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UNIT-1 (KMBNMK01)
 Consumer Behaviour & Marketing Communication
UNIT-1 Topics

Introduction: Consumer Behavior & the Marketing Mix, Consumer Goals, Consumer Decision Making Process:
Need Recognition, Search for information, Pre purchase evaluation of alternatives, Purchase, Consumption,
Post consumption Evaluation & Divestment, Interrupts in buying process & their effects, Customer
involvement, Consumer Journey through the World of Technology

CONCEPT

Consumer behaviour is the study of individuals, groups, or organizations and the processes they use to
select, secure, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts
that these processes have on the consumer and society. It blends elements from

 Psychology,
 Sociology,
 Social anthropology and
 Economics.
It attempts to understand the decision-making processes of buyers, both individually and in groups. It
studies characteristics of individual consumers such as demographics and behavioural variables in an
attempt to understand people's wants. It also tries to assess influences on the consumer from groups
such as family, friends, reference groups, and society in general.

DEFINITION

“The term consumer behaviour is defined as the behaviour that consumer display in searching
for, purchasing using, evaluating and disposing of products and services that they expect will
satisfy their needs.”

(Schiffman & Kanuk)

Consumer behaviour focuses on how individuals make decisions to spend their available resources

 Time,
 Money,
 Effort on consumption-related items that includes:

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 what they buy,

 why they buy,
 when they buy it,
 where they buy it,
 how often they buy it,
 how often they use it,
 how they evaluate it after the purchase and
 the impact of such evaluations on future purchases,
 And how they dispose of it.
CONSUMER BEHAVIOUR MODEL

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 KINDS OF CONSUMPTION ENTITIES:

Personal Organizational
Consumer Consumer

 Personal Consumer Buys goods and services for his or her own use, for the use of the household
or as a gift for a friend. The products are bought for final use by individuals, who are referred to as
end users or ultimate consumers.

 Organizational Consumer Includes profit and non-profit businesses, government agencies

(local, state, national) and institutional (e.g. schools, hospitals, and prisons), all of which buy
products, equipment, and services in order to run their organizations.

 Customer vs. Consumer

The terms "consumer" and "customer" are often used interchangeably, but a consumer and customer
are not always the same entity. In essence, consumers use products while customers buy them. A
consumer may also be a customer and a customer can also be a consumer.

CUSTOMER

Customer is the term shows that individual who actually makes a decision in selecting a certain
product. Person may or may not directly consume the product. But the person takes a decision of
buying. For example if a housewife buys vegetables or anything for her household then she will be
considered as customer whereas the entire family is considered as consumer.

CONSUMER

Consumer is the term which has many aspects. But in business field we use this term as, individuals
who gains direct utility of the product.

 MARKETING CONCEPT
The field of consumer behaviour is rooted in the marketing concept, a business orientation that evolved
in the 1950s through several alternative approaches toward doing business referred to respectively: -

1) The Production Concept.

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2) The Product Concept.

3) The Selling Concept.

4) The Marketing Concept.

5) The Societal Marketing Concept.

1) THE PRODUCTION CONCEPT:

 The production concept assumes that consumers are mostly interested in product availability
at low prices; its implicit marketing objectives are cheap, efficient product and intensive
distribution.
 Consumers are more interested in buying what’s available rather than wait for what they really
want.
 The main objective is to expand the market.

2) THE PRODUCT CONCEPT:

 The product concept assumes that consumers will buy the product that offers them the highest
quality, the best performance, and the most features.
 It ensures the company to improve the quality of its product and add new features.
 The product concept often leads to “marketing myopia” that is focusing on the product rather
than the customer needs.

3) THE SELLING CONCEPT:

 The assumption of the selling concept is that consumers are unlikely to buy the product unless
they are aggressively persuaded to do so – mostly through “hard sell” approach.
 The problem in this concept is that it fails to satisfy a customer.
 Promotion can be done through advertisement, sales promotion and public relation.
 Today the selling concept is utilize be marketers of unsought products – that is which people
are not willing to buy it (such as life insurance).

