CONSUMER BEHAVIOUR

SESSION 1

Rajiv Vohra
 OBJECTIVE OF THE SESSION

 Course Outline
 Method of Evaluation
 Criteria of Evaluation
 Significance of studying Consumer Behaviour
 Consumer Behaviour Introduction
 Individual Buying Roles
 Individual Buying Behaviour
 Applications of Consumer Behaviour
 Consumer Behaviour Model
 Case Study
 COURSE OUTLINE
 Introduction to Consumer Behaviour
 Consumer Decision Making Process
 Problem Recognition
 Search & Evaluation
 Purchasing Process
 Post purchase Behaviour
 Individual Determinants of Consumer Behaviour
 Personality & Self Concept
 Motivation & Involvement
 Attitudes & Change of Attitude
 Environmental Influences on Consumer Behaviour
 Culture
 Social Class
 Social groups
 Family
 Personal Influences
 Modeling & Researching Consumer Behaviour
 METHOD OF EVALUATION

 Continuous Evaluation : XX%

 Assignments : XX%
 Surprise Tests : XX%
 Presentation/Field Work : XX%
 Mid Term Examination : XX%
 End Term Examination : XX%
 CRITERIA OF EVALUATION

 Understanding the Concepts

 Ability to Think and Articulate
 Questioning the Criticizing the Ideas Generated
 Presentation of Facts and Original Ideas
 WHY IS IT CALLED CONSUER BEHAVIOUR AND
NOT CLIENT BEHAVIOUR OR CUSTOMER
BEHAVIOUR ?
 Consumer : Potential purchaser of Products or

services offered for sale

 Customer : Regular purchaser of Products or Services

from a Store/Company
SIGNIFICANCE OF STUDYING CONSUMER
BEHAVIOUR
 Significant role it plays in our life, we spend a lot of time in the market
place to buy products or think/evaluate future buying requirements
 Micro Perspective: Important to a firm to accomplish its objective
 5% reduction in customer defection increases profit margins between 25%
to 85% depending on the industry
 They stay longer with the company, cost less and buy more
 Create word of mouth promotion
 Offer ideas and suggestions
 Pay less attention to competition
 Macro Perspective
 It affects the growth and outlook of a country.
 Consumers have more options to choose from.
 Transformation of the market from Sellers’ Market to Buyers’ Markets.
 Customer expectations are increasing.
 SIGNIFICANCE OF STUDYING
CONSUMER BEHAVIOUR
 Is India an opportunity or is it still a backward country?
 Is there one India or is it India and Bharat?
 What is Rural India?
 Who is an Indian Consumer?
 Why do you think companies like LG, Samsung, Nokia and Honda
are reaping great results in India where as Coke, Pepsi, Amway and
GE still struggling?
 SIGNIFICANCE OF STUDYING
CONSUMER BEHAVIOUR
 India is the 8th largest Economy, has over 1.1 Billion people, 40%
population below 21 years but in per capita income ranks 145.
 There is no single India, there is Rich India, Educated India, Rural
India, Urban India, Urban & Rural Poor and Self Employed India etc.
 Rural India accounts for 50 % GDP and 70% population, almost
50% Rural India is not dependent on Agriculture. Rural India has the
demand for Motor cycles, Mobiles, CD etc. But is still dependent on
Monsoon.
 Indian Consumer is Value Conscious, she is not educated but still is
not backward.
 Income Ditsribution Urban India

100% 4.7
14.3 9.9
27.9 21.4
80% 28.1
31.7
60% 21.7
34.8 23.4
40% 23.6 16.3
20.3 15
20% 13.7
35.9
9.6 16.7 23.6
0% 7.3
1995-6 2001-2 2005-6 2009-10

Upper Upper Middle Middle Lower Middle Lower

 Income Distribution Rural India

100%
20.6
80% 32.5
42.7
57.2
60% 42.5
43.5
40% 39.5
29 23.3
20% 13.7
8.6 10.1 6.5
3.1 4.1 5 8.1
0% 2.1 3.6 5.2
1995-6 2001-2 2005-6 2009-10

Upper Upper Middle Middle Lower Middle Lower

 CONSUMER BEHAVIOUR
 Actual Visible Consumption
 Visible Consumption breeds more consumption
 Affordability growth greater than income growth
 Increased comfort with borrowing
 Rampant rise in aspiration
 Women in workforce
 Generational transition
 Self employment
 90% of rural households and 60% of Urban households are headed by a
self employed person.
 CONSUMER BEHAVIOUR
 Is Consumer Behaviour a Mental Process or a Physical Process ?

