3. Consumer is a person who decides on the
purchase of a good or a service for personal use,
based on personal preferences, beliefs, and needs
or the influence of advertising.
Understanding consumer behaviour enables firms
to launch products that people need and want,
thereby, increasing their sales and profitability. If a
firm fails to understand what consumers need or
how they will respond to the launch of a new
product, most likely it will incur losses.
Shweta Chauhan
6. CONSUMER BEHAVIOUR
According to Ostrow & Smith
“consumer behaviour refers to the actions
of consumers in the market place and the
underlying motives for those actions.
Marketers expect that by understanding
what causes consumer to buy particular
goods and services they will be able to
determine which products are needed in
the market place, which are obsolete, and
how best to present the goods to the
consumer.
Shweta Chauhan
7. Consumer Behaviour
The process and activities people engage in when
searching for, selecting, purchasing, using,
evaluating, and disposing of
products and services
8. Why do we need to study
Consumer Behaviour?
Consumer preferences are changing and become highly diversified
Consumer research has vividly pointed out that customers dislike
using identical products and prefer differentiated products
Meeting of special needs of customer's requirement market
segmentation
Rapid introduction of new products with technological
advancement has made the job of studying consumer behaviour
more imperative
Consumer behaviour can be used to sell products that might not
sell easily
Consumers do not always act or react, as the theory would suggest
Because no longer can we take the customer/consumer for granted
10. IMPORTANCE OF CONSUMER
BEHAVIOUR
Shweta Chauhan
•To design production policies,
•Know the effect of price on buying,
•Exploit the market opportunities,
•Design marketing mix,
•Implement STP strategies,
•Helps in understanding diversified preference,
•Understanding of various roles played by
consumer,
•Results in consumer satisfaction
11. Nature of Consumer Behaviour
1. Complex Nature: Since every individual has different needs and desires, and marketers have to target
customers as per their needs. Therefore, it becomes a complex task for the marketers to find the pattern
of every individual.
2. Varies for different consumers: Different consumers have different needs and desires. Hence, It is
impossible for marketers to target each and every consumer for their products. Therefore, Marketers try to
identify their target consumers for the products and services.
3. Dynamic Nature: The behaviour and mentality of each consumer evolves with the time. Therefore, the
marketers may find any potential customer for their products and services who once hated them.
4. Influenced by various factors: Consumer behaviour is also influenced by certain factors like friends,
family, culture, lifestyle etc.
EX: People promoting different products among their peers due to the satisfaction they achieved by using it.
5. Important for Marketers: Consumer Behaviour is very important for marketers as they have to develop
their products as per the behaviour of consumers that whether they are willing to purchase it or not.
6. Brand Loyalty: Consumers have a tendency to buy products and services from a certain organization
which they may like due to certain reasons. They develop a brand loyalty towards these organizations and
tends to buy only their products even if their rival is performing better in the market.
13. Significance of Consumer
Behaviour
Shweta Chauhan
1. Implementation of the marketing concept: Consumer behaviour helps to implement the
modern marketing concept. The Modern marketing concept is customer driven which focuses on
solving the problems of customers and satisfying their needs. Consumer behaviour identifies the
the same problems and needs and hence, helps is developing the product as per customer
requirement.
2. Planning product differentiation and Market Segmentation: After identification of consumer
behaviour, the product developed will the only one of its kind, because it has been developed
through proper research and consumer behavior analysis, so the product will automatically be
different from all the products available in the market while satisfying the consumer needs.
Again, to divide the target market into different segments to focus better on different consumers,
proper study of consumer behaviour is necessary.
3. Selection of distribution channels: Consumer Behavior Analysis not only tells what consumers
want to buy but also from where they prefer to buy.
There may be different categories of consumers. First category only shops online, Second category
only want products from prestigious offline stores and the third category may settle for the ordinary
stores. Therefore, consumer behaviour also inform us how much we should focus on a certain
distribution channel.
4. Designing promotional techniques: Promotional techniques include advertisement
messages, media, direct selling, online selling etc. Proper study of consumer behaviour will show
the psychology of consumer towards different promotional formats. It will tell how much a
consumers is influenced from a certain form of advertisement and promotion.
14. Scope of Consumer Behaviour
1) Consumer behaviour and marketing management : Effective business managers realise the importance of marketing to the
success of their firm. A sound understanding of consumer behaviour is essential to the long run success of any marketing
program. In fact, it is seen as a comerstone of the Marketing concept, an important orientation of philosophy of many
marketing managers. The essence of the Marketing concept is captured in three interrelated orientations consumers needs and
wants, company integrated strategy.