4) THE MARKETING CONCEPT:

 It started in 1950’s when some marketers realized we can sell more products by determining
what consumer would buy.
 Consumer need and wants became the firm’s primary focus.
 The marketers should made product what t can sell, instead of what it has made.

STARTING POINT FOCUS MEANS ENDS:

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SELLING CONCEPT

Factory Product Selling & Promotion Profit through sale volume

MARKETING CONCEPT

Market Needs Marketing Profit via customer satisfaction

5) THE SOCIETAL MARKETING CONCEPT:

 Developing that product which benefits the society. Doing marketing in such a way that it helps
you in increasing your production & also giving benefits to society.
 The organization should determine the needs, wants and interest of target markets and deliver
the desired satisfaction more effectively and efficiently then do competitors in a way that
maintains or improves the customers and society’s well being.

 Importance of Consumer Behaviour

It is essential for marketers to understand consumers to survive and succeed in this competitive
marketing environment. The following reasons highlight the importance of studying consumer
behaviour as a discipline.

 Importance in day to day life

The purpose of studying a discipline is to help oneself to better appreciate its contributions. The reason
to study consumer behaviour is because of the role it plays in the lives of humans. Most of the free
time is spent in the market place, shopping or engaging in other activities. The extra time is usually
passed in knowing and thinking about products and services, discussing with friends about them, and
watching advertisements related to them. The usage of them significantly reveals our life styles. All
these reasons suggest the need for study. However, the purpose may be to attend immediate and
tangible reasons.

 Pertinence to decision -making

Important for Decision-Making

Micro Macro
Perspective Perspective

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Consumers are often studied because certain decisions are significantly affected by their behavior or
expected actions. For this reason, consumer behavior is said to be an applied discipline. Such
applications can exist at two different levels of analysis.

The micro perspective seeks application of this knowledge to problems faced by the individual firm or
organization. The societal perspective applies knowledge of consumers to aggregate level problems
faced by large groups or by society as a whole.

(a) Micro Perspective:

The micro perspective involves understanding consumers for the purpose of helping a firm or
organization accomplish its objectives. Advertising managers, product designer, and many others in
profit oriented businesses are interested in understanding consumers in order to be more effective at
their tasks. In addition, managers of various nonprofits organizations have benefited from the same
knowledge. For example, the United Way and the American Red Cross have been effective in applying
an understanding of consumer behaviour concepts to their activities.

(b) Macro Perspective

On the macro, or aggregate, consumers collectively

influence economic and social conditions within an entire society. In market systems based on
individual choice, consumers strongly influence what will be produced, for whom it will be produced,
and what resources will be used to produce it.

Consequently, the collective behaviour of consumers has a significant influence on the quality and
level of our standard of living. Overall impact of consumers’ strong desire for private automobile
transportation.

Vast amounts of resources have been used to produce cars, highway systems, and petroleum products
used in their operation. It has also strongly influenced where many of us live (for example, suburbs)
and how we run our daily lives (for example what we eat, where we shop, and how are entertained).

Furthermore, this collective desire not only has led to the development of a string transportation
network but also has significantly contributed to our pollution problems, energy needs and
international relations.

As this illustrates, understanding consumer behaviour from a macro perspective can provide insight
into aggregate economic and social trends and can perhaps even predict such trends. In addition, this
understanding may suggest ways to increase the efficiency of the market system and improve the
wellbeing of people in society.

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 Consumer Behaviour and Marketing Mix

Consumer behavior and the marketing mix are deeply interconnected, as understanding
consumer behavior is crucial for developing an effective marketing strategy. The marketing
mix, often referred to as the 7Ps (Product, Price, Place, Promotion, People, Process, Physical
Evidence), represents a set of tactical marketing tools that a company uses to bring a product
or service to the market.

Product:

Consumer behavior analysis helps in identifying what consumers want, need, and desire in a
product. It provides insights into product features, design, quality, packaging, and branding
that will attract and satisfy consumers.

Understanding consumer preferences, buying patterns, and usage behaviors aids in product
development, ensuring that the product or service matches the target market's needs and
expectations.

Price:

Consumer behavior analysis helps in determining the price consumers are willing to pay for a
product. Factors such as perceived value, price sensitivity, and price thresholds are crucial in
setting the right pricing strategy.

