Introduction to the study of Consumer Behaviour

Unit One
 Unit 1: (4 Hours)
• Introduction to the study of Consumer Behaviour:
• Meaning & Definition of Consumer Behaviour,
• Difference between Consumer & Customer,
• Nature & characteristics of Indian Consumers,
• Consumerism: meaning, Consumer Movement in India, Rights &
Responsibilities of consumers in India, Benefits of consumerism.
• Research on Consumer Behaviour, Consumer Behaviour and Society.
 Unit One: Meaning and Definition of Consumer Behaviour

Consumer Behaviour is the study of how individual

customers, groups or organizations select, buy, use,
and dispose ideas, goods, and services to satisfy
their needs and wants.

It refers to the actions of the consumers in the

marketplace and the underlying motives for those
actions.
 Unit One: Meaning and Definition of Consumer Behaviour

The study of consumer Behaviour assumes that the

consumers are actors in the marketplace.
The per­spective of role theory assumes that
consumers play various roles in the marketplace.
Starting from the information provider, from the
user to the payer and to the disposer, consumers
play these roles in the decision process.
 Unit One: Meaning and Definition of Consumer Behaviour

The roles also vary in different consumption

situations;
For E.g., a mother plays the role of an
influencer in a child’s purchase process,
whereas she plays the role of a disposer for the
products consumed by the family.
 Unit One: Meaning and Definition of Consumer Behaviour

Some selected definitions of consumer Behaviour are as

follows:
1. According to Engel, Blackwell, and Mansard, ‘consumer
Behaviour is the actions and decision processes of people
who purchase goods and services for personal consumption’.

2. According to Louden and Bitta, ‘Consumer Behaviour is the

decision process and physical activity, which individuals engage
in when evaluating, acquiring, using or disposing of goods and
services.
 Unit One: Meaning and Definition of Consumer Behaviour

Consumer Behaviour is the study of how individual

make decisions to spend available resources
( time, money, effort).
It includes the study of :
What they buy?
Why they buy it?
when they buy it?
where they buy it?
how often they buy it?
how often they use it ?
Class Discussion
Difference between Consumer/Customer

•The consumer is the one who consumes

the goods, i.e. the user of the goods. It is
commonly misconstrued with the term
customer, which refers to a person who
buys the goods or commodity and pays
the price for it.
 Difference between Consumer/Customer
BASIS FOR COMPARISON CUSTOMER CONSUMER

Meaning The purchaser of goods or The end user of goods or

services is known as the services is known as a
Customer. Consumer.
Resell A customer can be a business No
entity, who can purchase it for
the purpose of resale.
Purchase of goods Yes Not necessary
Purpose Resale or Consumption Consumption

Price of product or Paid by the customer May not be paid by the

service consumer
Person Individual or Organization Individual, Family or Group of
people
Nature & Characteristic of
Indian Consumer
 Characteristics of consumer India

A Shift From Need Based To Want

Based Consumer……..
India's Transformation from a need based to want based market
 Characteristics of consumer India
• Things are changing : 
 Attitude shift towards consumerism
 Age structure of population
 Disposable income
 Education level
 Gender bias

From Traditional to Modernized traditional…

 Characteristics of consumer India
• Indian consumer is getting more materialistic: 
Indian consumer is getting more materialistic Almost 50% of
Indian urban population had adopted work hard and get rich policy
by 1996 and another 9% had done so by 2006 Gallop Survey:
Indians are more motivated than ever by
personal ambition and a desire for
material success with an average
work-week of 50 hours. India is
the hardest working nation globally.
Characteristics of consumer India
• Expected Utility from Products/ Services : 

From functional to lifestyle

 Characteristics of consumer India
• Consumerism: A way of life : 
• A way of life Indian desire to set money aside for electronics
and durables.
Now attitude increasing
• Travel and entertainment
• Trend applicable to 15 to 55 age group
• All pervasive-urban and rural .
• 1600% growth in usage of mobile phones….
• Advt of designer jewelry, LCD, watches…..
• BPO - first time market entrants
• Comfort with borrowing fund for future consumption : 
• Being in debt is no more a discomfort
• EMI is legitimizing borrowing,
• making indebtness more acceptable.
• 60% salaries in EMI
• makes a lot of sense in borrowing
 Characteristics of consumer India
Foreign is passé ;India is paramount : 
• Made in India has got more credibility
• Faith in domestic companies have grown up
• Consumer wants products that are made for Indian
needs
Characteristics of consumer India
• Eating habits : 
Eating habits From traditional meals to Indianized.
 Characteristics of consumer India
•The rise of Women :  

• I can and I will!!

