.
(3) Evaluation stage: Based on all the information gathered by the individual buyer will evaluate and make decision
whether it is worthwhile or whether it will make sense and do him good to try out the innovation. In other words from all
the collected information related to innovation buyer will mentally try to evaluate the service attributes and work out to
what extent the new service will be useful and then decide whether or not to try the new service.
(4) Trial stage: After evaluating the worthiness of the new service the buyer may decide to try out the innovation on a
small scales basis initially to make an actual assessment of the value of the new service. This stage also indicates that
now the buyer is mentally prepared to try out the innovation, through initially on a small scale. The buyer wants to
experiment with the innovation and depending on how comfortable he feels with to service, he will decide whether to go
for large scale use or not. Since the buyer is not sure about the outcome of the use or consumption of the new service or
innovation, he feels it more logical and practical to go for a trial before extending it to full fledge use.
(5) Adoption stage: After deriving the satisfaction from the purchase of new service on a trial basis, the buyer decide
upon whether to extend full fledge use or not. This is the last stage in the adoption process. The buyer takes the final
decision for the further use of service. The adoption process model is suggested by Everett M. Rogers describes five
stages of adoption; knowledge (awareness stage), persuasion (forming attitude), decision, implementation and
confirmation.
FAMILY DECISION MAKING
Many marketers recognise the family as the basic decision making unit, they most frequently examine the attitudes and
behaviour of the one family member whom they believe to be the major decision maker. The family has a major
influence in the consumer behaviour process. As the basic group to which individual belongs, the family provides early
childhood learning about services and service categories, provides the opportunity for service exposure and repetition and
sets the consumption norms for family members. As a major consumption unit the family has a prime target for most
products and service categories.

Family Roles:
For a family to function as cohesive unit, roles or task such as doing the laundry, preparing meals and taking out the
garbage must be carried out by one or more family members. In a dynamic society, family-related roles are constantly
changing. There are eight distinct roles in the family decision making process which are based on consumption such as
influencers, gatekeepers, deciders, buyers, prepares, maintainers and disposers.
The number and identity of the family members who fill these roles vary from family to family and from product to
service. In some cases, a single family member will independently assume a number of roles whereas in other case, a
single role will be performed jointly by two or more family members.
Influencing Spouse and Resolving Consumer Conflicts:
When it comes to making purchase decisions, husbands and wives frequently find themselves in disagreement about
when to spend or save, how much to spend on some item, what colours fits best or where to buy something. There are
many purchase decisions where there might be disagreement. To avoid or resolve potential disagreements, husbands and
wives commonly attempt to influence each other to arrive at a best outcome.
What an individual imbibes from his parents becomes his/her culture. In countries like India, where children are
supposed to stay with their parents till the time they get married, the influence of parents on an individuals buying
decisions can not be ignored. What he sees from his childhood becomes his habit or in other words lifestyle. A female
from an orthodox background would prefer salwar suits, saris instead of westerns or short outfits. In India, parents expect
their children to dress up in nice, colourful outfits during marriages, festivals or other auspicious occasions. Even if
children want to buy something else, their parents would always prompt them to buy traditional attire, thus influencing
their buying decision.
The moment an individual enters into wedlock, his/her partner influences his buying decisions to a great extent. In most
families, wife accompanies her husband for shopping be it grocery, home appliances, furnishings, car etc.An individual
would always discuss with his/her partner before any major purchase. After marriage, individuals generally do not like
spending on himself/herself; rather they do it for their partner or family. A young bachelor would not mind spending on
alcohol, attending night parties, casinos but the moment he has a wife at home, he would instead spend on household and
necessary items. No bachelor likes to invest money on mutual funds, insurance policies, mediclaims etc but for someone
who is married buying an investment plan becomes his first priority. Women generally are inclined towards buying
toiletries, perfumes, dresses, household items, furnishings, food products while men would rather love to spend on
gadgets, cars, bikes, alcohol etc.Both have different tastes but when they come together, they mutually decide on what to
buy and what not to buy.
A working woman would have different needs as compared to a housewife. A woman who goes to office would prompt
her husband to buy formal trouser and shirt, office bag, make up products etc for her while a house wife would not like
spending on all these as she does not require an office bag and so on.

Children also influence the buying decisions of individuals. An individual spends happily on toys, candies, ice creams,
chocolates. sweets when he has children at home. Children in the family prompt their parents to subscribe to Disney
Channel, Cartoon network and so on.

Individuals do not mind spending on medicines, health supplements, vitamin tablets, protein drinks if they have ailing
parents at home.
Customer satisfaction/dissatisfaction
After the sale, the buyer will likely feel either satisfied or dissatisfied. If the buyer beleives that he received more in the
exchange than what was paid, he might feel satisfied. If he believes that he received less in the exchange than what was
paid, then he might feel dissatisfied. Dissatisfied buyers are not likely to return as buyers and are not likely to send
friends, relatives and acquaintances. They are also more likely to be unhappy or even abusive when the product requires
post-sale servicing, as when an automobile needs warranty maintenance.
An issue related to this is attribution theory. According to attribution theory, people tend to assign cause to the behavior
of others. Buyer estimate which offer will deliver the most value. Customer satisfaction is a personal feeling of pleasure
or disappointment resulting from comparing a services perceived performance (or outcome) in relation to his or her
expectations. As the definition makes clear customer satisfaction is a function of perceived performance and
expectations. If the performance falls short of expectations the customer is dissatisfied. If the performance matches the
expectations the buyer is satisfied. If the performance exceeds expectations the buyer is highly satisfied or delighted.
High satisfaction or delight creates an emotional affinity with the brands the result is high customer loyalty. The past
buying experiences, friends, associates advice, marketers/competitors information and promises are influencing their
buyers expectations.
Ingredients of Customer Satisfaction:
Needs and wants:
A need is basis biological motive; a want represents one way that society has taught us that a need can be
Needs and wants are center of marketing activities and consumer behaviour studies.

satisfied.

Value:
Customer value is defined as the ratio between the customer s perceived benefits (economic, functional and
psychological) and the resources (monetary, time, effort, psychological) used to obtain those benefits. Perceived value is
relative and subjective.

Customer Loyalty:
Customer loyalty is a customers commitment or attachment to a brand, store, manufacturer and service provider. It
is not the same as customer satisfaction although highly satisfied customers may become loyal customers in long run.

Customer Retention:
Highly satisfied customer will stay with the company rather than switch to some other firm.

Customer Delight:
The organisation wants to please customers to the point that they want the organisation to sell them something else.
Customer pampering and complementary services: Providing extra care, cross selling (providing complementary services
to existing customers), bundling (selling a combination of services at a lower price to existing customers), up-selling
(marketing of higher value services to existing customers).

Customer Relationship Management

It is another step in the development of the traditional concept of marketing- a philosophy or a way of envisioning

organisation as an integrated system where all aspects work to satisfy customers needs at a profit within societys long
term best interest. The basis for effective customer relationship management system and strategies is to build profitable
relationships in the long term that are mutually beneficial and that fulfill promises as customer experience the product or
service offering.
CRM solutions have been developed to provide a 360 degree view of the customer.In the new emerging Global economy,
customers can be located in multiple geographies and can make use of an organisations product and resources through
multiple channels. CRM has been enabled by growth and reliability in Internet services and related technologies.