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

1. Consumer
Behaviour

2. 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.

3. Why do we need
to study
Consumer
Behaviour?
Because no longer can we take the
customer/consumer for granted.

4. Failure rates of new products
introduced
 Out of 11000 new products introduced by 77 companies,
only 56% are present 5 years later.
 Only 8% of new product concepts offered by 112 leading
companies reached the market. Out of that 83% failed
to meet marketing objectives.

5. Customer & Consumer

6. What customer Buys ?

7. Nature of Consumer
Behaviour:

8. 1. Influenced by various factors:
The various factors that influence the consumer
behaviour are as follows:
a. Marketing factors such as product design, price,
promotion, packaging, positioning and distribution.
b. Personal factors such as age, gender, education and
income level.
c. Psychological factors such as buying motives,
perception of the product and attitudes towards the
product.
d. Situational factors such as physical surroundings at
the time of purchase, social surroundings and time
factor.
e. Social factors such as social status, reference groups
and family.
f. Cultural factors, such as religion, social class - caste
and sub -castes.

9. 2. Undergoes a constant
change:
 Consumer behaviour is not static. It undergoes a change
over a period of time depending on the nature of
products.
 For example, kids prefer colorful and fancy footwear,
but as they grow up as teenagers and young adults, they
prefer trendy footwear, and as middle-aged and senior
citizens they prefer more sober footwear.

10. 3. Varies from consumer to
consumer:
 All consumers do not behave in the same manner.
Different consumers behave differently. The differences
in consumer behaviour are due to individual factors
such as the nature of the consumers, lifestyle and
culture.
 For example, some consumers are technoholics. They go
on a shopping and spend beyond their means.

11. 4. Varies from region to
region and country to county:
The consumer behaviour varies across states, regions and
countries. For example, the behaviour of the urban
consumers is different from that of the rural consumers

12. Consumer Behaviour Roles
 Initiator :The person who determines that some need or
want is not being met.
 Influencer:The person who intentionally/unintentionally
influences the decision to buy the actual purchase
and/or use of product or service.
 Buyer: The person who actually makes the purchase.
 User: The person who actually uses or consumes the
product or service.

13. Five Interdisciplinary Dimensions of
Consumer Behaviour
1. Economic
Demand, Supply, Income, Purchasing Power
2. Psychology
Needs, Motivation, Personality, Perception, Attitudes, Learning
3. Sociology
Society, Social Class, Power, Esteem, Status
4. Socio Psychology
Group Behaviour, Group Influences, Conformity to group norms, Role Leader.
5. Cultural Anthropology
Beliefs, Values, Attitude towards wealth, Joint Family System, Caste System

14. Types of customers
 Loyalists
 Apostles
 Defectors
 Terrorists
 Hostages and
 Mercenaries
 Discount Customers
 Impulsive Customers
 Need Based Customers
 Wandering Customers
 Cost Oriented Customers
 Value Oriented Customers
 Technology Oriented Customers

15. Loyalists
A loyalist customer is one who is completely satisfied and
keeps returning to the company.

16. Apostles
 A loyalist customer is one who is completely satisfied
and keeps returning to the company. Individuals who
are so satisfied, whose experience so far exceeds their
expectations, that they share their strong feeling with
other.

17. Terrorists/Defectors
Those who are more than dissatisfied, quite dissatisfied
and neutral.

18. Mercenaries
 Another customer who can make a company’s life
unhappy is the mercenary.
 This type of customer may be completely satisfied but
show almost no loyalty.
 They hunt for low prices, impulsion buying, pursue
fashion trends or seek change for the sake of change.

19. Hostages
They don't feel any
attachment to particular
brands. They are usually
expensive to acquire
and difficult to keep.
Hostages are not
satisfied, but they keep
repurchasing from your
company.

20. Apostle model

21. Scope and Application of
Consumer Behaviour
1. Consumer behavior and marketing management: Effective
business managers realize the importance of marketing to the
success of their firm. A sound understanding of consumer
behavior is essential to the long-run success of any marketing
program.
2. Consumer behavior and non-profit and social marketing: In
today’s world even non-profit organizations like government
agencies, universities, and charitable institutions have to
market their services for ideas to the “target group of
consumers or institution.
3. Consumer behavior and government decision making: In
recent years the relevance of consumer behavior principles to
government decision making

22.  Consumer behavior 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.
 Consumer behavior and consumer education:
Consumer also stands to benefit directly from orderly
investigations of their own behavior. 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 a pre-planned
shopping list, consumers may be more willing to plan an
effort to save money.

23. Consumer behavior application
can be analysed through
1. POSITIVISM 2.
INTERPRETIVISM

24. 1.POSITIVISM
 In the initial stages, the main thrust of consumer behavior
was from the viewpoint of a marketing manager’s
perspective.
 They were interested to know the specific cause of
Consumer Behavior and use this information to work out
suitable marketing strategy to influence consumption.
 Since marketers were concerned with predicting consumer
behaviour this approach came to be known as POSITIVISM.