• Influencing to Decisive role in buying decision
• More eating out , more phone calls
• Women are changing and reorganizing their
household chores
• Onion paste, ginger paste, etc…
• Ready to eat food
Characteristics of consumer India
•Comfort level with Technology : 
InfoTech awareness
InfoTech driven employment opportunities
Mushrooming of call centers
Washing machines with fuzzy logic….and
much more
CONSUMERS MOVEMENT IN INDIA,
RIGHTS AND RESPONSIBILITES,
AND LEGISLATIONS
 Who is consumer
 Buys goods and services
 To be consumed by himself or
 By someone else on behalf of the buyers
 What is consumerism?
 Self effort on the part of the consumer for safeguarding
themselves is known as “consumerism”.

 Consumerism refers to
a movement by consumer or by consumer association
To ensure fair and honest (ethical) practices on the part
of Manufactures, traders, dealers, services providers in
relation to consumer.
 Ministry Of Consumer Affairs, Foods And
Public Distribution

Hon’ble Minister
Shri Piyush Goyal Hon’ble MoS Hon’ble MoS
Sadhvi Niranjan Jyoti Shri Ashwini Kumar Choubey
 Ministry of
consumer
Affairs

Department Department
of consumer of food and
affairs PDS
 NATIONAL CONSUMER DAY
 24th of December is celebrated as
National Consumer Day commemorating
the coming into effect of the Consumer
Protection Act, 1986.
 WHY CONSUMERISM?
• Empower consumers to have access to the basic needs of
life.
• Protect consumers from hazards to their life and safety
• Enhance the access of consumers to adequate information to
enable them to make informed and environmentally benign
choices according to individual as well as societal needs.
• Promote consumer education through formal as well as non-
formal education systems so as to help consumers in their
decision making.
• Promote accountability and transparency through adoption of
Citizens’ Agreements.
• Promote an independent consumer movement in the country by
providing assistance to consumer and other relevant groups to
form their organisations and giving them the opportunity to
present their views in the decision-making process.
• Initiate and implement appropriate mechanisms for exchange of
information on measures of consumer protection, nationally,
regionally and internationally. 
 Six rights of consumers
 Right to Safety
1. Means right to be protected against the marketing of goods
and services, which are hazardous to life and property. The
purchased goods and services availed of should not only
meet their immediate needs, but also fulfill long term
interests.
2. Before purchasing, consumers should insist on the quality
of the products as well as on the guarantee of the products
and services.
  Right to be Informed
1. Means right to be informed about the quality, quantity,
potency, purity, standard and price of goods so as to protect
the consumer against unfair trade practices.
2. Consumer should insist on getting all the information about
the product or service before making a choice or a decision.
This will enable him to act wisely and responsibly and also
enable him to desist from falling prey to high pressure selling
techniques.
  Right to Choose

 Means right to be assured, wherever possible of access to variety of goods

and services at competitive price.

 It means right to be assured of satisfactory quality and service at a fair price.

 It also includes right to basic goods and services. This is because unrestricted
right of the minority to choose can mean a denial for the majority of its fair
share.

 This right can be better exercised in a competitive market where a variety of

goods are available at competitive prices
  Right to be heard
 Means that consumer's interests will receive due consideration at
appropriate forums.
 It also includes right to be represented in various forums formed
to consider the consumer's welfare.
 The Consumers should form non-political and non-commercial
consumer organizations which can be given representation in
various committees formed by the Government and other bodies
in matters relating to consumers.
  Right to Seek redressal
 Means right to seek redressal against unfair trade practices or unscrupulous
exploitation of consumers.

 It also includes right to fair settlement of the genuine grievances of the

consumer.

 Consumers must make complaint for their genuine grievances.

 Many a times their complaint may be of small value but its impact on the
society as a whole may be very large.

 They can also take the help of consumer organisations in seeking redressal
of their grievances.
 Right to Consumer Education

 Means the right to acquire the knowledge and skill to be

an informed consumer throughout life.

 Ignorance of consumers, particularly of rural consumers, is

mainly responsible for their exploitation.

 They should know their rights and must exercise them.

Only then real consumer protection can be achieved with
success.
 CONSUMER DUTIES
• Insist on receipts or bill without fail, on all the purchases
made.
• Read information carefully on the packets before purchase.
• Do not feel tempted on misleading advertisements.
• Buy standardized products only i.e. of ISI. AGMARK BRANDS
• File consumer complaints against default in goods deficiency
in services, or unfair trade practice.
CONSUMER RESPONSIBILITIES

• Responsibility of self help.