2) Consumer behaviour and non profit and social marketing : In today's world even the non-profit organisations like
government agencies, religious sects, universities and charitable institutions have to market their services for ideas to the
"target group of consumers or institution." At other times these groups are required to appeal to the general public for support
of certain causes or ideas. Also they make their contribution towards eradication of the problems of the society. Thus a clear
understanding of the consumer behaviour and decision making process will assist these efforts.
3) Consumer behaviour and government decision making : In recent years the relevance of consumer behaviour principles to
government decision making. Two major areas of activities have been affected:
i) Government services: It is increasingly and that government provision of public services can benefit significantly from an
understanding of the consumers, or users, of these services.
ii) consumer protection: Many Agencies at all levels of government are involved with regulating business practices for the
purpose of protecting consumers welfare.
4) Consumer behaviour and demarketing: It has become increasingly clear that consumers are entering an era of scarcity in
terms of some natural gas and water. These scarcities have led to promotions stressing conservation rather than consumption.
In other circumstances, consumers have been encouraged to decrease or stop their use of particular goods believed to have
harmful effects. Programs designed to reduce drug abuse, gambling, and similar types of conception examples. These actions
have been undertaken by government agencies non profit organisations, and other private groups. The term "demarketing"
refers to all such efforts to encourage consumers to reduce their consumption of a particular product or services.
5) Consumer behaviour and consumer education: Consumer also stands to benefit directly from orderly investigations of their
own behaviour. This can occur on an individual basis or as part of more formal educational programs. For example, when
consumers learn that a large proportion of the billions spend annually on grocery products is used for impulse purchases and
not spend according to pre planned shopping list, consumers may be more willing to plan effort to save money. In general, as
marketers that can influence consumers' purchases, consumers have the opportunity to understand better how they affect their
15. What is consumer research process?
Consumer research plays a very
important aspect, especially when a
company decides to launch a new product
into the market. After conducting various
surveys and focus groups, companies
analyze the consumer data and then make
recommendations based on the results.
Shweta Chauhan
16. The Consumer Research
Process
The six major steps in the consumer
research process are:
defining the objectives of the research
collecting and evaluating secondary data
designing a primary research study
collecting primary data
analyzing the data
preparing a report on the findings
17. Figure 2.2 The Consumer Research Process
Develop Objectives
Collect Secondary Data
Design Qualitative Research
• Method
• Screener questionnaire
• Discussion guide
Prepare Report
Analyze Data
(Subjective)
Conduct Research
(Using highly trained
interviewers)
Exploratory
Study
Prepare report
Analyze Data
(Objective)
Collect Primary Data
(Usually by field staff)
Design Quantitative Research
• Method
• Sample design
• Data collection instrument
18. Developing Research
Objectives
Defining purposes and objectives helps
ensure an appropriate research design.
A statement of objectives helps to
define the type and level of information
needed.
20. Collecting Secondary Data
Secondary information is any data originally
generated for some purpose other than the
present research objectives.
Provides clues and direction for the design
of primary research.
22. Table 2.2 Major Sources of Secondary Data
Internal sources include company profit-loss statements,
balance sheets, sales figures, sales-call reports, invoices,
inventory records, and prior research reports.
Internal
Sources
Statistical Abstract of the U.S., updated annually, provides summary
data on demographic, economic, social, and other aspects of the
American economy and society.
Country and City Data Book, updated every three years, presents
statistical information for counties, cities, and other geographical
units on populations, education, employment, aggregate and
median income, housing, bank deposits, retail sales, etc.
U.S. Industrial Outlook provides projections of industrial activity by
industry and includes data on production, sales,
shipments,employment etc
Marketing Information Guide provides a monthly annotated
bibliography of marketing information.
Other government publications include the Annual Survey of
Manufacturers; Business Statistics; Census of Manufacturers;
Census of Population; Census f Retail Trade, Wholesale Trade, and
Selected Service Industries; Census of Transportation; Federal
Reserve Bulletin; Monthly Labor Review; Survey of Current
Business; and Vital Statistics Report.
Governmen
t
Publication
s
23. Table 2.2 continued
Business Periodicals Index, a monthly, lists business articles
appearing in a wide variety of business publications.
Standard and Poor’s Industry Surveys provides updated
statistics and analyses of industries.
Moody’s Manuals provides financial data and names of
executives in major companies.