25. 2.INTERPRTIVISM
• Academicians from different disciplines were interested in
the study of consumer behavior simply to understand the
consumers better.
•The study of consumer behavior from the point of view of
understanding consumption behavior and the meanings
behind such behaviors came to be known as
INTERPRETIVISM.
BOTH APPROACHES ARE DIFFERENT BUT ARE
NEEDED FOR PREDICTING AND UNDERSTANDING
CONSUMER BEHAVIOUR.

27. Example of Positivism

28. Positivism

29. The Segmentation, Targeting
& Positioning (STP)

33. Basic example how to use STP by
mapping your competitors onto a
matrix

34. For example, as you can see in the gap
below, we've identified a possible
opportunity in the market for low-priced
family cars.

35. Bases for Market
Segmentation
 Geographic Segmentation
 Demographic Segmentation
 Psychographic Segmentation
 Behavioural Segmentation

36. Geographical segmentation
 Geographical segmentation is one of the oldest and
simplest methods of dividing the customer market on
the basis of the geographical location of the customers.
 For example, People living in rural and urban region of
the country have different purchasing or buying habits.
Therefore rural malls chain established by ITC in
Madhya Pradesh
Chaupal Sagar.
Services or product has to be designed keeping in mind the
different preferences of each customer group.

38. Demographic Segmentation
 Demographic segmentation is dividing the customer
market on the basis of several variables such as age,
gender, occupation, income, education, marital status,
family life cycle, community, social status, nationality
etc.
For example buying behavior of car, beauty products,
mobile phones, cards, apparels, are hugely influenced by
their demographics.

39. Psychographic Segmentation
 Psychographic Segmentation is dividing the customer
market on the basis personality, lifestyles, attitudes and
habits of an individual. It is mainly conducted on the
basis of “how” people think and “what” do they
aspire their life to be.
For example:
 A luxury mobile-manufacturing brand that specializes in
customization is a good example of psychographic
segmentation.
 These phones are not available to people of all social
classes. To be able to purchase an expensive mobile
device that is customized for each customer, a certain
standard of living and family income is required.

40. Example of Psychographic
Segmentation
 The organic food industry is one of the most rapidly
expanding industries that caters to a specific demographic.
This is another area where psychographic segmentation can
help. This example can also be applied to other markets.

41. Behavioral Segmentation
 Behavioral Segmentation is dividing the market on the
basis of the individual’s knowledge about the product
and the usage of the product. The customer can be
segmented into those who know about the product,
those who don’t know about the product, Ex users,
Potential users, Current Users First time users, etc.
For example, an athlete may prefer to buy running shoes
to participate in marathon race and a non-athlete person
may buy it just because he likes the shoes (light/medium
user).

44. Can Marketing be
standardised?
No.
Because cross - cultural styles, habits, tastes,
prevents such standardisation.

45. Unless
Managements act
The more successful a firm has been in the past, the
more likely is it to fail in the future.

46. Why?
Because people tend to repeat behaviour for which
they have been rewarded.

47. Language Problems
 “Please leave your values at the desk” -
Paris hotel
 “Drop your trousers here for best results” -
Bangkok laundry
 “The manager has personally passed all
water served here” - Acapulco restaurant
 “Because of the impropriety of entertaining
guests of the opposite sex in the bedroom,
it is suggested that the lobby be used for
the purpose.” - Zurich hotel
 Ladies are requested not to have children
in the bar.”- Norway bar

48. Buyer Behaviour
4Ps Marketing
Environment
Buyer
Characteristics
Buyer
Decision Process
Buyer
Decision
Consumer

49. Marketing Stimuli
Product Price Place Promotion
4 Ps

50. Other Stimuli
Economic Technological Political Cultural
Marketing
Environment

51. Buyer characteristics
 Cultural
 Social
 Personal
 Psychological

52. Buyer’s Decision Process
 Problem Recognition
 Information Search
 Evaluation of Alternatives
 Purchase Decision
 Consumption
 Postpurchase behaviour

53. Buyer’s Decision
 Product Choice
 Brand Choice
 Dealer Choice
 Purchase Timing
 Purchase Amount

54. Cultural factors
 Culture
 Sub - culture
 Social Class

55. Social factors
 Reference Groups
 Family
 Roles and Statuses

56. Personal Factors
 Family Life Cycle
 Occupation and Economic circumstances
 Lifestyle
 Personality and self - concept

57. Psychological Factors
 Motivation
 Perception
 Learning
 Beliefs and Attitudes

58. Buying Roles
 Initiator
 Influencer
 Decider
 Buyer
 User

59. Buying Behaviour
 Complex
 Dissonance - Reducing
 Habitual
 Variety seeking

60. Buying Process
 Problem Recognition
 Information Search
 Evaluation Alternatives
 Purchase Decision

61. Post - Purchase Behaviour
 Satisfaction
 Actions
 Use and Disposal