2025-26 EDITION

T.Y. [Link] (SEM – V) – CONSUMER BEHAVIOUR UNIT – I AND II

CONSUMER BEHAVIOUR

UNIT - 1
AN INTRODUCTION TO CONSUMER BEHAVIOUR
 Meaning and Definition
It is an old saying that customer is the 'king' because he is the person on whose
decision demand of any product or service is dependent.
The attitude of the consumer or buyer decides how demand will emerge for a new
product or service and how existing goods and services will be sold.
The attitude in turn depends upon many economic, social, cultural and
climatic factors.
The decisions are also influenced by education, stage of economic
development, lifestyle, information, size of family and many other factors.
The study of consumer behaviour implies how and why a particular consumer or
group reacts to the decisions of producers.
 Definition of Consumer Behaviour
 "Consumer behaviour is those actions directly involved in obtaining,
consuming, and disposing of products and services, including the decision
processes that precede and follow these actions."
 "Consumer behaviour is the behaviour that consumers display in scanning for
purchasing, using, evaluating and disposing of products and services that they
expect will satisfy their needs."
Thus, the study of consumer behaviour is the study of how individuals make
decisions to spend their available resources (time, money, effort) on
consumption-related items.
It includes the study of:

CONSUMER BEHAVIOUR 1
 Who buys products or services?
 How do they buy products or services?
 Where do they buy them?
 How often do they buy them?
 When do they buy them?
 How often do they use them?
The decision-making process involves several roles: user, decider, influencer,
buyer.
Consumers make purchase decisions based on limited information; hence, it is
important to know what and how much information is required by customers to
evaluate offerings.
Final Definition:
Consumer behaviour is the behaviour displayed by consumers in searching for,
purchasing, using, evaluating, and disposing of products and services that they
expect will satisfy their needs.
Examples
 FMCG products like soap, shampoo, or coffee are bought frequently for self
or family.
 These products are used in personal spaces (bathroom, kitchen, home) and
often provide joy and satisfaction.
 Example: Nescafe 3-in-1 advertisement is based on the truth that coffee
uplifts mood and restores balance in life.
Thus, consumer behaviour applies to all consumption decisions, from FMCG to
capital goods, and includes the influence of consultants, advisers and
external factors.
Why Study Consumer Behaviour?
The consumer or buyer decides what to buy, when to buy, and what not to
buy.
In a competitive environment, a product cannot be thrust upon consumers;
instead, producers must adapt to consumer demand.
 Importance of studying consumer behaviour:
 To identify what products can be sold and which may be rejected.
 To understand consumer motivation for buying or not buying.
 To find ways to push sales of existing products.
 To identify changes required in existing products.
 To gain a larger market share.
 Before launching a new product, study whether it will succeed or fail.
 To make informed investment decisions.
 To influence consumer behaviour through advertisements, incentives,
promotions.
Thus, consumer behaviour helps marketing personnel in understanding and
influencing purchase decisions at individual, group, and regional levels.

CONSUMER BEHAVIOUR 2

 Factors Influencing Consumer Behaviour - Detailed Notes
The behaviour of a consumer is dependent on a number of **economic** and
**non-economic** factors such as income, price, psychology, sociology,
anthropology, culture, and climate. Therefore, the study of consumer behaviour
overlaps with many sciences and is studied through research. Marketers believe
behaviour can be influenced, which is proven by the success of sales promotion
campaigns. However, disputes arise on whether consumers should be influenced
and what methods are ethical. For example, false claims in advertisements
(fairness creams, baldness cures) mislead consumers. To safeguard interests, laws
such as the **Consumer Protection Act** exist in India. Marketers largely agree it
is legitimate to influence consumer behaviour, though objectionable methods
(e.g., excessive use of sex appeal) are debated.
Main Factors Influencing Consumer Behaviour
I. Economic Factors
 Price
 Income
 Distribution of Income
 Competition with substitutes
 Utility
 Consumer preferences

II. Cultural Factors

Culture, subculture, and social class play an important role in shaping
consumer behaviour.
 Culture is the fundamental determinant of a person's wants and behaviour.
 Children acquire values, perceptions, preferences, and behaviours from
family and key institutions.
 Subcultures (nationalities, religions, racial groups, geographic regions)
provide specific identification.
 Multicultural marketing recognizes that ethnic and demographic groups may
not respond to mass advertising.
Example: Many banks and insurance companies target Hispanic Americans, as
their incomes rise but financial service consumption remains low.

III. Social Factors

Human societies show social stratification, often in the form of social classes.
Social classes differ in dress, speech, preferences, media habits, and status
symbols.
Advertising must resonate with the values and language of the targeted class.
Reference Groups
 Membership groups: family, friends, co-workers (primary: frequent and
informal; secondary: religious, professional).
 Aspirational groups: those a person wishes to join.
 Dissociative groups: those a person rejects.

CONSUMER BEHAVIOUR 3
Reference groups influence:
 Attitudes and self-concept.
 Conformity pressures.
 Product and brand choices.
Opinion leaders within groups play a strong role in spreading product-related
advice.
Marketers target them by identifying traits, media usage, and designing
campaigns.

**Examples:**
 Nestlé KitKat Kubes: Created buzz by engaging opinion leaders aged 16–
25.
 Hot Topic: Fashion retailer using music-based subcultures and customer
feedback for youth trends.
Family
The family is the most important buying organization.
 Family of orientation: parents and siblings influence values, religion,
politics, ambitions.
 Family of procreation: spouse and children directly affect buying decisions.