Consumer behavior insights help in understanding how price changes or discounts might
influence consumer purchasing decisions and overall buying behavior.

Place (Distribution):

Knowledge of consumer behavior guides decisions on where and how to distribute products to
reach the target market effectively. It helps in selecting the appropriate distribution channels
based on consumer preferences and purchasing habits.

Understanding consumer behavior aids in determining the right locations and distribution
methods, ensuring that the product is available where and when consumers want to buy it.

Promotion:

Consumer behavior analysis helps in crafting marketing communication strategies that

resonate with the target audience. Understanding consumer preferences, media habits, and
influences assists in creating more effective promotional campaigns.

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Insights into consumer behavior aid in selecting the most appropriate channels (online, social
media, traditional advertising) and messaging to capture consumers' attention and drive desired
actions.

People:

Specifically focuses on the employees and personnel who directly or indirectly interact with
customers. This element underscores the importance of the workforce in delivering exceptional
service and shaping the overall customer experience.

Consumer behavior influences the training and behavior of people representing the brand, such
as employees or sales staff. Understanding consumer expectations and behaviors helps in
training and empowering staff to better meet customer needs and provide a positive customer
experience.

Process:

This includes the series of steps or actions taken to deliver a service. For instance, in a
restaurant, the process might involve how the customers are greeted, seated, served, and billed.
For an online service, it could involve the steps from signing up to utilizing the service.

Consumer behavior analysis informs the design of processes and systems that enhance the
overall customer experience. Understanding how consumers prefer to interact, purchase, and
engage with the company helps in creating streamlined and consumer-friendly processes.

Physical Evidence:

Understanding consumer behavior aids in designing the physical environment or tangible

elements associated with a service. It helps in creating an appealing and trustworthy
atmosphere that aligns with consumer expectations. The physical evidence includes the
ambiance, layout, design, and overall atmosphere of the service environment. For example, it
could be the interior design, layout, and decor of a restaurant, hotel, or retail store. The visual
aesthetics, such as colors, lighting, and design elements, play a role in creating a favorable
impression on customers.

By incorporating consumer behavior insights into each of the 7Ps, businesses can create more
comprehensive and consumer-focused marketing strategies. This consumer-centric approach
enhances the overall customer experience, satisfaction, and loyalty, thereby increasing the
effectiveness of marketing initiatives and the success of products or services in the market.

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 Consumer Goals

Consumer goals refer to the specific aims, objectives, or motivations that drive an
individual's behavior and decisions as they engage in the process of purchasing goods or
services. These goals reflect the desires, needs, preferences, and motivations that
consumers seek to fulfill through their purchasing actions.

Consumer goals can be broadly categorized into three main types: hedonic, utilitarian, and
normative. These categories represent different motivations or objectives that drive consumer
behavior and the reasons behind their purchases.

1. Hedonic Goals

2. Utilitarian/Functional Goals

3. Normative Goals

1. Hedonic Goals:

Hedonic goals are pleasure-oriented and focus on emotional or experiential satisfaction.

Consumers pursuing hedonic goals seek products or experiences that bring them joy,
excitement, sensory pleasure, or emotional fulfillment. Hedonic consumers are driven by
emotions, seeking enjoyment, pleasure, and sensory experiences. They might be willing to pay
more for products or experiences that provide emotional or sensory gratification

Examples: Luxury items, entertainment products, fine dining experiences, travel for leisure,
fashion items, and experiential purchases like spa treatments or leisure activities typically
fulfill hedonic goals.

2. Utilitarian Goals:

Utilitarian goals are practical and functional in nature, focusing on meeting specific needs or
solving problems. Consumers pursuing utilitarian goals seek products or services that fulfil a
specific purpose or provide functional benefits. Utilitarian consumers are driven by practical
considerations and seek products or services based on their functionality, utility, and problem-
solving attributes.

Examples: Basic household items, everyday groceries, office supplies, and necessary tools or
equipment fall under utilitarian purchases. These are essential for everyday life and serve a
functional purpose.

