INTRODUCTION TO THE STUDY OF

CONSUMER BEHAVIOUR

As thetwentieth Century has come to a close and we have moved

we can see into the third millennium,
many developments and changes taking place around us with all the industries and
firms within each
industry trying to keep pace with the
people.Though for decades together, marketers have regardedchanges
and diverse needs of the
all activities to 'customer
as the King
and
satisfy him or hér, this concept is gaining more momentum and importance
evolved
today.
This can largely be attributed to the
prevailing
become intense but over and above with the market
market situation. Not only has competition
the challenge before the marketer is to understand the
being flooded with many me-too products,
offer goods /services accordingly. Today the
diversity of consumer behaviour and
company image is built and made knowm by its
customers. Thus the success of the firm will be determined
by how effective it has been in
meeting the diverse consumer needs and wants by treating each customer as unique and offering
products and services to suit his or her needs.
More than a century ago, the father of our nation, Mahatma Gandhi, had made a
and deep meaningful statement at Johannesburg, South Africa in 1890 -"A
visionary
customeris the most
important visitor on ourpremises. He is not dependent on us. We are dependent on him. Heis
not an interruption on our work. He is the purpose ofit and not an outsider on ourpremises. He
is a part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us
the opportunitytodoso". Though this statement was not made in the marketing concept, there
is a lot of wisdom and insight into Mahatma's words.
Today, all the firms are engaged in a process of creating a life time value and relationship
with their customers. This chapter starts with a discussion on the diversity of consumer behaviour
and the need for studying consumer behaviour as a related field of marketing. The reader is also
introduced to the interdisciplinary approach to the study of consumer behaviour and the
importance of consumer research studies (including the history of consumer research and
consumer research process) in the field of marketing.

DIVERSITY OF CONSUMER BEHAVIOUR

Traditionally the word 'customer" was used to define people whom the organisation dealt
with externally. Though the word Customer is used as a single unit, purchases could be made
both by individuals and groups of people involved in the decision making process. The term
customer refers to the purchaser of a product or service. They may or may not be the ultimate
consumer. Whereas the term consumer refers to the end user of a product or service" They
may not be the
customer.
may or
Thus, understanding of the term 'customer and 'consumer is necessary especially in the
Pvent of the dramatic shifts that have Bbeen witnessed atthe market place in the 1990s. This is
isible from the sharp changes in demography, drastic varations in the life style patterns of the
consumers and the revolution that has taken place in the field of communication technology.
 Consumer Behaviour

newgeneration customers
These
exposed to anew generation
of customers. expectations, preference
erers are being
consumer

to be differentiated on the basis of

individual differences in to brands so as to
nave and even willing
try competing
not very brand loyal above discussions is
it obvious, that
C H O I c e (options), satisfaction. From the be difficult to
the perceived higher value behaviour. It would
taln do the exercise of analysing consumer variables. So
have to re
conventional demographic
aeters customers by the
of to identity the sources,
Cassiry the present generation behaviour of the customers by trying
marketers are engaged in gauging the the consumer behaviour and also the emerging new
uming and direction of the changes in to the changes in the most
competencies and perspectives. all to enable them to respond
to tackle the emerging
. .

a new paradigm
manner. Thus the priority will be to develop
erectrve
challenges at the market place. To quote George S.Day
"Every dimension ofmarket orientation
and channelmembersin
competitors
about customers,
emphasises the ability ofthe firm to leamevents and trends in prospective
markets"
order to continuously sense and act on