Shifts in family structure (rise of single adults, diverse households) influence

markets.
 Women's growing purchasing power has reshaped markets for finance,
technology, and consumer goods.
 Children exert direct influence (requests) and indirect influence (parents
anticipating needs).
 Marketers target children via TV, internet, and tie-ins (e.g., Nickelodeon,
Disney, Scooby Doo products).
Roles and Statuses
A person holds many roles in life, each with an associated status.
Products often reflect or communicate these roles and status levels (e.g., luxury
cars, suits).
Marketers must consider the status-symbol potential of products and brands.
IV. Personal Factors
Consumer decisions are also shaped by personal characteristics:
 Age and stage in the life cycle
 Occupation and economic circumstances
 Personality and self-concept
 Lifestyle and values
Age and Stage in the Life Cycle
Tastes in food, clothes, recreation, etc., change with age and life cycle.

CONSUMER BEHAVIOUR 4
 Household composition and psychological stages influence needs.
 Major life events (marriage, illness, relocation) create new consumption
needs.
Occupation and Economic Circumstances
Occupation shapes buying:
 Blue-collar: work clothes, tools.
 Executives: suits, air travel, memberships.

Economic factors: income level, stability, assets, debts, borrowing power.

 Luxury goods are sensitive to downturns.
 Companies may reposition or reprice products during recessions.

Personality and Self-Concept

Personality = consistent psychological traits (confidence, dominance, sociability,
etc.) influencing buying.
Brand personality = human traits attributed to a brand.

Jennifer Aaker's five traits:

1. Sincerity (honest, wholesome)
2. Excitement (spirited, up-to-date)
3. Competence (reliable, intelligent)
4. Sophistication (charming, upper-class)
5. Ruggedness (outdoorsy, tough)
Consumers prefer brands aligning with their self-concept (actual, ideal, or social
image).
Lifestyle and Values
Lifestyle = a person‘s pattern of living (activities, interests, opinions).

Example – LOHAS (Lifestyles of Health and Sustainability):

 Concern for environment, sustainable production, personal growth.
 Includes organic food, solar panels, yoga, eco-tourism.
 Market worth $230 billion (2000).

Lifestyles differ by money constraints (value-seeking, e.g., Wal-Mart) and time

constraints (multitasking consumers).
 Time-constrained consumers prefer convenience (bagels, fast-cooking
products).
 Wireless technology and ―convenience involvement‖ products target them.

CONSUMER BEHAVIOUR 5

 Advantages of Study of Consumer Behaviour - Detailed Notes
The science of consumer behaviour is widely used by marketers to test whether a
product will be accepted or rejected by consumers.
The high failure rate of products after World War II forced producers and
marketers to undertake consumer studies and market tests.
The following are the main advantages of studying consumer behaviour:
1. Saves From Disaster
The failure rate of new products is high worldwide, including India.
Examples:
Roohafza (Hamdard) succeeded, but Dabur‘s Sharbat failed due to poor taste.
Maggi became a household name, but competitors failed and some became sick
units.
Conclusion: Market testing before product launch can avoid or minimise
disasters.
2. Helps in Formulating Right Marketing Strategy
By studying factors influencing demand, companies can design effective
strategies.
Examples:
Nirma succeeded initially due to its low price, challenging Surf (Hindustan Lever).
In food items, taste decides consumer choice.
A small Sikanji seller in Modinagar grew into a regional brand and franchised.
Conclusion: Understanding consumer behaviour helps frame winning strategies.
3. Helps in Sales Promotion
Correct knowledge of buying factors helps push sales.
Examples:
Buy-back schemes: LML scooters, Akai TVs, Bajaj Auto, diesel generators,
refrigerators, pressure cookers.
Small packs: Shampoo sachets, washing powders, pan masala. Even low-income
groups tried costly products in small packs, later becoming loyal customers.
Conclusion: Behaviour study enables designing impactful sales promotion
schemes.
4. Helps in Market Segmentation
Consumer behaviour shows buyers are influenced by more than price or utility.
High-income groups buy costly items (luxury cloth, cars) for prestige/show.
Producers serve multiple segments by offering product varieties (soaps, creams,
toothpaste).
Conclusion: Segmentation based on consumer behaviour allows targeted profits.

CONSUMER BEHAVIOUR 6

5. Helps in Development of New Products
Study of consumer tastes helps avoid product failure.
Examples:
Food items, fashion goods, cosmetics, cigarettes, flavours rely on consumer
behaviour.
Coca-Cola reintroduced in India (1990s) struggled as consumers had shifted to
Thums Up.
Lifebuoy launched new variants (Gold, Plus) to cater to diverse needs.
Conclusion: Consumer behaviour guides successful product innovation.
6. Helps in Product Orientation
Helps identify why consumers drift away or dislike a product.
Examples:
Neem toothpaste failed despite long availability.
Surf Ultra, Ariel campaigns involved cloth producers (Bombay Dyeing, Reliance)
to prove claims.
Conclusion: Scientific orientation based on behaviour study revives or sustains
products.
7. Helps in Reorientation of Packaging
Packaging plays a crucial role in sales.
Consumers prefer utility packaging (e.g., Vanaspati, milk, drinks containers
reused for refilling).
Proper study reveals what packaging attracts or repels consumers.
Conclusion: Packaging aligned with consumer preference boosts sales.
8. Helps Consumers Themselves
Consumers often buy under the influence of income, emotions, or opinions of
others.
Consumer behaviour helps them make rational decisions by analysing cost-
benefit.
Examples:
Choosing between a ₹2 pen vs. a ₹100 fancy pen.
Deciding on utility-based purchases vs. prestige/fashion goods.
Using preference charts to prioritise what to buy, postpone, or reject.
Conclusion: Consumer science educates consumers about their own behaviour.

