In the highly specialised study of “BUSINESS MANAGEMENT”, today, the function of “MARKETING MANAGEMENT” plays a very critical role. This is because this functional area of management : (1) “EARNS” the revenue, & (2) “WORKS” in the close proximity with the public or persons outside the organisation. Controlling these two attributes to have the desired benefits are the most difficult part of the management, because none of these two are within the direct control of the marketers. This doesn’t mean that the other functional areas are not important, but they are not “DIRECTLY” involved in the activities mentioned above. Similarly, within the study of Marketing Management, the “Consumers” or the “Customers” play a very critical role as these are the people who finally BUY the goods & services of the Organisation, and the firm is always on the move to make them buy so as to earn revenue.

1. Consumer
Behaviour
Introduction :
Why Study
Consumer Behaviour

2. Why Study Consumer Behaviour
• In the highly specialised study of
“BUSINESS MANAGEMENT”, today,
the function of “MARKETING
MANAGEMENT” plays a very critical
role. This is because this functional
area of management :
• (1) “EARNS” the revenue, &
• (2) “WORKS” in the close proximity
with the public or persons outside the
organisation.
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3. Why Study Consumer Behaviour
• Controlling these two attributes to
have the desired benefits are the most
difficult part of the management,
because none of these two are within
the direct control of the marketers.
• This doesn’t mean that the other
functional areas are not important, but
they are not “DIRECTLY” involved in
the activities mentioned above.
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4. Why Study Consumer Behaviour
• Similarly, within the study of Marketing
Management, the “Consumers” or the
“Customers” play a very critical role as
these are the people who finally BUY
the goods & services of the
Organisation, and the firm is always on
the move to make them buy so as to
earn revenue. It’s crucial from both the
points of view as given below :
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5. Customers’ Point of View
• From the customers’ point of view :
Customers today are in a tough spot.
Today, in the highly developed &
technologically advanced society, the
customers have a great deal of choices &
options (and often very close &
competing) to decide on.
– 1) They have the products of an extreme
range of attributes (the 1st P - Product),
– 2) they have a wide range of cost and
payment choices (the 2nd P - Price),
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6. Customers’ Point of View
–3) they can order them to be supplied to
their door step or anywhere else (the 3rd
P - Place),
–4) and finally they are bombarded with
more communications from more
channels than ever before (the 4th P -
Promotion).
• How can they possibly decide where to
spend their time and money, and to
whom they should give their loyalty ?
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7. Marketers’ Point of View
• The basic requirement for the
marketers in earlier days where
aggressive selling was the aim :
• “The purpose of marketing is to sell
– more stuff to more people
– more often for more money
– in order to make more profit”.
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8. Marketers’ Point of View
• Today, it can’t be achieved by force,
aggression or plain alluring.
• For the customers are today more
informed, more knowledgeable, more
demanding, more discerning.
• And above all there is no dearth of
marketers to buy from.
• The marketers have to earn them or
win them over.
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9. Similarity in Diversity
• The global marketplace is a study in
diversity - diversity among
• consumers, producers, marketers,
• retailers, advertising media,
• cultures, and customs and of course
• the individual or psychological
behaviour.
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10. Similarity in Diversity
• However, despite prevailing diversity,
there also are many similarities.
• The object of the study of consumer
behaviour is to :
• Provide conceptual and technical tools
to enable the marketer to apply them
to marketing practice, both profit &
non-profit.
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11. Study of Consumer Behaviour
• The Consumer Behaviour (CB) is very
important to the marketers because it
enables them to :
• Understand and predict buying
behaviour of consumers in the
marketplace;
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12. Study of Consumer Behaviour
It is concerned with
• what consumers buy,
• why they buy it,
• when, where and how they buy it,
• how often they buy it,
• how they consume it & dispose it
• how satisfied / dissatisfied they
become after using it.
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13. Study of Consumer Behaviour
Research shows that two different
buyers buying the same product may
have done it for
• different reasons,
• paid different prices,
• used in different ways,
• have different emotional attachments
towards the things and so on.
