Unit IV AMM- Consumer Behaviour Analysis

Advanced Marketing Management
Unit IV: Consumer Behaviour Analysis
• Meaning and Characteristics, Importance, Factors
Influencing Consumer Behaviour, Consumer
Purchase Decision Process, Buying Roles, Buying
Motives, Buyer Behaviour Models
Prepared by
Mr. Dayananda Huded M.Com JRF, NET, KSET
Teaching Assistant
Rani Channamma university, PG Centre, Jamkhandi
E-Mail: dayanandch65@gmail.com
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Mr. Dayananda Huded

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.
• Consumer behaviour is the study of how people make decisions
about what they buy, want, need, or act in regards to a product,
about what they buy, want, need, or act in regards to a product,
service or company.
• It is a study of the actions of the consumers that drive them to buy
and use certain products. Understanding consumer buying behavior
is most important for marketers as it helps them to relate better to
the expectation of the consumers.
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Definitions
• According to Pilliph Kotler “Consumer behaviour is the study of
how people buy, what they buy, when they buy, and why they buy.
• According to Soloman “Consumer behaviour is the study of the
processes involved when individuals or groups select, purchase,
use, or dispose of products, services, ideas, or experiences to satisfy
needs and desires.
• According to Professor Bearden and Associates “Consumer
• According to Professor Bearden and Associates “Consumer
behaviour is the mental and emotional process and the physical
activities of people who purchase and use goods and services to
satisfy needs and wants.
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Characteristics of Consumer Behaviour
• a) Consumer behavior is the part of human behavior: This cannot be
separated. Human behavior decides what to buy, when to buy etc. This is
unpredictable in nature. Based on the past behavioral pattern one can at least
estimate like the past he might behave.
• b) Learning the consumer is difficult and complex as it involves the study of
hum beings: Each Individual behaves differently when he is placed at different
situations. Every day is a lesson from each and every individual while we learn
the consumer behavior. Today one may purchase a product because of its smell,
tomorrow it may vary and he will purchase another due to some another reason.
tomorrow it may vary and he will purchase another due to some another reason.
• c) Consumer behavior is dynamic: A consumer's behavior is always changing
in nature: The taste and preference of the people vary. According to that
consumers behave differently. As the modern world changes the consumer's
behaving pattern also changes.
• d) Consumer behavior is influenced by psychological, social and physical
factors: A consumer may be loyal with a product due to its status values. Another
may stick with a product due to its economy in price. Understanding these factors
by a marketer is crucial before placing the product to the consumers.
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• e) Study of consumer behavior is crucial for marketers: Before producing
a product or launching a product, he has to go through a clear analysis of the
consumer behavior. If the people or prospects reject the product, he has to
modify it.
• f) Consumer behavior is a continuous process as it involves the process
starts before the buying and continuing after purchasing: Before buying
there will be high confusions and expectations about the product. After
buying it, if the buyer is satisfied with the product he shows a positive
behavior, otherwise negative.
behavior, otherwise negative.
• g) Consumer Behaviour involves Products, Services, Activities, and
Ideas: In the scope of consumer behaviour, not only products are included
but also the services, and activities (getting children vaccinated for polio),
and ideas (saying no to drugs). Thus consumer behaviour rotates around
offerings.
• h) Consumer Behaviour involves more than Buying
• i) Consumer Behaviour is a Dynamic Process
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Importance of Consumer Behaviour
• 1. To design production policies: This is the first importance of
consumer behaviour and it means that all the production policies have designed
taking into consideration the consumer preference so that product can be
successful in the market.
• 2. Know the effect of price on buying: This is the second consumer behaviour
importance and it means that consumer behavior can help in understanding the
effect of price on buying. Whenever the price is moderate on cheap more and
more customer will buy the product.
• After the time of production, there comes a time in which the company has to
• After the time of production, there comes a time in which the company has to
decide what the price of our product will be because it helps to divide the
categories of the customer and also helps to attain more sales.