varying consumer tastes and behaviour, marketers have also adopted strategies
lo match thevalue and relationship marketing
nke stressing on pricing (high quality at a reasonable lower price)
which can in the long run result in brand or store loyalty).
servicing to add to customer delight to customised
They have also taken steps by moving away from the traditional distribution channels,
designed channels and now to direct marketing (or selling directhy to the consumer). This can be
seen by the lot of glitter shines on the shelves of exclusive and not -so- exclusive retail outlets
around the country, some in an attempt at imitating the giant supemarkets, departmental stores
and places of the affluent societies. This penetration has percolated deeper into other cities and
sImaller towns right up to the rural habitats.
The new products and product styles are transforming the total ambience and are acting as
stimulants beitessential items like food and clothing or household accessories or status symbols
like jewellery, ACs, home theatres and even cellular phones. This can be visible in the cultural
changes in the major segments of life.
.Primary needs- health, hygiene, basic foods and clothing
Living styles -expressed in products such as jeans, fun foods, CD's.
Imitation of the affuent and ego based life styles
cars.
expressed in expensive watches, luxury
.High technology to match global
machines alongwith CAD, CAM andcompetitiveness-faxes,
imaging.
e-mail, Intemet, photocopying
All this only goes to prove the
significant concern for the
primary force and the ultimate target of all the marketers. So theconsumer who has become the
to determine the challenge before the marketer is
appropnate
understanding of the maketing channels and consumer
psychographics to have a
behavioural aspects of target market. Another relevant better
is that in
of being surrounded by diverse goods and aspect
services, and the freedom to choose the desired product spite
or service, there are also many
similarities found
beings desire to heve clothes. But the type of clothesamong consumers. For instance, all humman
environmental factors such as social and cultural preferred by us will be influenced by several
variables such as age, sex, education, environment. There are other demograpnic
of clothes worn by a geographical
But marketers
location etc., which will have a say in the type
person.
are all consumers. And as
can take
respite from the fact that we (human beingo
consumers, we play a vital role in the
The Potential development of the economy.
The demand for industrial products in the
post liberalisation period has emerged as a very
powerful stimulant to India's economic
development and international capital inflows.
 5
-Introduction to the study of Consumer Behaviour
fourth largest inn
If everything goes well, the Indian economy is poised to become the
World in the next two decades. The Centre for Industrial and Economic Research (CIER) preaic
a steady growth for Indian industry in the decade, with the market value rising to Some
The consumptro"
40,000 billion by 2006-07, almost two and a half times of what it is today.
behaviour of individuals will affect the basic demand for basic raw-materials, for traspora
production, finance companies, human resources development, and all other types I Tesour

which will affect the economny development.

In this chapter, we will examine the need and importance of studying consumer denavou
understand the history of consumer research and the relationship between consumer benaviou
and marketing management.
CONCEPT AND NEED FOR STUDYING CONSUMER BEHAVIOUR /0
decisions on how
Consumer behaviour can be said to be the study of how individuals make
to spend their available resources (time, money, effort) n various consumption-related items.
around
This simple definition of behaviour tells marketers to resolve every activity
consumer

the ultimate consumer and gauge their behaviour by specifically focusing

on:

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?
Why do they buy them? And
How often do they use them?
factors influence the decision making
These questions will help in understanding better what
identifies the number of people who
process of the consumers. The decision making process
a role to them like the user, decider, influencer, and
are involved in this process and ascribes
-

buyer.
It is believed that consumers or customers make purchase decisions on the basis of receipt
Thus it will be very important to
of a small number of selectively chosen pieces of information.
to help them to evaluate
understand what and how much information is required by the customer
the goods and services offerings.
The follovwing diagram (Fig.1.1) will help in throwing light on the consumer decision making
behaviour.
High involvement ow involvement
purchase decision purchase decision
Decision making Complex decision making Variety seeking (cereals)
(information search, consider (Automobiles, autos)
brand alternatives)
Habit Brand loyalty Inertia
(little or no information search, (cigarettes, perfumes) (canned vegetables
considers only one brand)
paper towels)
Involvement in purchase decision
Fig.1.1 Consumer decision making

Source: Assaell ( 1987) Consumer Behaviour and Marketing Action, Kent publishing company.
Re-adapted: Understanding Customers 1996-97, Rosemary Phipps and Craig Simmons 1996.
 Consumer Behaviour

c o n s u m e r
in the decision
of the
involvement
of complex product
From the above figure we c a n s e e that the
case
like in
8urewe involved what
-

understand
process of p u r c h a s e to
making vary with the type important
there will bo so on. Thus, it is veryevaluate goods a n d services.
OVement and to
information the to be able a s what features
e customer feels will helo them facets s u c h
O beyond the from
s o n making
process goes
consumers, what
benefits are they eseeking
v e n includes
or product desiar
design will be acceptable to behaviour
Oduct Today
consumer
post purchase
suitable etc.,
wnat price will be behaviour. Because the
Ost satisfaction o r dissatisfaction
communicaions
(Word-of mouth)
hoh Purenase repercussions on the
viour of the customers will have
they have with the firm's prospective customerS organisational
customers t h e personal consumer
and
uay, there aretwo types of consumers purchase decision is given
consumer. h e various factors influencing the
hereunder:

Stimuli
H Information
processing The
consumer
Decisionn
making
Response

T
Cognitive | Consumer Culture Social Influence Situational
thinking personal class groups variables
processes characteristics influences
Perception .Demographic .Values Social Reference| Purchase
beliefs class groups occasion
structure
Attitudes .Lifestyles Cross Family Market
cultural communication
influences
Needs & .Personality Sub- Society Opinion Product
motives traits cultural Leaders
influences positioning9
Innovations Stores
Patronage&
shopping
behaviour
Price
Sales
personnel
influence
Individual factors
Fig, 1.2: The various Environmental factors
individual and
Source: Assaell (1987) Consumer environmental factors
Behaviour and influencing purchase decisions.
Marketing Action Kent
publishing house.
 - C o n s u m e rBehaViIOur