 Scope and Application - Detailed Notes

The consumer behaviour has very wide scope to study how the consumers take
a decision to purchase a particular product or service so that marketing personnel
may decide their strategy for marketing and sales promotion after properly

CONSUMER BEHAVIOUR 7
understanding the behaviour of various consumers. But the scope is not limited
only for profit marketing but even for health and education services which are not
for profit making if they are run by the state. Study of consumer behaviour is
necessary even for "not for profit marketing". In other words consumer
behaviour is researched even for social activities and sometimes even for
political, religious and other purposes.
Consumer Behaviour Is An Interdisciplinary Science
Since the behaviour of consumer is dependent upon physiological, psychological,
cultural, social, economic, language, regional, religious, political and other factors
it takes help of statistics, econometrics for research purpose. Thus study of
consumer behaviour is interdisciplinary science. To undertake research one has
to use research tools specially sampling, drafting of questionnaire, tabulation and
arriving at results and then interpret it properly and accurately so that the results
may be utilized for strategic policy decisions. All this require use of statistics and
econometrics, and proper understanding of economics, and other factors so that
one may reach correct, meaningful, fruitful and useful results.
Psychology
Study of consumer psychology is a most important part of consumer behaviour
research because it helps to know the attitude of consumers, their level of
learning, knowledge, perceptions, personality, and motivation for buying a
particular product or service. It helps to understand psychology of different types
of consumers based on their age, sex, income level, education, and rural or urban
background. For instance, a person living in Mumbai or Delhi thinks differently
than a person living in remote rural areas; their psychology, needs and
perceptions differ from the urban elite. Studying their psychology helps
marketers to segment the market and produce goods according to requirements
rather than thrusting the same product on all.
Examples: rural populations may prefer traditional clothing (dhoti), may not wear
shoes, and may use neem or babul stick (datun) for cleaning teeth rather than
toothpaste. Understanding such practices is essential to design effective sales
promotion and marketing strategies. Consumer psychology can also inform social
interventions (e.g., liquor prohibition often fails if imposed without studying
drinkers' motivations). Public health messaging (e.g., smoking risks) can succeed
when based on psychological insights.
Psychographics
Psychographics studies lifestyles to find markets for products like personal
health care, cosmetics, TV, cars, and furniture. In psychographic research,
consumers evaluate statements (strongly agree to strongly disagree) and rate
importance of products (very important to unimportant). Such research can also
capture opinions on social and political issues and supports opinion polls and
election projections.
Physiological Factors
Physiological factors relate to the properties and functions of living beings in
different life phases: babies, children, adults, elderly, men and women. Different
life stages create distinct consumption needs (e.g., baby care products like baby
soap, powder, oil; special aids for handicapped persons; school supplies for

CONSUMER BEHAVIOUR 8
children). Marketers must research each segment separately and further subdivide
by culture and income levels, especially in diverse countries like India.
Demography
Demography refers to measurable statistics of a population: age, sex, marital
status, education, income, occupation. Census data (collected every ten years in
India) is a key source. Demographic data helps project market size, estimate
demand, and segment consumers (state, town, village level). Example: India's
2001 census recorded a population of 102.7 crores; sex ratio, literacy rates,
and education levels are all vital for consumer research.
Geographic Segmentation
Location and climate greatly affect consumption. In large countries with diverse
climates (India, China, USA), needs differ by region: heavy woollens in cold
regions, light cotton in the south; dietary staples (rice vs. wheat); cooking oils
(groundnut, coconut, mustard) vary by area. Language differences also impact
advertising, labeling, and choice of words—wrong translations can cause offense
or disaster. Marketers must adjust packaging and messaging regionally.
Culture
Regional cultures shape dress, food, festivals, and consumer expectations. For
example, Punjabis may prefer bright gaudy clothes and foods like paratha, while
South Indians prefer dosa and idli. Film, music, and language preferences differ
and require localized products and promotions. In-depth study of regional
differences is essential to optimize sales.
Religion
Religion affects food habits, dress, and worship practices. Dietary restrictions
(e.g., Hindus avoid beef, Muslims avoid pork, Jains avoid many vegetables)
influence product demand. Festivals create seasonal spikes in demand (sweets,
fruits). Marketers must respect religious preferences when planning products and
campaigns.
Social Class
Social classes in India can be viewed by income (below poverty line, low-income,
middle-income, high-income) and by community/caste/religion. Different
classes have distinct needs and aspirations; marketers should segment
accordingly. Community-based preferences often persist even after migration,
creating demand for regional products abroad.
Backward Classes
Economically and socially backward groups (SC, ST, OBC, minorities) have
specific needs; government programs aim to support them. Marketers should
study and serve these segments to meet emerging demand.
Use-based Segmentation
Segmentation by usage: non-users, light, medium, heavy, and very heavy
users. Requirements and expectations differ for personal use vs. gifting, and for
home vs. office/party consumption. Marketers must study these patterns to tailor
offerings.

CONSUMER BEHAVIOUR 9
Economics
Economics underpins demand/price theory: as price falls demand tends to rise,
and vice versa, with diminishing marginal utility. Yet marketers observe
exceptions: prestige goods, perceived quality, and changing preferences can
make high-priced items desirable (e.g., motorcycles over scooters). Marketers
must blend economic principles with behavioural insights.

 Consumer India - Detailed Notes

A Masterpiece in Heterogeneity
India is a country of paradoxes. It has been so over the years, perhaps over
centuries. Consumer India, in particular, has all along been a masterpiece in
heterogeneity. With respect to the consumer, we have, over the years, referred to
'two Indias' within 'India'.

Consider the following:

• A nation that is at once modern and medieval
• A nation with two faces, urban and rural
• A nation with two nations within-India and Bharat

In more recent years, 'two Indias' within 'India' has become passé; the
discussions encompass 'the many Indias within India'. Even with the remarkable
growth and substantial transformation the country has undergone, the coexistence
of widely varying segments in the consumer population remains intact.