• 3. Exploit the market opportunities: This is the third importance or
significance of consumer behaviour and it means that the change in consumer
preference can be a good opportunity for the mark to bring something which
cannot as a revaluation in the market. For Example– When palm pops introduced
in the market, it was successful due to the stylish and sleek design.
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• 4. Design marketing mix: This is the fourth importance of consumer
behaviour and it means that consumer behavior is very much vital in
designing and approaching marketing mix to be chosen (product, price,
place, and promotion).
• 5. Implement STP Strategies: This is the fifth importance of consumer
behaviour and it means that the segmentation, targeting,
and positioning strategies are implemented by understanding the
behaviour of consumers towards the various brands.
• 6. Helps in understanding diversified preferences: This is the
sixth importance of consumer behaviour and it means that the consumer
preferences are diversified in nature and their keep on changing over a
particular period of time. Nowadays consumers are more value
conscious and they want to extract the maximum benefits from a
particular product of a brand.
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• 7. Understanding of various roles played by consumers:
This is the seventh importance and it means that there are various roles
played by the consumers in the consumer decision-making process. These
roles are initiators, influencers, decider, users, buyers, and gatekeeper. The
steps of the consumer decision-making process can be described are as
follows:-
– Need Recognition,
– Information Search,
– Evaluation of Alternatives,
– Purchase Decisions,
– Purchase Decisions,
– Post Purchase Behaviour.
• 8. Results in customers satisfaction:
This is the eighth importance of consumer behaviour and it means when
the designed product is matching the expectations of the customer than they
result in customer satisfaction. In case the product is exceeding the
expectations of the customer then its result in customer delight.
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7 O’s Framework of Consumer Behaviour
1. Occupants: Who is the
Consumer
2. Object of Purchase: What
does the Consumer Buy
3. Objective: Why is the
Consumer Buying
4. Occasion: When do they
Buy or How Often do they Buy
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Buy or How Often do they Buy
and Use
5. Outlets: Where do they Buy
6. Operations: How do they
Buy
7. Organisation: Who is
Involved

Factors Influencing Consumer Behaviour
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• 1. Cultural Factors
• Culture: The set of basic values, perceptions, wants, and
behaviours learned by a member of society from family and other
important institutions.
• Consumers live in a complex social and cultural environment. The
types of products and services they buy can be influenced by the
overall cultural context in which they grow up to become
overall cultural context in which they grow up to become
individuals.
• Below are some of the important cultural factors given:
– Culture
– Subculture
– Social Class
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• 2. Social Factors
• Social factors, in turn, reflect a constant and dynamic influx through
which individuals learn different consumption meanings. Below are some
of the important social factors given:
– Family
– Reference Groups
– Roles and status
• 3. Personal Factors
• 3. Personal Factors
• A person’s consumption behaviour is shaped by his personal
characteristics. Below are some of the important personal Factors given:
– Age
– Income
– Personality
– Self-concept
– Occupation
– Lifestyle
– Gender
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• 4. Psychological Factors
• Psychological factors also influenced consumers. Internal psychological
factors also direct the decision-making process. These factors influence
the reason or ‘why’ of buying.
• Below are some of the important psychological factors given:
– Motivation
– Learning
– Attitudes and Beliefs
– Perception
• 5. Economic Factors
• Economic factor also has a significant influence on buying decision of
consumer behavior.
• Below are some of the important economic factors given:
– Personal and Family Income
– Income Expectations
– Consumer Credit
– Liquid Assets
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Consumer Purchase Decision Process
• 1. Problem Recognition
• It’s in fact, the beginning of the buying process It is a perception. We realize what
we should ideally have and what we have at present. The decision to buy a
particular product depends on the necessity of that product to the buyer from
FMCG to a luxury product
• 2. Information Seeking
• This follows the problem recognization stage. The search is mostly directed
toward the products that are consistent with our needs. The amount and type of
information that is collected are related to the product in relation to the need for
information that is collected are related to the product in relation to the need for
the product information that can be gathered by ads, visiting the store through the
internet, or by talking with your friends.
