1.
INTRODUCTION
1. CONCEPT
Consumer Behaviour is one of the fundamentals of marketing. It is necessary to understand the
consumers before marketing any product to them.
The behaviour that consumers display in searching for, purchasing, using, evaluating, and disposing of
the products and services that they expect will satisfy their needs is called consumer behaviour.
The scope includes:
What they buy?
Why they buy?
When they buy?
Where they buy?
How often they buy?
How they use it?
How often they use it?
How they dispose it?
How they evaluate it after before and after purchase?
Etc.
2. TYPES OF CONSUMER ENTITY
There are 2 types of consumers:
i. Personal Consumers
Individuals who buy goods and services for his/her own use, for household use, for the use
of a family member, or for a friend.
ii. Organisational Consumers (Not in course)
Profit or non-profit organisations, government agencies and institutions, all of which must
buy goods and services on order to run their organisations.
Personal Consumers Organisational Consumers
Small quantity Large quantity
Higher price Lower price
More emotions Less emotions/ Rational choices
End users Need not to be end users
More diversified Concentrated in terms of location and deals
3. DEVELOPMENT OF MARKETING CONCEPT
i. Production Concept
It focuses on expansion of production in order to get the costs down. This provides the
consumers with the same product at a lower cost. This also provides more profit margins to
the organisation. E.g. Ford increased the production of Motel T in order to provide it
average Americans as well.
ii. Product Concept
It focuses on provision of the best optimised product that an organisation can provide its
consumers. This provides the consumers with a better product and the organisation gets an
upper hand in the market. E.g. AMD increased the quality of its semiconductors such that
they optimise with all kinds of OS and give the best multi-core performance a processor can
provide.
iii. Selling Concept
This assumes that consumers do not buy the product until and unless they are persuaded
aggressively. This helps the consumers to know about newer products, and gains more
revenue to the firm. E.g. Jio which now ranks 6th for the best marketing in the world.
iv. Marketing Concept
It assumes that organisations must understand the needs and wants of the consumers in
order to successfully fulfil their needs. This way organisations understand what their
customers want and customers get what they want. E.g. Apple didn’t focus on
understanding what consumers wanted, while Microsoft provide DOS separately from the
hardware so that DOS can be installed on any hardware.
4. DRIVERS OF SUCCESSFUL RELATIONSHIP
The four stages as below:
i. Customer Value
The value between the benefit of the commodity and resources used to obtain them.
Perceived customer value is relative and subjective.
ii. Customer Satisfaction
The perception of the customer towards the performance of the commodity with respect to
his/her expectations.
iii. Trust
Satisfaction lays the foundation for trust, which is the foundation for retention of customers.
iv. Retention
Trust brings loyal customers. Customers ignore the negatives of the products. Loyal
customers are key because:
a. They buy more products, thus creating an ecosystem.
b. They are less price sensitive.
c. They spread positive word of mouth.
d. Servicing them is cheaper, due to pre-existing knowledge and non-priority experiences.
e.g. Apple has loyal customers due to its simplicity and marketing. There customers tend to
buy other products of the same brands due to loyalty and restricted ecosystem.
5. FEATURES OF CONSUMER BEHAVIOUR
i. Multi-disciplinary
ii. Dynamic
iii. Art as well science
iv. Broad scope in marketing (More than buying)
v. Study based on experiences
vi. Involves interaction
vii. Decision making
6. APPLICATION OF CONSUMER BEHAVIOUR
i. Helps in creation of marketing strategy (
Don’t sell the product, sell the use or the value
ii. Regulatory Policy
iii. Social marketing
iv. Informed individuals (e.g. Dunkin Donuts in Seoul)
v. Demarketing (e.g. Yamaraj ad)
7. CONSUMER DECISION MAKING PROCESS
There are three stages:
i. Input
ii. Process
iii. Output
8. NEEDS
The basis of marketing generates from consumer needs:
i. Innate/Biogeneric Need: Individuals are born with these needs.
ii. Acquired Need: Which are not innate.
9. GOALS
Goals are selected on the basis of:
i. Personal experiences
ii. Personal capacity
iii. Prevailing norms and values
iv. Goals’ accessibility
Goals can be substituted when the primary goal is not achieved. The substitute goal disperse the mental
tension.
Needs and goals are interdependent in multiple ways. Needs are realised only in accordance to
achievement of goals. Goals are sometimes set in order to repay for needs.
10. MOTIVE
A motive corresponds to a want or a preference that is sufficiently strong that it moves the person to
action or deliberate inaction.
There can be positive and negative motivation. Positive motivation is when one goes towards the object,
whereas negative motivation is when one goes away from object. E.g. Toothpaste ad saying that teeth
will get stronger is positive motivation, and ad saying that it will avoid bad smell is negative motivation.
Motives can be rational or emotional. Rational motives consider real characteristics, whereas emotional
motives consider personal subjections. E.g. Car bought in order to cover distance is rational motive,
whereas car bought in order to join the car club or to show off.
10.1 Dynamicity of Motivation
Motivation is dynamic in nature as there are multiple needs which have to be fulfilled.
Moreover, needs tend to change over time and other dimensions.
11. FRUSTATION
Frustration is a common result when one doesn’t achieve the goal. The reactions of this frustration are:
i. Aggression: Getting angry.
ii. Rationalisation: Finding reasons.
iii. Regression: Acting in childish manner.
iv. Withdrawal: Withdrawing from situation.
v. Projection: Blaming others for own mistakes or shortcomings.
vi. Daydreaming: Getting an escape by going somewhere in mind.
vii. Identification: Identifying people in the similar situation.
viii. Repression: Repressing the fact that there ever was such a goal or need.
ix. Justification: Explaining the reasons.
12. PERSONALITY
The personality can be based on these four factors:
i. Extraversion v/s Introversion (Where do you get your energy?)
ii. Sense v/s Intuition (How do you get your information?)
iii. Think v/s Feel (How do you make decisions?)
iv. Judgement v/s Perception (How do you organise your world?)
Personality has three facets. Personality reflects individual differences. It is generally consistent,
however it can change.
12.1 Theories of Personality
i. Freudian Theory/ Psychoanalytic Theory
Unconscious needs and drives are the at the heart of motivation or personality.
The theory suggests that human personality consists of 3 interacting systems:
- Id: Primitive needs which need immediate satisfaction.
- Superego: Internal expression of society’s moral and ethical codes of conduct.
- Ego: Conscious control which balances id and superego.
ii. Neo-Freudian Theory
Social relationships are fundamental to the formation and development of
personality.
iii. Trait theory
Qualitative approach to personality as a set of psychological traits.