Joan Robinson: 'The frustrating thing about India is that whatever you can
rightly say about India, the opposite is also true'. Experts derive diametrically
opposite conclusions about Indian economy and consumer India using the same
data.
The Many Indias - The Multiple Reality
While everyone recognises the heterogeneity of India's environment, some go by
the 'two Indias' premise, while many embrace the 'many Indias' premise.
Consumer India displays a multiple reality. The 'two Indias' to which people used
to refer equating them with 'India' and 'Bharat', or urban and rural, or agriculture
and industry has now been replaced by the 'many Indias'.

A consumer tribe of contrasts: anyone grappling with India is led to several Indias
along a wide spectrum. Wide disparities in economic condition and income
distribution indicate many Indias. For example, rural India has a higher density
of crorepatis than urban India in one study. Urban India has 25 million
middle-class households; rural India too has 25 million—showing multiple
Indias within India and Bharat.
With Some Indias Much Has Changed; With Others, Little Has Changed
Some segments of consumer India have undergone substantial change (educated
middle class, new entrepreneurs, service providers), enjoying income increases
and asset value surges. In rural India, those benefiting from agricultural
prosperity or service provision have changed. Other large population segments

CONSUMER BEHAVIOUR 10
have not seen material gain.
'India Shining', 'India Rising' and 'India Poised' are phrases relevant only to
some segments, not all.
Some General Features about Consumer India
Demographics - Size, Age Mix and Dependency Ratio
United Nations estimated India's population around 1.35 billion as of 1 January
2018, extrapolating Census 2011 (1,210 million on 1 March 2011). India's
population was 17.74% of world population. Population density was 385 people
per sq. km (Census 2011) and about 450 in 2018. 32.8% is urban (439,801,466
people in 2018). Median age: 27 years. Gender ratio: 940 females per 1,000
males (Census 2011). Literacy rate: over 76% by 2011.
India expected to cross China in population by 2025 (UN 2017 Revision). India will
continue to grow until ~2061 when it may decline after reaching about 1,678.7
million.
Favourable Age Mix
India has the highest share in 20–59 years and lowest in 60+; in 2016 about
28.2% were 0–14 years, 66% in 15–64 years, and 5.81% over 65. By 2020
India set to become the world's youngest country with 64% in working age
group. Youth population projected to 464 million by 2021 and decline to 458
million by 2026. This 'demographic dividend' offers India an edge for GDP
growth if leveraged within ~20 years.
Bracketing of Indian Consumers into Specific Generations
Terms like Millennials, Baby Boomers, Generation X are not directly meaningful
for India unless India-specific definitions are developed. Such classifications are
analytical constructs and need India-specific consensus. We will revisit Indian
Millennials when discussing urban middle class.
Economic Condition / Income / Purchasing Power
India is undergoing an economic transition: GDP grew six times between 1991-
92 and 2011-12. Households have moved to higher income brackets; per capita
income has risen. While 'rich getting richer' is partly true, evidence suggests the
poor are becoming less poor and BPL percentage is declining. Table 9.2 shows
personal disposable income FY 2006-FY 2010 (291,007; 332,774; 373,454;
448,877; 512,213).
Oxfam (2018) reported high inequality: 58% of India's wealth owned by top 1%;
in 2017, 73% of wealth generated went to top 1%.
Culture Profile
India is a land of many religions, languages and cultures. Tradition remains
strong though changes are happening: break-up of joint families, women's
education and employment, urbanisation, new media and globalisation influence
culture and lifestyles. Indians often value family highly and place importance on
children's higher education. Politics, cinema and cricket are major
preoccupations.
Cultural Dimensions of Indian Consumers: Some Highlights

CONSUMER BEHAVIOUR 11
• Religion and family form the foundation of culture.
• Family is the umbilical cord tying Indians to roots; parents value child's higher
education.
• Politics, cinema and cricket are strong preoccupations.
• Indians may rate their culture as superior; viewed by others as highly
competitive.
• Positive: Indians are perceived as good entrepreneurs.
• Religious practices strongly influence consumer behaviour and some NGOs are
religious groups.
A Cultural Transition
India is experiencing cultural transition: acquiring new orientations while
retaining core aspects. Indians become an amalgam of new and old; diversity
defies generalisation.
A Social Transition Too
Social changes: expansion of education, urbanisation, rise of nuclear families,
women in employment, and modern media/social media are driving change.
Gender equality attitudes improving but slowly; addressing gender equality is
key for development.
IT and Mobile Phones Influence 'Consumer India' Significantly
IT and mobile phones touch consumers across strata. Mobile phones
revolutionised society—smartphones expanded this and India became the second
largest smartphone market. Internet access grew from 101 million (2011) to
300 million (2016); smartphone users projected to 178 million by 2020.
The Growing Reach of TV
TV, especially cable/satellite, exposes consumers to lifestyles and products,
kindling aspirations. ORG MARG data: 75% of urban India watches TV; many
rural areas also have substantial viewership—impacting over 600 million people.
Constructive Discontentment
Across classes, 'constructive discontentment'—increasing needs and
aspirations—pushes up demand and enlarges India's consumer market.
The Urbanisation Phenomenon
Urbanisation: from 400 million in cities (2018) to projected 590 million (40% by
2030). Eight states may have over half their population urban by 2030. McKinsey:
urban expansion will be rapid; next 250 million urban dwellers may arrive faster
than previous growth. 70% of India's GDP likely contributed by urban India by
2030.
The Smart Cities Mission
Launched in 2015 to develop 100 smart cities with core infrastructure and IT as
principal infrastructure. Funding ~796,000 crore (US$15 billion). 98 shortlisted;
20 in first lot. Smart cities aim to be citizen-friendly and sustainable.