• 3. Evaluation of Alternatives
• When the consumer seeks information he realizes the alternative choices
available and gets the background against which choices can be made. The brand
that consumer considers while making a purchase decision forms an evoked set
which is a small proportion of the total available brands. Promotion, especially
advertising provides information to consumers enabling them to evaluate.
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• 4. Buying Decision
• After the alternative choices are evaluated The brands are ranked &
the top-ranking brand may be purchased. Ultimate buying decisions
may undergo a change if the preferred brand is not available.
• 5. Post-Purchase Evaluation
• Now the product has been bought and consumed. It is the stage for
post-purchase evaluation. The consumer may either be satisfied or
dissatisfied. A satisfied consumer stores the product information in his
dissatisfied. A satisfied consumer stores the product information in his
memory and uses it next time at the time of the problem recognition
stage. A dissatisfied consumer may go in for another brand next time
he is out to buy. He will seek additional & will consider another set of
brands.
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Consumer Purchase Decision Process
Problem Information
Evaluation
of
Purchase
Post
Purchase
Stage – 1 Stage – 2 Stage – 3 Stage – 4 Stage – 5
Problem
Recognition
Information
Search
Evaluation
of
Alternatives
Purchase
Decision
Post
Purchase
Behaviour
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Buying Roles
• Consumer behaviour is influenced not only by consumer personali- ties
and motivations, but also by the various participant in the buying process.
Consumer decision making is an intricate process.
• To understand how consumers actually take the decision to buy a product,
it is important for marketers to identify who makes and has input in the
decision-making process. In a buying process there are various
participants involved.
• Thus we can distinguish roles, people might play in a buying decision.
– Initiator
– Influencer
– Influencer
– Gatekeeper
– Decider
– Buyer
– Users
– Maintainer
– Preparer
– Disposer
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• 1. Initiator: The person who first suggest the idea of buying the particular
product or service.
• An initiator is a person who first gets the thought or gives the suggestion/idea
of buying a particular product. A child might play the role of an initiator in
the purchase process of chocolate.
• 2. Influencer: An influencer is a person who directly or indirectly has some
influence on the final buying decision of others. The parents play the role of
influencers in the purchase process of chocolate.
• A person whose view or idea or advice influences the buying decision.
• Influencer is a person who influences the buying decision, actual
purchase or the use of product or service. Influencer can be a
technical expert, consultant or anyone who provides input for the
buying decision.
• For example, a salesperson might influence you to buy a product.
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• 3. Gatekeeper: A gatekeeper is a person who permits the flow of certain information and
restricts the flow of some set of information. Parents play the role of a gatekeeper in the
selection of movies for children.
• A gatekeeper is the one who Influences the processing of information. The gatekeeper
may possess a greater expertise in acquiring and evaluating the information.
• 4. Decider: A decider is a person who finally determines part or the whole of the buying
decision, ie, all quantity like whether to buy, what to buy, how to buy, when to buy, or
where to buy are considered. In the event of buying baby products, the mother plays the
role of the decider.
• A decider is the one who vets what to buy, how to buy, when to buy and from where to
• A decider is the one who vets what to buy, how to buy, when to buy and from where to
buy.
• 5. Buyer: The buyer is the person who actually purchases and pays for the purchase. In a
typical family decision making process, the father plays the role of the buyer who is
involved in the economic transaction.
• A buyer is the one who is involved in the physical activity of making a purchase and
conducts the final transaction or exchange. At the time of purchasing the buyer can
negotiate on the price.
• For example, housewife may be the buyer who actually buys all the foodstuffs, rations and
toiletries of the family.
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• 6. Users: The user is the person who actually uses or consumes the product or
service. In most of the grocery product purchase, the entire family uses the
product. In a typical purchase of a washing machine, the housewife plays the
role of the user.
• 7. Maintainer: Members who service or repair the product so that it will
provide continued satisfaction is a maintainer.
• 8. Preparer: The preparer is the person who changes the product to a usable
form for consumption.
• For Example: In a typical family consumption of food items, the mother plays
the role of preparer.
• 9. Disposer: The disposer is the person who finally disposes of the package of
the product.