-18
in analysing
and interpreting
9. Once the
information is collected, the next step
involves
lts?
the data. Which means to work out and find out what are tne
the report.
This writing o
10. The last step is to o r writing
written form
the data in a written
present the form orV
report will be dond
done keeping in mind :
Who will read the report?
What is the outcome behind
And how should the
writing the report
report be written?
RESEARCH METHODS
Quantitative Methods
Qualitative Methods
Depth interviews Experimentation

Focus/discussion groups Observation

Project Techniques Survey

- Word Association - Personal interview
- Sentence completion
- Telephone Surveys
Third person technique
-Mail Surveys
-

Thematic Apperception Tests (TAT)

-

Repertory Grid (Rep Grid)

- Role playing

Table 1.2 Various types of qualitative and quantitative research methods

CONSUMER BEHAVIOUR AND MARKETING MANAGEMENT

Only an
understanding of the relevant markets can help in analysing of
opportunities and then devise suitable marketing programmes accordingly. Market marketing
itself
means -

buyers, that is, it is necessary to understand the buyers around whom all the
marketing plans are formulated and implemented. In order to meet
place, the marketing managers are using various metnods to competition at the market
add
which will reach the hands of the consumers. This means in the value to the final product
environment, there is a grovwing concern or awareness among marketerseverchanging marketing
study of the buying behaviour, which will provide the basis for to go for a careful
all marketing
Broadly, buyers can be classified into two major categories: activities.
.Consumers in the household sector, who
consumption) buy goods or services for personal
Industrial buyers (who purchase goods and services
various industrial units) for carrying out activities in the
Philip Kotler has suggested
the Feed' to probe and nnd answers to
to understand buyer behaviour. These are: four basic questions
What (products or services) do the consumers
buy?
Why do they buy the products or services?
What is the buyer behaviour process adopted
by them?
Who buys the various products and services?
 6 61 To
q) n dat 2.5?.
Introduction to the study of Consumer Behaviour 1

The domestic consumers

It is widely India is one of largest consumer markets in the worid
acclaimed that
the
consunmersin India show wide variations in the size and potential of the various consu
market segments. This differences can be seen in terms of the geographical difiere
urban rural consumers (their style, of living, consurnption pattern etc), age and tany
cycle, income level, education levels, linguistic and religion diversity, food habits, festivas
etc. These differences can be visible in the pattern of spending adopted by the domesti
consumers. Added to this, with the availability of products 'anywhere' and everywhere
customers have also become more demanding and choosy.
The revolution in communication technology, are forcing marketers to look beyond time
tested concepts such as brand loyalty and mass marketing. Marketers are trying to determine
factors which influence
the underlying needs andnmotivesof consumers as well as the various
the formation of these needs and the satisfaction of these. Simuitaneously, marketersare
also trying to understand the 'learning process adopted by consumers and buyers. The
learning process can also be linked to othercognitive structures such as (values) attitudes
and beliefs. Buying behaviour is also influenced by other psychological concepts such as
perception, motivation, and personality. Knowing the impact of these concepts on buying
behaviour will help marketers in the generation of new product ideas and adopt
customisation for - the core product, some additional features and by offering of additional
services, all done with the intention to add to customer delight.

Identify Through Proper

Customer distribution and
customer advertising wants
needs & communication sales

Results in Customer's | Offer

Induce
Customer experience individualised
customer
value and with the products &
tria
delight product brands

Fig.1.7: Marketers trying to create the customer value chain

Firms have realised it sole dependence on the traditional demographic factors or past
purchase behaviour or consumption pattern cannot be indicative of the present day consumer
buying behaviour. That is why as shown in the figure 1.7 above, most of the marketers in
order to adapt to the new marketing paradigm shift in consumer tastes and preferences are
going for a fundamental shift in their market research techniques, product development
advertising and promotional strategies. Added to this, in this age of information explosion,
and internet marketing becoming a reality, it is all the more necessary that they (marketers)
go for the creation of appropriate data base which can help them to go for 'tailor made
products to suit individual tastes, preferences and buying behaviour.
The industrial or organisational markets consist of buyers who buy goods and services
needed in the process.of furthering theirindustrial and institutional activities. The behavioural
differences between the domestic consumers and industrial buyers can be done on the basis
of the ultimate objective Sought by them. While the domestic consumers seek need
satisfaction and value added oy the purcndse or tne product, the industrial buyers seek profit
or measurement of improved operational efficiency. The latter's behaviour, thus, will be