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3. Normative Goals:

Normative goals revolve around social or ethical considerations, aligning with personal values,
beliefs, or societal norms. Consumers pursuing normative goals seek products or brands that
resonate with their values and support social causes or ethical considerations. Normative
consumers prioritize brands or products that align with their personal beliefs, values, or social
concerns. They might be willing to pay more or make sacrifices in features or convenience for
products that support their ethical or social concerns.

Examples: Environmentally friendly products, fair-trade items, cruelty-free cosmetics, and

products supporting social causes are typical purchases that align with normative goals.

Consumers often have a mix of these goals, and their purchasing decisions might be influenced
by a combination of these motivations. Understanding these consumer goals helps businesses
tailor their marketing strategies and product offerings to align with the diverse needs and
motivations of their target audience.

 Interrupts in Buying
"Interrupts" are events or influences that disrupt or alter a consumer's typical buying process. These
interrupts can affecting the consumer's decision-making process and altering their initial intentions
regarding a purchase. These can occur at different stages of the buying process and can have a
significant impact on consumer behavior.

1) Positive Interrupts:

Positive Reviews or Recommendations: Encountering positive reviews, recommendations, or

endorsements from trusted sources can interrupt the consumer's decision-making process in a positive
way. This might reinforce their confidence in a product or service, nudging them towards making the
purchase.

Limited-Time Offers or Discounts: Positive interrupts can occur when consumers come across
limited-time offers, discounts, or special deals. These promotions can create a sense of urgency,
prompting consumers to make a purchase they were considering.

Exceptional Customer Service: Outstanding customer service experiences can positively interrupt
the buying process. A responsive, helpful, and friendly interaction with a company's support team
might encourage a hesitant consumer to proceed with their purchase.

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Ease of Use or Convenience: Encountering a product or service that offers exceptional ease of use,
convenience, or a seamless buying experience can positively interrupt the consumer's journey. This
might lead to quicker decision-making.

Influencer Endorsements: When a respected influencer or public figure endorses a product or service,
it can positively interrupt the consumer's decision-making process. Consumers might be influenced by
the endorsement and feel more confident about their purchase.

Free Trials or Samples: Offering free trials or samples can be a positive interrupt. It allows consumers
to experience the product or service before committing, often leading to increased trust and a higher
likelihood of purchase.

2) Negative Interrupts:

Negative Reviews or Bad Publicity: Negative interrupts can happen when consumers encounter
negative reviews, bad publicity, or scandals associated with a product or brand. This can significantly
discourage them from making the intended purchase.

Technical Issues or Poor User Experience: Encountering technical issues, a complicated purchasing
process, or a poor user experience can negatively interrupt the buying process. This can lead to
frustration and abandonment of the purchase.

Unexpected Costs or Fees: Hidden costs, unexpected fees, or unclear pricing information can
negatively interrupt the buying process, causing the consumer to rethink or abandon their purchase.

Lack of Availability or Stockouts: If a product is out of stock or unavailable, it can negatively

interrupt the consumer's purchase journey, potentially leading to frustration and a lost sale.

Unresponsive Customer Support: Poor or unresponsive customer service can be a negative interrupt.
When consumers face difficulties reaching out to customer support or have unsatisfactory interactions,
it can discourage them from completing their purchase.

Unsolicited Interruptions or Intrusive Marketing: Invasive or unsolicited marketing, such as

constant pop-ups, aggressive telemarketing, or spam emails, can negatively interrupt the consumer's
buying process. It might create annoyance and deter the consumer from making a purchase.

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 Consumer Decision Making Process

The consumer decision-making process refers to the series of steps or stages that an individual goes
through before, during, and after making a purchase. Understanding this process is crucial for
businesses to develop effective marketing strategies and cater to consumer needs at each stage. The
typical consumer decision-making process involves the following stages:

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1. Recognition of Need or Problem:

The process begins with the recognition of a need or a problem. This need can be triggered by
internal stimuli (such as hunger, thirst, or personal aspirations) or external stimuli (like
advertisements, recommendations, or social influences).

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2. Information Search:
Once the need is identified, the consumer searches for information to address it. This might
involve seeking information from various sources such as online research, reviews, opinions
of friends or family, or in-store visits to gather information about potential solutions.