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
 Significance of Consumer Behavior - Detailed Notes
Introduction
Selections from practical applications underscore the importance of
understanding consumers for solving contemporary problems. Some examples
take a societal perspective, others a micro (firm-level) viewpoint.
Consumer Behavior and Marketing Management
Effective business managers realize the importance of marketing to firm success.
Marketing is defined as the process of planning and executing the conception,
pricing, promotion, and distribution of ideas, goods, and services to create
exchanges that satisfy individual and organizational objectives. A sound
understanding of consumer behavior is essential to the long-run success of any
marketing program and is a cornerstone of the marketing concept.
Three Interrelated Orientations of the Marketing Concept
1. Consumers' wants and needs: Focus on identifying and satisfying
consumers' wants and needs; products and services are means to that end.
2. Company objectives: Firms select specific wants/needs to satisfy based on
company objectives and advantages.
3. Integrated strategy: Coordinated marketing efforts maximize impact and
achieve firm objectives.
Limitations of the Marketing Concept and Societal Concerns
Attempts to satisfy consumer wants can generate negative societal consequences
(e.g., convenience packaging contributing to solid waste; aerosol propellants
linked to ozone depletion). Adjustments incorporate societal objectives, but
understanding consumers remains fundamental.
Major Activities for a Marketing-Oriented Organization
Market-opportunity analysis, target-market selection, and marketing-mix
determination are key activities where consumer behavior plays a central role.
Market-Opportunity Analysis
Examine market trends (lifestyles, income) to identify unsatisfied wants and
needs. Assess company abilities to satisfy these desires. Examples: fitness
products, coin-operated blood pressure machines, low-priced minor-surgery
centers.
Target-Market Selection
Reviewing market opportunities may reveal distinct consumer groupings with
unique wants. Companies may target each segment with tailored offerings or
focus on a few segments. Example: Soft-drink market segments: food-store,
vending-machine, fountain markets; packaging and promotions vary by segment.
Colgate-Palmolive segmented by lifestyle/personality to create Irish Spring,
capturing 15% of deodorant-soap market within three years.
Marketing-Mix Determination (Product, Price, Place, Promotion)

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Product Decisions
Consumer behavior influences product decisions: size, shape, features,
packaging, service aspects, warranties, accessories. Example: Bottled water
market and water-treatment systems illustrate product-form innovations and
perceptions of purity/healthiness driving demand.
Price Decisions
Price decisions include what to charge and discounts. Consumer behavior
considerations: price awareness, price sensitivity, required price reductions for
promotions, and discount policies. Example: Expensive watches sell as status
symbols; consumers sometimes equate high price with prestige rather than
accuracy.
Place Decisions
Place decisions involve where and how to offer products, distribution
mechanisms, outlet type and location, channel control, and retailer image.
Example: Sears Financial Network attempted cross-selling financial services
in retail stores but faced psychological and practical challenges.
Promotion Decisions
Promotion decisions cover methods of communication, capturing attention,
conveying messages, and ad frequency. Comparative advertising poses
dilemmas: can inform but also confuse or reduce credibility. Examples: Vivitar
vs Kodak, Avis vs Hertz, Pepsi Challenge vs Coke.
Consumer Behavior and Nonprofit & Social Marketing
Nonprofit and social organizations (governments, NGOs, universities) can
apply marketing concepts to promote ideas and behaviors (crime prevention,
charitable giving, family planning). Understanding consumer decision
processes helps design effective appeals and programs.
Example: American Cancer Society
Knowledge of potential contributors' characteristics and motivations aids
fundraising; understanding barriers to medical exams (cost, time, fear) helps
design interventions to encourage regular check-ups.
Combating AIDS - Social-Marketing Example
Social-marketing programs in Africa combined government aid and market
mechanisms to promote awareness and protective behavior. Strategies included
posters, comic books, clubs, and selling condoms at low cost to engage local
retailers and create perceived value. Results: increasing condom sales and
declining STI incidence in some areas (e.g., Zambia).

CONSUMER BEHAVIOUR 14
 UNIT – 2
PERSONAL AND PSYCHOLOGICAL INFLUENCES

 Motivation in Consumer Behavior - Detailed Notes

Concept of Motivation
Motivation asks the question ‗why?‘ about human behaviour. For example: Why
do consumers prefer McDonald‘s hamburgers over Nirula‘s Burgers? Why is
someone reading a particular book? Why does a person buy only from a certain
shop? Very few answers to these 'why' questions are simple or straightforward. A
person is said to be motivated when his or her system is energized (aroused),
made active, and directed towards a desired goal. Buying behaviour results from
three interacting factors: ability to buy, opportunity to buy, and motivation
(wish, need, or desire).
Important: Motivation is only one of the elements of buying behaviour. Even with
strong motivation, if ability or opportunity is missing, purchase will not occur.

Needs, Goals and Motives

Motivation can also be described as the driving force within individuals that
impels them to action. This driving force is the result of tension due to
unfulfilled needs. To reduce tension, individuals strive to fulfill their needs,
influenced by thinking and learning. Marketers attempt to influence consumers‘
cognitive processes.

