Consumer Behaviour
Lecture # 1 – Chapter 1
Consumer Behaviour
• Book – Uploaded on Canvas.
Course Outline
• Consumer Behaviour is a process. Initially touted as buyer behavior
(60s and 70s) but later recognized as on going process.
• Its an exchange, a transaction in which two or more organizations or
people give receive something of value, is an integral part of
marketing.
• Why should managers, advertisers, and other marketing professionals bother to about
consumer behavior? Simply, it’s good business. The basic marketing concept that you
(hopefully) remember from your basic Marketing class states that organizations exist to
satisfy needs.
• As a rule of thumb, marketers use the 80/20 rule: 20 percent of users account for 80
percent of sales. This guideline often holds up well, and in some cases even this lopsided
split isn’t big enough: A study of 54 million shoppers reported that only 2.5 percent of
consumers account for 80 percent of sales for the average packaged‐goods brand.
• The 1 percent of pet owners who buy 80 percent of Iams pet food spend $93 a year on the
brand, and
• the 1.2 percent of beer drinkers who account for 80 percent of Budweiser sales spend $170
on Bud each year.
• Of the 1,364 brands the researchers studied, only 25 had a consumer base of more than 10
percent that accounted for 80 percent of volume.5 So, just think of the 80/20 rule as a
guideline rather than set in stone.
Application Areas of CB
1. Marketing Strategy (as discussed above)
2. Regulatory (Public) Policy
3. Social Marketing
4. Personal Consumer Skills
Orientation in CB
• Anthropology( cultural and cross culture studies)
• Economics
( demand, supply, purchasing power and so on…)
• History and geography
• Psychology ( attitudes, perceptions, beliefs an so on…)
• Sociology
Characteristics Affecting Consumer
Behavior
Key Factors in studying consumer behavior
1. Cultural
2. Social
3. Personal
4. Psychological
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Factors Influencing Consumer Behavior
Cultural Social Personal Psychological
Culture Reference Age & Life‐ Motivation
Groups Cycle Stage
Subculture Perception
Family Occupation
Social Class Learning
Roles & Status Economic
Beliefs &
Situation
Attitudes
Lifestyle
Personality &
Self‐Concept
Influences on
the consumer
purchase
decision process
Consumer and Marketing
• Peter Drucker and Consumer
The sole aim of business is to create consumer
• Consumer behavior elements
1. Pre‐purchase
2. Purchase
3. Consumption
4. Post consumption
Marketing Strategy and Consumer Behavior
MARKET MARKET
ANALYSIS SEGMENTATION
MARKETING CONSUMER
STRATEGY DECISION OUTCOMES
PROCESSES
Questions….
• Why do we buy?
• How do we buy?
• Where do we buy
from?
• How much do I buy?
• With whom do I buy?
• For whom do I buy?
• How often do I buy?
• What brand do I buy?
The Nature of Consumer Behavior
1. External Influences
2. Internal Influences
3. Self‐Concept
4. Situations
5. Experiences and acquisitions
Consumer decision process
• Consumer decision making steps (5 steps)
• Consumer decision process and corresponding model to elaborate
their decision making process in order to analyze their behavior along
different steps.
• CDP model
The holistic Buyer Decision Process
• Five Stages:
1. Need recognition
2. Information search
3. Evaluation of alternatives
4. Purchase decision
5. Post‐purchase behavior
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CONSUMER DECISIONS:
Theory and Reality in Consumer Buying
Problem
Recognition
Information
Search
Evaluation of
Alternatives
Purchase
Postpurchase
Evaluation/
Theory
Behaviors
Complications
Consumer Decision-Making
Process
Need Recognition
Information Search
Cultural, Social,
Individual and
Psychological Evaluation
Factors of Alternatives
affect
all steps
Purchase
Postpurchase
Behavior
Consumer needs..
• Maslow’s famous hierarchy of needs helps both marketers and
consumers to understand and classify their needs in order to find the
best choice of satisfaction.
Hierarchy of
needs
The Buyer Decision Process
Process Stages
• Needs can be triggered
by:
• Need recognition • Internal stimuli
• Information search • Normal needs become
strong enough to drive
• Evaluation of alternatives behavior
• Purchase decision • External stimuli
• Postpurchase behavior • Advertisements
• Friends of friends
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The Buyer Decision Process
Process Stages • Primary source of
information:
• Need recognition
• Information search • Internal
• Evaluation of alternatives Retrieval and cognitive
• Purchase decision process
• Post‐purchase behavior
• external
6 - 24
• Consumers exhibit heightened attention or actively search for information.
• Sources of information:
• Personal
• Commercial
• Public
• Experiential
• Word‐of‐mouth
Approaches to Search for information and Problem Solutions
INTERNAL
Memory
Thinking
EXTERNAL
Word of mouth, media,
store visits, trial CATALOG
The information search stage
An internal search involves the scanning of
one's memory to recall previous experiences Personal sources
or knowledge concerning solutions to the (friends and family)
problem-- often sufficient for frequently
purchased products.
Public sources (rating
An external search may be necessary when services like Consumer
Reports)
past experience or knowledge is insufficient,
the risk of making a wrong purchase
decision is high, and/or the cost of gathering Marketer-dominated
information is low. sources (advertising or
sales people)
The evoked set: a group of
brands from which the buyer can
choose
Determinants of External Search
Cost vs. Benefits of Search
• Market Characteristics
• Product Characteristics
• Consumer Characteristics
• Situation Characteristics
The mechanism of consumer loyalty achievement
• By studying consumer behavior marketers being able to understand
different behavior of various consumers toward different products
and brand .then they can set proper set of strategies in marketing mix
policies to target and serve consumers in different segments which in
return would result in consumer satisfaction , consumers satisfaction
will undoubtedly lead to consumer loyalty and constant profit for
company.
Summary….
• Consumer and customer
• Consumer behavior
• Application of CB
• Orientation of CB
• Underlying characteristics
• Consumer decision process ( CDP)