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3. Evaluation of Alternatives:
Consumers assess the available options based on the information gathered during the search
phase. They compare different products or brands, considering factors such as price, quality,
features, and other attributes to make a decision.

4. Purchase Decision:
After evaluating the available alternatives, the consumer makes the purchase decision. The
chosen product or service is bought, and the decision can be influenced by various factors like
price, brand loyalty, or the perceived value of the product.

5. Post-Purchase Evaluation:
Following the purchase, the consumer evaluates their decision. They assess whether the
product or service met their expectations. Satisfaction or dissatisfaction with the purchase can

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influence future buying decisions and the likelihood of brand loyalty or word-of-mouth
recommendations.

An example of the consumer decision-making process for buying a new

smartphone:

Recognition of Need or Problem:

A consumer, realizes that her current smartphone is outdated and lacks the latest features. She
notices that her phone's battery life is declining, and she needs a better camera for her
photography hobby.

Information Search:

She begins her information search. She reads online reviews, watches tech review videos, and
asks for recommendations from friends who own the latest smartphones. She visits electronic
stores to explore different models and their features, camera quality, battery life, and prices.

Evaluation of Alternatives:

After gathering information, she shortlists a few options based on her preferences. She
considers brands like Apple, Samsung, and Google, comparing models like the iPhone,
Samsung Galaxy, and Google Pixel based on camera quality, battery life, and price.

Purchase Decision:

She decides to purchase the latest iPhone model due to its superior camera quality and seamless
integration with her other Apple devices. She chooses a specific model and makes the purchase
online, considering the convenience of the purchase process and the brand's reliability.

Post-Purchase Evaluation:

After using the iPhone for a few weeks, she evaluates her decision. She's pleased with the
camera quality and the overall performance, confirming that it meets her initial expectations.
She's satisfied with her choice and plans to remain loyal to the brand for future purchases.

 Consumer Journey through the World of Technology

Technology has not only expanded the range of products and services available to consumers
but has also greatly impacted the way they discover, purchase, and engage with brands. The
relationship between consumers and technology continues to evolve, influencing the way
individuals interact with businesses and make purchasing decisions.

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Technology has significantly transformed consumerism in numerous ways:

Access to Information: The internet and digital tools have empowered consumers with easy
access to vast amounts of information. This allows them to research products, compare prices,
read reviews, and make more informed purchasing decisions.

E-commerce: Online shopping has revolutionized consumerism by providing the convenience

of purchasing products from anywhere at any time. E-commerce platforms have expanded the
market reach for businesses and enhanced the shopping experience for consumers.

Rise of Reviews and Ratings: Online platforms and social media allow consumers to leave
reviews and ratings for products and services. This user-generated content significantly
influences the purchasing decisions of other consumers.

Personalization and Targeted Marketing: Advanced data analytics and AI algorithms enable
businesses to gather and analyze consumer data, allowing for personalized marketing and
product recommendations. This tailors the consumer experience and increases the likelihood
of making a sale.

Social Media and Influencer Culture: Social media platforms have become influential in
shaping consumer behavior. Influencers and peer recommendations on platforms like
Instagram, YouTube, and TikTok can significantly impact consumer choices.

On-Demand Services: Technology has given rise to the on-demand economy, offering
services like food delivery, transportation, and streaming on a pay-as-you-go basis, providing
consumers with instant gratification.

Mobile Technology: Smartphones and mobile apps have transformed how consumers interact
with businesses. Mobile payment systems, loyalty programs, and mobile-based services have
made transactions more efficient and convenient.

Augmented Reality (AR) and Virtual Reality (VR): These technologies have enhanced the
shopping experience by allowing consumers to visualize products, try them virtually, and
experience immersive shopping before making a purchase.

Voice Assistants and Smart Devices: Integration of voice-activated assistants like Siri,
Alexa, and Google Assistant, as well as smart devices, has changed the way consumers interact
with technology, allowing for seamless integration into daily life.

AI-Powered Chatbots and Customer Service: AI-driven chatbots provide instant,

personalized customer service, enhancing the consumer experience and resolving queries or
issues promptly, thereby improving customer satisfaction.

Dr. Pallavi Chaturvedi, Associate Professor, DMS, GLBITM