• Proof of transactions.
• Proper claim.
• Proper use of product/ services.
Responsibility of self help
• It is always desirable that the consumer should not depend on
the seller for information and choice as far as possible .
Proof of transactions.
• The proof of purchase and documents related to purchase of
durable goods should be invariable obtained and preserved.
Proper claim

• Consumers are expected to bear in mind

that while making complaints and claiming
compensation for loss or injury they should
not make unreasonably large claims
Proper use of Products/ Services

• Some consumers, especially during the guarantee

period,
• make rough use of the product, thinking that it will be
replaced during the guarantee period.
• This is not fair on their part. They should always use
the products properly.
NATIONAL CONSUMER DISPUTES REDRESSAL
COMMISSION

President of NCDRC Rajesh kumar Agrawal

• Benefits of Consumerism
• Consumer Education
• Consumer Groups can liaison between
Government & Industry
• Product Research & Information to
Consumer
• Inculcate Honesty, Responsiveness &
Responsibility on to Manufacturers &
Marketers.
• Move towards Societal Concept of
Marketing
 Research on Consumer
• What is Consumer Research?

Consumer research is a part of market

research in which inclination, motivation and
purchase behavior of the targeted customers are
identified.

Consumer research helps businesses or

organizations understand customer psychology
and create detailed purchasing behavior profiles.
Consumer market research is based on two
types of research method:
• 1. Qualitative Consumer Research
• Qualitative research is descriptive in nature, It’s a method that
uses open-ended questions, to gain meaningful insights from
respondents and heavily relies on the following market research
methods:
• Focus Groups: 
• One-to-one Interview: 
• Content/ Text Analysis: 
Consumer market research is based on two
types of research method:
• 2.Quantitative Consumer Research
• Quantitative research is all about numbers and statistics. An evolved consumer
who purchases regularly can vouch for how customer-centric businesses have
become today. It’s all about customer satisfaction, to gain loyal customers.
With just one questions companies are able to collect data, that has the power
to make or break a company. Net Promoter Score question, “On a scale from 0-
10 how likely are you to recommend our brand to your family or friends?”
• Online surveys, questionnaires, and polls are the preferred data collection
tools. Data that is obtained from consumers is then statistically,
mathematically and numerically evaluated to understand consumer
preference.
Consumer Research Process
Importance of Consumer Research
• Launching a product or offering new services can be quite an exciting
time for a brand. However, there are a lot of aspects that need to be
taken into consideration while a band has something new to offer to
consumers.
• Here is where consumer research plays a pivotal role. The importance
of consumer research cannot be emphasized more. Following points
summarizes the importance of consumer research:
• To understand market readiness: 
• Identify target consumers:
• Product/Service updates through feedback: 
 Consumer Behaviour and Society
• Roles of a Consumer in a Society

Consumers, along with businesses, are the driving force of the

economy. When they spend, businesses reap the profit and
consumers get a quality product or service that will in some
way enhance their lives.

Consumers play an important role in society from the methods

they use to research and review products to their decisions
on which brands to use and where to make purchases.
 Roles of a Consumer in a Society
• As a Initiator
Consumers determine the products and
services they need, whether they are shopping
for themselves, friends, family members or
business clients.
The media help to persuade, inform and remind
them about products and services that are
available for consumption.
Once a consumer becomes interested in a
product or service, regardless of the brand
name associated with it, he begins to gather
information to determine if making the purchase
is a reasonable, wise-buying decision.
 Roles of a Consumer in a Society
• As a Influencer
Consumers undoubtedly look to family, friends and
colleagues for opinions when they're making a purchase.
A referral for a business or a personal experience with a
product holds more weight with a consumer than a well-
orchestra print advertisement or commercial.
In fact, Business Wire reports that women often look to blogs
and social networks to research products before they make a
decision to buy.
Companies offer customers an opportunity to review their
services and products online, and consumers use this
information to gauge quality, service, features, benefits and
pricing.
 Roles of a Consumer in a Society
• As a Decider
• Children, for example, may initiate the idea of a
purchase by mentioning a new cereal to a
parent.
• The parent decides whether or not to make the
purchase after researching the cereal to
determine its price, its availability and how
healthy it is.
• Consumers who assume the role of a decider
have the financial authority to decide whether a
good or service can be purchased.
 Roles of a Consumer in a Society
• As a Buyer

• Consumers purchase products and services with

their money, a spouse's money, or by using a
company credit card.

• Whether they visit a store in person, make a

purchase online or place an order over the phone,
the buyer gives a payment and receives a good or
service in exchange.
 Roles of a Consumer in a Society
• As a User

• Consumers typically use the products they buy,

unless they make the purchase for a family
member, friend or colleague.

• Regardless of who makes the purchase, the user

is the person who ultimately consumes the good
or service that's purchased by the buyer.