Needs
Every individual has needs, which may be innate or acquired. Innate needs
(physiological/primary) include food, water, air, shelter, sex. Acquired needs

CONSUMER BEHAVIOUR 15
(psychological/secondary) are learned from surroundings/culture, e.g., power,
prestige, affection.
Goals
Goals are the end result of motivated behaviour. Four types of goals are
identified:
(a) Generic Goals — broad classes of goals (e.g., need for washing hands).
(b) Product-Specific Goals — specific products for the task (soap, liquid wash).
(c) Brand-Specific Goals — preference for a brand (Lux, Pears, etc.).
(d) Store-Specific Goals — choice of outlet (Big Bazaar, Reliance Fresh).
Goal Selection
Goal selection depends on personal experience, physical capacity, accessibility,
and cultural norms/values. Self-image plays a key role—products congruent with
self-image are preferred. Needs and goals are interdependent: one cannot
exist without the other.
Motives
Motives are classified as Rational (objective criteria: size, weight, price) and
Emotional (subjective criteria: status, individuality, affection, fear). Consumers
aim to maximize satisfaction, but what seems irrational to others may be
rational to the consumer. Thus, it is difficult to clearly separate rational and
emotional motives.
Can Needs Be Created?
Marketers cannot create new needs. They can only stimulate existing needs
or channel them toward specific products or brands. Subliminal methods may
influence direction slightly, but evidence shows no one can create a completely
new need. Example: 'Hit' spray for cockroaches and mosquitoes addressed
existing needs for safety/cleanliness.
Maslow’s Hierarchy of Needs
Maslow‘s theory ranks human needs in a hierarchy from lower-level
physiological needs to higher-level self-actualization. Individuals strive to
satisfy lower-level needs first; when satisfied, higher needs emerge.
Physiological Needs
Physiological needs are the most basic level of human requirements, essential
for sustaining biological life. These include food, water, air, shelter, clothing,
and sex — all the biogenic needs. According to Maslow, when these needs are
chronically unsatisfied, they dominate all thought and behavior. For example, a
starving man thinks only of food. For many, these needs are satisfied, allowing
focus on higher-level needs. However, for homeless people or those in disaster-
hit regions, life revolves around fulfilling these needs.
Safety Needs
Once physiological needs are met, the next level involves safety and security.
These needs relate to physical safety as well as stability, order, routine, and
control over life. Health and access to healthcare, savings accounts, insurance

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policies, education, and vocational training are examples of how people meet
safety needs.
Social Needs
The third level of Maslow‘s hierarchy includes love, affection, belonging, and
acceptance. People are motivated by warm human relationships and family
love. Marketers often emphasize social motives in ads for soaps, detergents, food,
mobile services, and even cars. In cultures like India, family-oriented appeals are
especially powerful.
Egoistic Needs
The fourth level relates to egoistic needs, which can be inward or outward
oriented. Inward ego needs include self-esteem, self-acceptance,
independence, and personal satisfaction. Outward ego needs include prestige,
recognition, reputation, and social status. Advertisements often highlight status
symbols to appeal to these needs.
Need for Self-Actualization
The highest level in Maslow‘s hierarchy is self-actualization. This refers to
fulfilling one‘s potential and becoming everything one is capable of. Maslow
described it as: 'What a man can be, he must be.' Examples include an athlete
training to be the best, an artist expressing creativity, or a scientist striving to
cure diseases. Organizations often encourage employees to achieve self-
fulfillment through their careers. Self-actualization may not always be creative
but reflects reaching personal potential.
Note: Needs may overlap; no need is ever completely satisfied. Lower-level needs
can re-emerge temporarily (e.g., hunger) even after higher needs are pursued.

 What Is Personality?
The study of personality has been approached by theorists in many ways. Some
emphasize heredity and early childhood experiences, while others stress social and
environmental influences. Some see personality as a unified whole, others focus
on traits. Thus, it is difficult to have a single definition. A working definition is:
Personality consists of inner psychological characteristics that determine and
reflect how a person responds to their environment. These inner characteristics
include qualities, attributes, traits, factors, and mannerisms that distinguish
one individual from another. They influence product choices, responses to
promotional efforts, and patterns of consumption. Thus, identifying personality
traits is useful for market segmentation strategies.
The Nature of Personality
There are three central properties of personality:
1. Personality reflects individual differences.
2. Personality is consistent and enduring.
3. Personality can change.
Personality Reflects Individual Differences
No two individuals are exactly alike, since personality is a unique combination of
inner characteristics. However, people may be similar in one trait but not others.

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For example, consumer ethnocentrism: some are 'high' (open to foreign-made
products), while others are 'low' (reluctant to buy foreign products). Personality
helps categorize consumers into groups based on traits. If each person were
different in all traits, segmentation and targeted marketing would be
impossible.
Personality Is Consistent and Enduring
Personality is stable and tends to remain consistent over time. For example, a
sister who has always cared about clothes illustrates consistency and endurance.
These qualities allow marketers to explain and predict consumer behavior.
Marketers cannot change personality but can appeal to traits of their target
group. Even with consistent personality, consumption may vary due to
psychological, sociocultural, environmental, and situational influences.
Thus, personality is only one of many factors shaping consumer behavior.
Personality Can Change
Personality can change due to life events such as marriage, childbirth, death of
a parent, or a job change. It may also shift gradually as individuals mature. For
example, an aunt noting her niece has become more open-minded with maturity.
Personality stereotypes also evolve: men's traits have remained fairly constant,
while women‘s traits have grown more masculine due to entry into male-
dominated jobs. This indicates a convergence of male and female personality
characteristics over time.