• For Example: The mother plays the role pf disposer after the product is
consumed by the family.
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Buying Motives
• Meaning:
• A motive is the inner state that moves, or prompts a person to action.
– W. J. Stanton,
• “A motive may be defined as a drive or an urge for which can
individual seeks satisfaction. It becomes a buying motive when the
individual seeks satisfaction through the purchase of something.”
• In the words of D. J. Durdian, “Buying motives are those influences or
• In the words of D. J. Durdian, “Buying motives are those influences or
considerations which provide the impulse to buy, induce action or
determine choice in the purchase of goods and services.”
• According to Berelson and Steiner – “A motive is the inner state that
energizes, activates or moves and that directs or channels behaviour to
work goals.”
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Buying Motives
• Money
• Vanity – (Affection)
• Acquisitiveness: Excessive interest in acquiring money or material things. Ex.
Collection of Coins
• Rivalry: Companies that compete to sell the same goods can become rivals as
each seeks to convince consumers to purchase its products, to the exclusion of the
products.
• Adornment: a thing which adorns or decorates; an ornament.
• Ex. cosmetics, jewellery, clothing accessories, facial hair, fingernail modification,
tattooing etc.
• Cleanliness
• Amusement - the state or experience of finding something funny.
• Ex. Watching a basketball game and flying a kite etc.
• Companionship: Companionship is a term often used in the context of
friendship. A feeling of fellowship or friendship.
• Mental Culture - cultural beliefs, values, and norms.
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Buying Motives
• Appropriateness - the quality of being suitable or right for a
particular situation or occasion.
Ex. Purchasing of Products in home opening ceremony, birthday,
marriage, etc.
• Ambition: Purchase of anything to achieve his/her intension.
• Inhibitiveness – Prohibit or forbid or divert from a purpose
• Reverence – Admiration or adoration
• Tastes
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• Tastes
• Gender
• Limitation
• Curiosity
• Self-preservation
• Sympathy
• Gratitude
• Patriotism and so on.

Classifications of Buying Motives
• 1. Physical, Psychological and Sociological Buying Motives:
• The psychological buying motives are related to the satisfaction of basic
human needs for subsistence such as satisfaction of the needs for food,
shelter and clothes, and security. The psychological buying motives relates to
the need for prestige or self-preservation, etc. the sociological buying
motives are related to the motives that exist at present and is expected in all
the social situations.
• 2. Acquired and Inherent Buying Motives:
• The acquired buying motives are learned motives and are influenced by the
environment factors. Such motives are related to socio-economic conditions
and the level of education, such as economy, information, work efficiency,
profit facility, quality, beauty, fashion, social presage, acceptance, etc.
• The inherent buying motives are present in a person from his birth. It belongs
to basic human instincts whereas the acquired buying motives are concerned
with the environment. They are influenced by hunger, thirsts, sleep, leisure,
security, playing entertainment, etc.
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• 3. Primary and Selective Buying Motives:
• The primary buying motives increase the general demands for products and not
the specific demands for a specified product/brand. The demands for radios,
TVs, cars, motorcycles, etc. fall under this category of primary motives.
• The selective buying motives influence for the purchase of specific brands, for
instance, the demands for Bajaj’s Chetak Scooter, Onida TV, Philips Radios,
etc.
• 4. Conscious and Dormant Buying Motives: The conscious buying motives
are such motives, which are identified by the buyer without any help from
marketing functions, like advertising, personal selling or promotional tools.
marketing functions, like advertising, personal selling or promotional tools.
The conscious buying motives influence the satisfaction of presently existing
needs of a customer. Such buying motives take shape within the sub-conscious
minds of the customers and are not influenced by the external environmental
factors.
• The dormant buying motives are silent motives and do not influence the buyers
until their attention is invited by the marketing functions. Thus, dormant
buying motives are related with satisfaction of those needs which are created
by the marketing functions. A consumer does not possess the knowledge of
such needs without the persuasion of marketing activities.
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• 5. Rational and Emotional Buying Motives:
• Alfred Gross has classified the buying motives as emotional and rational.