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14. Study of Consumer Behaviour
• The study of Consumer Behaviour is one
of the most important in business
education, because
• The purpose of a business is to create and
keep customers. Customers are created
and maintained through marketing
strategies.
• And the quality of marketing strategies
depends on knowing, serving, and
influencing consumers.
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15. Study of Consumer Behaviour
• In other words, the success of a business
is to achieve organisational objectives,
which can be done by the above two
methods.
• The knowledge & information about
consumers is critical for developing
successful marketing strategies because
it challenges the marketers to think about
and analyse the relationship between the
consumers & marketers, and the
consumer behaviour & the marketing
strategy.
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16. Benefits of Studying CB
• A Marketing Manager would like to
know how Consumer Behaviour will
help him to design better marketing
plans to get those plans accepted
within the company.
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17. Benefits of Studying CB
• In a non-profit service organisation,
such as a hospital, an individual in the
marketing department would like to
know the patients’ needs and how best
to serve those needs.
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18. Benefits of Studying CB
• Universities & Colleges now recognise
that they need to know about
Consumer Behaviour to aid in
recruiting students.
• “Marketing Admissions” has become
an accepted term to mean marketing
to potential students.
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19. Introduction to CB
• The study of Consumer Behaviour is
quite complex, because of many
variables involved and their tendency
to interact with & influence each other.
• These variables are broadly divided
into three major sections that have
been identified as the most important
general influences on Consumer
Behaviour.
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20. Introduction to CB
• Imagine three concentric circles,
• one at the outer most,
• one in the middle &
• one at the inner most,
• and they represent the following :
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21. The Rings (Circles) of Influence
Buying
Decision
Individual
Determinants
External
Influence
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22. 1. External Environmental Variables
• These factors controlled by the external
environments like the following form the
basis of external influences over the mind
of a customer (outer circle) :
– Culture, and Sub-culture,
– Social Class, and Social Group,
– Family, and Inter-Personal Influences,
• Other Influences are there (which are not
categorised by any of the above six, like
geographical, political, economical,
religious environment, etc.)
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23. 2. Individual Determinants of Behaviour
• Major individual determinants of
Consumer Behaviour are portrayed in
the middle ring. These are the human
mind and its attributes.
• These variables are personal in nature
and they are influenced by the above
set of external factors and in turn
influence the way consumers proceed
thro’ a decision making process
regarding products & services.
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24. 2. Individual Determinants of Behaviour
• These are :
–Personality & Self-concept,
–Motivation & Involvement,
–Perception & Information Processing,
–Learning & Memory,
–Attitudes.
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25. 3. The Consumer Decision Making
Process
• The buying decision comes as a
product of the complex interaction of
the external factors and the personal
attributes.
• The inner most circle represents the
consumer decision making process
regarding products & services,
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26. 3. The Consumer Decision Making
Process
• Those major steps are :
–Problem Recognition,
–Information Search,
–Evaluation of Application,
–Purchase Decision,
–Post-Purchase Behaviour.
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27. The Role of CB
• Frequently, it is observed that :
• Different people buying similar things
have different reasons to buy, &
• Different people having similar reasons
buy different things.
• Thus Marketers are frequently uncertain
about the variables that are at play
influencing & affecting consumers.
Sometimes this occurs because they don’t
clearly understand the extent of variables
that might be having an influence.
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28. The Role of CB
• The details of all external, internal,
environmental, economical etc. are
discussed above.
• Sometimes some variables are not
directly observable.
• Other times variables are known to the
marketers but their exact nature &
relative strength of influence is not
apparent.
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29. The Role of CB
• In these circumstances, it is useful to
understand the above mentioned
concepts and how the consumers behave,
so that their decision making process can
be predicted to a reasonable extent.
• The human mind being as complex as it is,
the understanding of the buying behaviour
of the consumers becomes a continuous
activity of application of various theories
& concepts by the marketers.
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30. END OF CHAPTER :
INTRODUCTION &
WHY STUDY CONSUMER
BEHAVIOR
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