 CONSUMER-ROOTED SEGMENTATION BASES

This group includes two types of personal attributes: facts that are evidence-based
and can be readily determined and categorized along an objective criterion and
cognitions, which can mostly be determined through indirect, psychological tests
and classified into subjective categories, depending on the researcher. For
example, demographies such as a person's age, gender, ethnicity, and
income are objective and empirical, can be easily determined through questioning
(some can even be observed) and...
DEMOGRAPHIC SEGMENTATION
The core of almost all segmentations is demographics, due to the following
reasons:
1. Easiest and most logical way to classify people.
2. Measured more precisely than other segmentation bases.
3. Most cost-effective way to locate and reach specific segments.
4. Demographics help identify business opportunities.
5. Many consumption behaviors, attitudes, and media exposure patterns are
directly related to demographies.
AGE – Product needs vary with consumers' age. Younger investors are advised to
invest aggressively, while older consumers should invest cautiously. Age also
influences buying priorities and luxury perceptions. In India, nearly 40% of the
population is below 21, forming a major market segment. The baby boomers
(1946–1964) in the US are the largest age segment, controlling most of the
nation's wealth and disposable income. Following cohorts are Generations X and
Y (Echo Boomers).

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GENDER – Traditionally, women used cosmetics and men used tools, but roles
have blurred. Now women also buy repair tools, and men use grooming products.
Ads increasingly reflect these changes.
MARITAL STATUS – Households are key consuming units. Marketers target
singles, divorced, single parents, and dual-income couples differently.
FAMILY LIFE CYCLE – Families pass through stages: bachelorhood,
honeymooners, parenthood, post-parenthood, and dissolution. Each stage
requires different products/services. Major life events (marriage, child birth, job
change, etc.) also act as segmentation variables.
INCOME, EDUCATION, AND OCCUPATION – Indicators of ability to pay.
Combined with age/occupation, they define target groups (e.g., affluent elderly,
yuppies). Higher education usually leads to higher prestige occupations and
income. Social class segmentation is based on education, occupation, and income.
GEODEMOGRAPHIC SEGMENTATION
Where a person lives influences consumption. Examples: clothing based on
climate, city vs. rural lifestyles, and tourism markets (e.g., "Tourism of Doom").
Companies like Absolut Vodka use geographic branding (e.g., "Absolut New
York"). In India, tea, skin cleansers, and detergents vary by region.
Geodemographics combines geography + demographics (e.g., Claritas PRIZM
NE, classifying households into 66 clusters).
LIFESTYLES INFLUENCES
Lifestyle refers to how consumers live and spend time and money. It is
influenced by culture, groups, personality, and individual processes.
Lifestyles are context-specific personality traits, measured by activities (e.g.,
outdoor time, health consciousness). They are useful in predicting purchase
patterns. Example: Beats by Sivamani targets active youth, Patanjali by Baba
Ramdev appeals to health-conscious consumers.
PSYCHOGRAPHICS
Psychographics = measurement of lifestyles using AIO (Activities, Interests,
Opinions) surveys. Helps create lifestyle profiles and identify niche segments.
Example: Indian tourism segments like Adventure Loving Consumers (trekking,
rafting, scuba diving, etc.).
CONSUMER PERCEPTION
Perception vs. Reality – Consumers‘ perceptions don‘t always match reality.
Perception = consumer‘s awareness and interpretation of reality. It is subjective
reality, while the actual environment = objective reality. Example: same
amount of food on different plate sizes → different perceptions of quantity.
EXPOSURE, ATTENTION, AND COMPREHENSION
- Exposure – Bringing stimuli within consumer‘s senses (sight, sound, touch,
taste, smell). Example: Tata Tea’s Jaago Re campaign.
- Attention – Purposeful allocation of information-processing. Consumers are
selective due to overstimulation.
- Comprehension – Interpreting stimuli meaningfully. Different consumers may
perceive the same situation differently (e.g., waiting times at clinics). Marketers
can shape perceptions through communication and environment.

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
 Consumer Perception Process Notes
If a friend were to ask, "Do I look good in this outfit?" you would immediately
draw upon your perceptions to determine how to respond. Perception describes
how consumers become aware of and interpret the environment. It includes
three phases: sensing, organizing, and reacting.
These phases overlap with exposure, attention, and comprehension. We
sense stimuli, organize them, and then react by developing responses.
SENSING
Consumers sense stimuli to which they are exposed. Sensing = immediate
response to stimuli through the five senses (sight, smell, touch, taste, sound).
Example: entering a store, tasting food, browsing online. However, sensing alone
does not create meaning → leads to the second stage.
ORGANIZING
Cognitive organization = how the brain assembles sensory evidence into
something recognizable. Example: dining in the dark → brain uses smell, texture,
and sound to identify food.
- Consumers develop interpretation during this stage, providing initial cognitive
(thinking) and affective (feeling) meaning.
- Even sounds can influence perception (e.g., "Sepsop" preferred as an ice cream
name because repetition patterns create favorable evaluation).
- If stimuli are difficult to categorize, the brain continues processing. If
unresolved, the consumer may avoid the stimulus.
Three Possible Reactions:
1. Assimilation – stimulus easily fits a category. Example: triangular, spicy snack
recognized as "Samosa."
2. Accommodation – stimulus shares some characteristics, requiring exceptions.
Example: samosas in new shapes → still categorized as samosa. Novel stimuli
may be preferred.
3. Contrast – stimulus cannot be categorized. Example: fermented mare‘s milk
(koumiss) in Kyrgyzstan. Usually creates negative feelings.
REACTING
Final stage = reaction. If stimulus is recognized, nearly automatic responses
occur. Example: brake lights ahead → driver applies brakes. Reactions can be
physical or mental.
APPLICATIONS TO CONSUMER BEHAVIOR
Consumers rely on perception for safety judgments. Example: a poorly lit store
without security is perceived unsafe.
Even subtle cues influence perceptions: in watch ads, time is set at 10:10 to
make the watch appear ―smiling‖ (anthropomorphism = giving humanlike traits to
objects).
SELECTIVE PERCEPTION
Consumers face information overload → practice selective perception.
Types:
- Selective Exposure – screen out most stimuli, expose to few.
- Selective Attention – pay attention only to certain stimuli.