 Decision Process and the physical activities individual engage in, when
evaluating, using and disposing good or services.
 Customers are individuals who purchase/consume the products for
self/household and non business consumption.
 Focus of the course would revolve around the final customer.
 Though in Industrial buying the motives and influences are completely
different, focus in the course would be the final customer.
 INDIVIDUAL BUYER ROLES
 Initiator :
 Individual who determines that some need/want is not being met and
authorizes a purchase to rectify the situation
 Influencer :
 Intentional/Unintentional endorser of the idea, influencing the purchase
decision
 Buyer :
 Individual who actually makes the purchase
 User
 Individual who consumes or uses the product

 On whom should the marketers focus on End User or Buyer ?

 INDIVIDUAL BUYING BEHAVIOUR
 Complex Buying Behaviour
 Highly Involved purchase decisions
 Expensive, bought infrequently, risky
 Limited knowledge levels
 Awareness of various brands
 Dissonance Reducing Buying Behaviour
 Highly Involved purchase decisions
 Less expensive, bought infrequently, risky
 Buying on basis of price and convenience
 Habitual Buying Behaviour
 Low Involvement
 Low cost, bought frequently
 Variety Seeking Buying Behaviour
 Low Involvement
 Significant Brand Differential
 Seeking variety paramount than dissatisfaction
APPLICATION OF CONSUMER BEHAVIOUR
 Market Opportunity Analysis
 Examining trends and conditions for understanding the customers needs,
what are his unsatisfied needs, which needs can be profitably met
 Target market Selection
 Identification of distinct groups of customers who have unique needs and
aligning company objectives with customer segments
 Marketing Mix Determination
 Developing and implementing strategy for delivering an effective
combination of needs satisfying features to consumers within target
markets
 Product
 What size, shape, features should the products have ?
 How should it be packaged ?
 Which aspects of service are most important to consumers ?
 What type of accessories and associated products should be offered ?
 APPLICATION OF CONSUMER
BEHAVIOUR
 Price
 How price aware are consumers in the product category ?
 How sensitive are consumers to price difference among brands ?
 How large a price reduction is needed to encourage purchase ?
 Promotion
 What methods of promotion are best for specific situation ?
 What are the most effective means for gaining consumer’s attention ?
 What methods best convey the intended message ?
 How often the promo be repeated ?
 Place
 What type of retail outlet should sell the firm’s offerings ?
 Where should they be located, and how many should there be?
 What image and clientele should the retailers seek to cultivate ?
APPLICATION OF CONSUMER BEHAVIOUR
 Non Profit & Social Marketing
 To solicit public contribution for supporting the cause
 To encourage the concerned people to join their effort
 Government Decision Making
 Government Policies provide services to the public that result in the
decisions that affect the consumer behaviour
 Design legislations that protect / assist them in evaluation the products
/ services
 VARIABLE OF CONSUMER BEHAVIOUR

Stimulus Response
Variables Variables

Intervening
Variables

• Stimulus Variables generate sensory inputs and can be external like

advertisements or internal like hunger
• Response Variables are the resulting mental or physical reactions of the
individuals who are influenced by the stimulus variables
• Intervening variables enhance or mitigate the effect of stimulus variables on the
response variables
 MODEL OF CONSUMER BUYING
BEHAVIOUR

External Individual
Marketing Stimuli Other Stimuli Buyer’s Decision
Environment Determinants
Making Process
• Product • Economic • Problem Recognition
• Culture • Personality &
• Price • Technology • Information Search
• Subculture Self Concept
• Promotion • Political • Alternate Evaluation
• Social Class • Attitude
• Place • Cultural • Purchase Decision
• Social • Motivation &
• Situational • Post purchase
Group Involvement
• Personal Behaviour
• Family • Info Processing
Influences
• Learning &
Memory
 EXTERNAL VARIABLES
 Culture:
 The complex whole that includes knowledge, belief, customs and any other
capabilities and habits acquired by a person as a member of the society.
 Subculture:
 Segments that have values, customs, traditions and other ways of behaviour that
are unique and that distinguish them from others sharing the same cultural
heritage.
 Social Class:
 Process by which the people in the society rank one another into different social
positions
 Social Groups:
 Collection of people who have a sense of relatedness resulting from some
interaction with one another.
 Family:
 Special form of Social Group that is characterized by numerous and strong face to
face interactions among its members
 INDIVIDUAL DETERMINANTS

 Personality & Self-Concept:

 Distinguishing psychological characteristics that lead to relatively consistent and
enduring responses to environment.
 Motives & Involvement:
 It is a need that is sufficiently pressing to drive the person to act.
 Learning:
 Involves changes in an individual’s behaviour arising from experience.
 Attitude:
 Person’s enduring favuorable or unfavourable evaluations, emotional feelings and
action tendencies towards some objects or ideas.
 LEARNING OF THE SESSION

 Course Outline
 Method of Evaluation
 Criteria of Evaluation
 Significance of studying Consumer Behaviour
 Consumer Behaviour Introduction
 Individual Buying Roles
 Individual Buying Behaviour
 Applications of Consumer Behaviour
THANK YOU