• A customer takes rational or economic buying decisions for availing
at least a few of the following advantages:
• (i) Where the buying is more profitable.
• (ii) Where there is saving of time.
• (iii) Where there is similarity/uniformity in the products.
• (iv) Where the item is simple to operate.
• (v) Where there are different uses of the product.
• (v) Where there are different uses of the product.
• (vi) Where it saves the space in keeping the product.
• (vii) Where there is economy in use.
• (viii) Where the product is of good design.
• (ix) Where it is a better product comparing to other products. Etc.
• Emotional buying motives influence a person to purchase certain goods or
services not because of its rationality, but because of his emotion.
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• 6. Product and Patronage Buying Motives:
• Product buying motives motivates a person towards purchasing a
special products. This motive is a generated by the physical and
psychological features of the product, such as design, colour, size,
package, quality, price etc.
• Patronage motive influences a person to purchase the products of a
specific seller, dealer or a producer. If a customer is satisfied with
specific seller, dealer or a producer. If a customer is satisfied with
the product of a specific seller/producer, he prefers to buy the
products of that seller/producer because of certain advantages, such
as home delivery of goods purchased, a reasonable price, location
of the seller/shop, assortment of goods, goodwill demonstration of
the product and decoration of the shop, and the good behaviour of
the seller.
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Buyer Behaviour Model
Buyer Behaviour Models
1. Howard Sheth
1. Traditional Models 2. Contemporary Models
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1. Economic Model
2. Learning Model
3. Psychoanalytical
Model
4. Sociological
Model
1. Howard Sheth
Model
2. Nicosia Model
3. Stimulus-Response
Model
4. Engel, Blackwell
and Minard
Model

Traditional Models
• 1. The Economic Model: According to the economic model of
buyer behaviour, the buyer is a rational man and his buying
decisions are governed by the concept of utility. If he has a certain
amount of purchasing power, a set of needs to be met, and a set of
products to choose from, he will allocate this amount over the set of
products in a very rational manner with the intention of maximising
the utility / benefit / need satisfaction.
• 2. The Learning Model: According to the learning model, which
• 2. The Learning Model: According to the learning model, which
takes its cue from the Pavlovian stimulus-response theory on
learning-buyer behaviour can be influenced by manipulating the
drives, stimuli and responses of the buyer. The model rests on the
human ability of learning, forgetting, and discriminating.
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• 3. The Psychoanalytical Model: The psychoanalytical model
draws mainly from Freudian psychology. According to this model, a
consumer has a complex set of deep-seated motives that drive him
towards certain behaviour. The buyer has a private world with all
his hidden fears, suppressed desires and totally subjective longings.
Appealing to these desires and longings can influence his buying
action.
• 4. The Sociological Model: According to the sociological model,
• 4. The Sociological Model: According to the sociological model,
the individual buyer is influenced in his buying behaviour by
society – by intimate groups as well as social classes. His buying
decisions are not totally governed by utility; he has a desire to
emulate, follow, and fit in with his environment. And, several of his
buying decisions may be governed by the compulsions arising out
of his being a social creature.
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Contemporary Models
• 1. Howerd and Sheth Model
• One of model that represent consumer behaviour on the market.
• It attempts to explain the rationality of choice of the product by the
consumer under conditions of incomplete information and reduced
processing capability.
• Howarth Sheth Model substantiates the complexity involved in
consumer behaviour and takes into consideration various factors
like attitudes of consumer, their perception levels and learning
like attitudes of consumer, their perception levels and learning
capacity that influence consumer behaviour.
• This model Consists of Four Variables
• 1. Input variables
• 2. Output variables
• 3. Hypothetical constructs: Perceptual constructs and Learning
constructs
• 4. Exogenous variables
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• 1. Input Variables:
• Significative Stimuli: These are tangible product characteristics like
uniqueness, quality etc.
• Symbolic Stimuli: Perception of an individual regards to a product.
• Social Stimuli: It focuses on all factors belong to society.