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- Selective Distortion – interpret information biased by prior beliefs.
Example: sports fans interpret the same referee decision differently.
EXPOSURE
Exposure = stimulus brought into consumer‘s proximity so it can be sensed. It is
the first step to learning (intentional or unintentional).
SUBLIMINAL PROCESSING
Refers to sensing low-strength stimuli below conscious awareness. Stimuli
weaker than the absolute threshold of perception. Example: mosquito landing
unnoticed, faint sounds, or quick flashes of images.
Subliminal Persuasion Beliefs:
- Ads can induce purchases subliminally.
- Products/packages can be altered to appeal subliminally.
- Sexual imagery hidden in ads/products.
- Subliminal tapes can improve well-being.
Vicary Experiment – claimed subliminal ―Drink Coke‖ / ―Eat Popcorn‖ messages
in a movie boosted sales. Later revealed as a hoax. Replications found no effect.
Research shows subliminal persuasion is ineffective as a marketing tool. Small
effects may exist (e.g., upbeat music in restaurants → faster eating). Despite this,
60% of Americans believe in subliminal advertising’s power. Consumers
may use this belief to justify behaviors (e.g., smoking, drinking).
Truth: Vicary fabricated the experiment to gain publicity. Marketers
sometimes jokingly use obvious subliminal-like imagery in ads, knowing
consumers will see it.

 Attitudes and Attitude Components Notes

Attitudes = relatively enduring overall evaluations of objects, products, services,
issues, or people.
- Play a critical role in consumer behavior.
- Motivate people to behave consistently.
- One of the most researched topics in consumer research and social sciences.
Attitudes and value are related:
- Positive attitudes toward products that deliver value.
- Negative attitudes when products deliver poor value.
COMPONENTS OF ATTITUDE (ABC Approach)
1. Affect – feelings about an object.
Example: ―I really like the iPhone 6.‖
2. Behavior – overt behavior or intentions.
Example: ―I always buy Apple products.‖
3. Cognition – beliefs about the object.
Example: ―My iPhone 6 keeps me connected.‖
These three together (ABC model) describe a consumer‘s overall attitude.
FUNCTIONS OF ATTITUDES (Functional Theory)
Attitudes serve four key functions:

CONSUMER BEHAVIOUR 21
1. Utilitarian Function – based on reward and punishment.
- Consumers form attitudes to maximize rewards and minimize punishments.
- Example: Wearing trendy clothes to fit in socially.
- College sports fans wear team apparel to connect with others.
2. Knowledge Function – helps simplify decision-making.
- Example: Avoiding credit card offers to stay out of debt.
- Helps consumers avoid undesirable situations, approach desirable ones.
- Brand loyalty simplifies decisions → buy what is already known and liked.
- Attitudes are linked to comprehension and stored in long-term memory.
3. Value-Expressive Function – attitudes express core values, self-concept,
beliefs.
- Example: Supporting Green products to show concern for the environment.
- Express values through bumper stickers, posters, t-shirts.
- Products serve as a positive expression of self-image.
4. Ego-Defensive Function – protects self-image, defends against threats.
- Example: Smokers may discount evidence that smoking is harmful.
- Example: College males wearing athletic apparel to enhance self-image.
- Works as compensation for insecurity (e.g., feeling out-of-shape).

 Family Life Cycle Notes

The Family Life Cycle (FLC) represents the stages families typically pass
through, reflecting changes in demographics, lifestyle, and consumption patterns.
- FLC is a composite variable, combining demographics such as: marital status,
family size, age of family members, and employment status of the head of
household.
- Ages of parents and levels of disposable income are inferred from FLC stages.
- Traditional FLC is being re-examined due to nontraditional family structures
and lifestyle arrangements.
TRADITIONAL FAMILY LIFE CYCLE STAGES
1. Bachelorhood – Young single adult living apart from parents.
2. Honeymooners – Young married couple (before first child).
3. Parenthood – Married couple with at least one child at home.
4. Postparenthood – Older married couple, children no longer dependent.
5. Dissolution – One surviving spouse after partner‘s death.
STAGE I: BACHELORHOOD
- Young single men and women, either employed or students.
- Spending patterns: rent, furnishings, cars, travel, entertainment, clothing,
accessories.
- Marketers target singles for a wide variety of goods and services.
STAGE II: HONEYMOONERS
- Begins immediately after marriage, continues until first child.
- Period of adjustment to married life.
- Dual-income couples → higher combined income.
- Expenses: setting up a new home (appliances, furniture, décor, dishes, etc.).
- Can indulge in luxuries or save/invest.
- Likely to seek advice from experienced married couples.

CONSUMER BEHAVIOUR 22
STAGE III: PARENTHOOD
- Begins with first child → lasts 20+ years.
- Also called full nest stage, divided into: preschool, elementary, high school,
and college phases.
- Changes in family structure and interrelationships.
- Financial resources shift as careers advance, while expenses rise due to child-
rearing and education, then fall as children become self-supporting.
STAGE IV: POSTPARENTHOOD (Empty Nest)
- Children have left home. For some parents → traumatic, for others →
liberating.
- Represents a "rebirth" – more leisure, travel, new hobbies.
- Financially comfortable: savings, investments, fewer expenses.
- High disposable income → important market for luxury goods, cars,
vacations, second homes.
- Retired couples: pursue interests, but require sufficient savings.
- Some older adults continue working out of passion.
- Media habits: heavy use of television for information and entertainment.
STAGE V: DISSOLUTION
- Occurs with the death of a spouse.
- Adjustment depends on health, financial stability, and support system.
- Surviving spouse (often wife) may adopt a more economical lifestyle.
- Many seek companionship through social groups, hobbies, or new relationships.

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CONSUMER BEHAVIOUR 23