Encyclopedia of Associations provides information on every
major trade and professional association in the United States.
Marketing journals include the Journal of Marketing, Journal of
Marketing Research, and Journal of Consumer Research.
Useful trade magazines include Advertising Age, Chain Store
Age, Progressive Grocer, Sales and Marketing Management,
and Store.
Useful general business magazines include Business Week,
Fortune, Forbes, and Harvard Business Review.
Periodicals
and Books
24. Table 2.2 continued
A.C. Nielsen Company provides data on products and brands sold
through retail outlets (Retail Index Services), data on television
audiences (Media Research Services), magazine circulation data
(Neodata Services, Inc.), etc.
Market Research Corporation of America provides data on weekly family
purchases of consumer products (National Consumer Panel); data on
home food consumption (National Menu Census); and data on 6,000
retail, drug, and discount retailers in various geographical areas (Metro
Trade Audits).
Selling Areas-Marketing, Inc., provides reports on warehouse
withdrawals to food stores in selected market areas (SAMI reports).
Simmons Market Research Bureau provides annual reports covering
television markets, sporting goods, proprietary drugs, etc., giving
demographic data by sex, income, age, and brand preferences
(selective markets and media reaching them).
Burke Marketing Services, Inc., provides TV campaign testing in
controlled marketing labs, marketing modeling, retail store audits,
physiological measures of advertising stimuli, pre- and post-TV copy
testing, and customer survey research.
Markets Facts, Inc., provides consumer mil panel, market test-store audit
services, shopping mall facilities, WATS telephone interviewing, and ad
hoc survey research.
Other commercial research houses selling data to subscribers include
the Audit Bureau of Circulation, Audits and Surveys, Dun and Bradstreet,
Opinion Research, Roper-Starch, and Arbitron.
Commercia
l Data
Source: Adopted from Philip Kotler, Marketing Management: Analysis, Planning, Implementation, and Control 9th ed. (Upper Saddle River, NJ:
Prentice Hall, 1997).
28. Observational Research
Helps marketers gain an in-depth
understanding of the relationship between
people and products by watching them
buying and using products.
Helps researchers gain a better
understanding of what the product
symbolizes.
Widely used by interpretivist researchers.
29. Experimentation
Can be used to test the relative sales
appeal of many types of variables.
Only one variable is manipulated at a
time, keeping other elements constant.
Can be conducted in laboratories or in the
field.
31. Table 2.3 Comparative Advantages of Mail,
Telephone, and Personal Interview Surveys
MAIL TELEPHONE
PERSONAL
INTERVIEW
ON-LINE
Cost Low Moderate High Low
Speed Slow Immediate Slow Fast
Response
rate
Low Moderate High
Self-
selection
Geographi
c flexibility
Excellent Good Difficult Excellent
Interviewe
r bias
N/A Moderate Problematic N/A
Interviewe
r
supervisio
n
N/A Easy Difficult N/A
Quality of
response
Limited Limited Excellent Excellent
35. Questionnaires
Used primarily for quantitative research.
Can be sent in the mail, or administered
by interviewers in person or by telephone.
Can be disguised or undisguised as to its
true purpose.
Questions can be open-ended or closed-
ended.
36. Personal Inventories
Presents a series of statements to which
respondents indicate their degree of
agreement or disagreement.
An inventory presents a list of statements,
while a questionnaire asks a series of
questions.
37. Attitude Scales
The three most frequently used scales
are:
Likert scales: easy for researchers to prepare
and interpret, and simple for consumers to
answer.
Semantic differential scales: relatively easy to
construct and administer.
Rank-order scales: subjects rank items in
order of preference in terms of some criteria.
38. Figure 2.3 Example of a Likert Scale
Pleaseplace the numberthat best indicateshow stronglyyouagreeor disagreewitheach of the following
statementsabout shopping on-linein the space to the leftof the statement.
1 = AgreeStrongly
2 = Agree
3 = NeitherAgreeor Disagree
4 = Disagree
5 = DisagreeStrongly
_____a. It is fun to shoponline.
_____b. Productsoftencostmore on-line thantheyare worth.
_____c. It is a good way to find out about newproducts.
_____d. I’mafraidto give out my creditcard numberon-line.
_____e. I can shop wheneverI want--evenat 2 o’clockin the morning.
_____f. SomeWeb sitesreallyencourageyou to browse.
_____g. It’seasyto comparedifferent makes and modelsone-line.
39. Figure 2.5 Rank-Order Scales
A. Pleaserankthefollowinge-mailprovidersintermsof easeof accessby placinga 1 infrontof the
serviceyou thinkisbest,a 2 alongsidethe secondbest, andcontinuinguntilyou haverankedall
sixserviceproviders.