• 2. Output Variables in Howarth Sheth Model refers to the final
purchase decision and satisfaction or dissatisfaction levels of a
purchase decision and satisfaction or dissatisfaction levels of a
consumer after making a purchase. High satisfaction results in
elevated brand performance while dissatisfaction leads to lower
brand performance.
• 3. Hypothetical constructs: Hypothetical constructs include
psychological variables such as motivation, attitude, learning, etc.
• Hypothetical constructs categorised into two
• i.e. Perceptual Constructs and Learning Constructs
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• Perceptual Constructs: Deals with the way that individual percieves
and responds to the information from the input variables.
• Learning Constructs: Deals with the stages from the buyer motives
to the satisfaction in a buying decision.
• 4. Exogenous Variables: Which is also called as external variables.
• External variables refers to the indirect influence exerted on the
decision making process of consumers by factors such as finacial
decision making process of consumers by factors such as finacial
status, social class, necessity to purchase and personality traits of
individuals.
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2. Nicosia Model
• This model shows the interactive relationship between the company and
the consumer. They arise between them for mutual communication.
• Company communicates with consumers through promotional activities,
while consumers by making purchases.
• The model tries to establish the links between a firm and its consumer –
how the activities of the firm influence the consumer and result in his
decision to buy. The messages from the firm first influences the
predisposition of the consumer towards the product. Depending on the
predisposition of the consumer towards the product. Depending on the
situation, he develops a certain attitude towards the product.
• It may lead to a search for the product or an evaluation of the product. If
these steps have a positive impact on him, it may result in a decision to
buy. This is the sum and substance of the ‘activity explanations’ in the
Nicosia model. The model groups these activities into four basic fields.
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• Field One with two sub-fields – the firm’s attributes and the
consumer’s attributes. An advertising message from the firm reaches
the consumer’s attributes. Depending on the way the message is
received by the consumer, he develops a certain attitude and this
becomes the input for Field Two.
• Field Two is the area of search and evaluation of the advertised
product and other alternatives. If this process results in a motivation to
buy, it becomes the input for Field Three.
buy, it becomes the input for Field Three.
• Field Three consists of the act of purchase. And
• Field Four consists of the use of the purchased item.
• There is an output from Field Four – feedback of sales results of the
firm.
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3. Stimulus-Response Model
• Another model of consumer behavior, called the stimulus-
response or “black box” model, focuses on the consumer as a
thinker and problem solver who responds to a range of external
and internal factors when deciding whether or not to buy.
• Examples: You are hungry so you eat some food. A rabbit gets
scared so it runs away. You are cold so you put on a jacket.
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• Buyer Behavior As Problem Solving
• A common way for marketers to think about consumer behavior today is as a set
of activities a person goes through in order to solve problems. This problem-
solving process is triggered when a consumer identifies some unmet need. For
instance, a family consumes all of the milk in the house, or a birthday party is
coming up and a gift is needed, or a soccer team is planning an end-of-season
picnic. Each buying scenario presents a problem the buyer must solve. These
problems can involve two types of needs: physical (such as a need for milk, a
birthday gift, or picnic food) or psychological (for example, the need to
birthday gift, or picnic food) or psychological (for example, the need to
feel secure, the need to be loved, or the need to have fun).
• This problem-solving process also involves needs and wants. A need is a basic
deficiency for an essential item. You need food, water, air, security, and so forth.
A want places specific, personal criteria on how a need must be fulfilled. To
illustrate, when we are hungry, food is a need. When we have a specific food item
in mind, that item is a want. That difference is illustrated by the familiar
scenario of standing in front of a full refrigerator and complaining that there is
nothing to eat.
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4. Engel-Kollat-Blackwell and Minard Model (1978)
• Engle, Blackwell Model is essentially a conscious problem solving
and learning model of consumer behaviour. This model has a good
decsription pf active information seeking and evaluation processes
of consumer, reflecting consumer behaviour process during
choosing product or service.
• In this model, they view consumer behaviour as a decision process
and identify five activities occurring in this process over a period of
time. They are;
time. They are;
– Problem recognition
– Information search
– Evaluation of alternatives
– Choice
– Outcome
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