_____AmericaOnline _____AT&TWorldnet
_____Netscape _____Juno
_____MicrosoftExplorer _____Erols
B. Rankthefollowingcomputermanufacturersintermsof hotlinehelpby placinga 1 next to theone
whoprovidesthebesttelephonehelpa 2 nextto thesecondbest,untilyouhaverankedallsix.
_____IBM _____HewlettPackard
_____Dell _____Gateway
_____Compaq _____NEC
41. Depth Interviews
A lengthy non structured interview
between a respondent and a highly
trained interviewer.
Interviewer minimizes his or her own
participation after establishing the general
subject matter.
Can provide marketers with valuable ideas
about product design and provide insights
for positioning or repositioning the
product.
42. Focus Group
A qualitative research
method in which about
eight to ten persons
participate in an
unstructured group
interview about a product
or service concept.
43. Focus Groups
Consists of 8 to 10 respondents who meet
with a moderator-analyst for a focused group
discussion.
Respondents encouraged to discuss their
interests, attitudes, reactions, motives,
lifestyles, feelings about the product or
product category, usage experience, etc.
Respondents recruited on the basis of
consumer profiles, based on specifications
defined by marketing management.
44. Figure 2.6 Selected Portions of a
Discussion Guide
1. Why did you decide to use your current cellular company?
(Probe)
2. How long have you used you current cellular company?
(Probe)
3. Have you ever switched services? When? What caused
the change? (Probe)
4. What do you think of the overall quality of your current
service? (Probe)
5. What are the important criteria in electing a cellular
service? (Probe)
Examples of Probe questions:
a. Tell me more about that...
b. Share your thinking on this…
c. Does anyone see it differently...
45. Projective
Techniques
Research procedures
designed to identify
consumers’ subconscious
feelings and motivations.
These tests often require
consumers to interpret
ambiguous stimuli such as
incomplete sentences,
cartoons, or inkblots.
46. Projective Techniques
Consist of a variety of disguised “tests”
that contain ambiguous stimuli.
Sometimes administered as part of a
focus group, but usually used with depth
interviews.
The theory is that respondents’ inner
feelings influence how they perceive
stimuli.
47. Metaphor Analysis
Based on belief that metaphors are the most
basic method of thought and communication.
Zaltman Metaphor Elicitation Technique
(ZMET) combines collage research and
metaphor analysis to bring to the surface the
mental models and the major themes or
constructs that drive consumer thinking and
behavior.
Consumer values also play an important role
in understanding consumer behavior.
49. Table 2.4 Probability and Nonprobability
Sampling Designs
PROBABILITY SAMPLES
Simple random
sample
Every member of the population has a known
and equal chance of being selected.
Systematic
random sample
A member of the population is selected at
random and then every “nth” person is
selected.
Cluster (area)
sample
The population is divided into mutually
exclusive groups (such as blocks), and the
researcher draws a sample of the groups to
interview.
Stratified random
sample
The population is divided into mutually
exclusive groups (such as age groups), and
random samples are drawn from each group.
50. Table 2.4 continued
NONPROBABILITY SAMPLES
Convenience
sample
The researcher selects the most accessible
population members from whom to obtain
information (e.g., students in a classroom)
Judgment sample The researcher uses his or her judgment to
select population members who are good
sources for accurate information (e.g., experts
in the relevant field of study).
Quota sample The researcher interviews a prescribed
number of people in each of several
categories (e.g., 50 men and 5 women).
51. Analysis
Qualitative Research: Moderator
or test administrator usually
analyzes responses.
Quantitative Research:
Researcher supervises the
analysis.
Open-ended responses are coded
and quantified
Responses are tabulated and
analyzed
52. Conducting A Research
Study
Researchers often adapt the research
process to the special needs of the study.
Together with the marketing manager, the
researcher specifies the parameters of the
population to be studied.
A qualitative study might be undertaken first
to gather information about the target
population's attitudes and concerns about
certain items.
Then a quantitative study may be conducted
to confirm and attach “hard” numbers to the
findings.
![BY - SHWETA CHAUHAN
[ASSISTANT PROFESSOR]
MBA GOLD MEDALIST
Consumer
Behaviour](https://image.slidesharecdn.com/cb1-210503172406/85/Cb1-1-320.jpg)
