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Name : - Singh Rahul Rajendra Pushpa Roll no : - 80 Subject : - Marketing and Human Resource Management Consumer Behaviour Introduction All of us are consumers. We consume things of daily use; we also consume and buy these products according to our needs, preferences and buying power. These can be consumable goods, durable goods, specialty goods or, industrial goods. What we buy, how we buy, where and when we buy, in how much quantity we buy depends on our perception, self concept, social and cultural background and our age and family cycle, our attitudes, beliefs values, motivation, personality, social class and many other factors that are both internal and external to us. While

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Page 1: Consumer Bhaviour Mhrm Project 123

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

Management

Consumer Behaviour

Introduction

All of us are consumers. We consume things of daily

use; we also consume and buy these products

according to our needs, preferences and buying

power. These can be consumable goods, durable

goods, specialty goods or, industrial goods. What we

buy, how we buy, where and when we buy, in how

much quantity we buy depends on our perception,

self concept, social and cultural background and our

age and family cycle, our attitudes, beliefs values,

motivation, personality, social class and many other

factors that are both internal and external to us.

While buying, we also consider whether to buy or not

to buy and, from which source or seller to buy. In

some societies, there is a lot of affluence and, these

societies can afford to buy in greater quantities and at

shorter intervals. In poor societies, the consumer can

barely meet his barest needs. The marketer therefore

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tries to understand the needs of different consumers

and having understood his different behaviours, which

require an in-depth study of their internal and

external environment, they formulate their plans for

marketing.

Management is the youngest of sciences and oldest of

arts and consumer behaviour in management is a

very young discipline. Various scholars and

academicians concentrated on it at a much later

stage. It was during the 1950s, that marketing

concept developed, and thus the need to study the

behaviour of consumers was recognized. Marketing

starts with the needs of the customer and ends with

his satisfaction. When everything revolves round the

customer, then the study of consumer behaviour

becomes a necessity. It starts with the buying of

goods. Goods can be bought individually, or in

groups. Goods can be bought under stress (to satisfy

an immediate need), for comfort and luxury in small

quantities or in bulk. For all this, exchange is

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Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

Management

required. This exchange is usually between the seller

and the buyer. It can also be between consumers.

Consumer behaviour can be defined as the decision-

making process and physical activity involved in

acquiring, evaluating, using and disposing of goods

and services. This definition clearly brings out that it

is not just the buying of goods/services that receives

attention in consumer behaviour but the process

starts much before the goods have been acquired or

bought. A process of buying starts in the minds of the

consumer, which leads to the finding of alternatives

between products that can be acquired with their

relative advantages and disadvantages. This leads to

internal and external research. Then follows a process

of decision-making for purchase and using the goods,

and then the post purchase behaviour which is also

very important, because it gives a clue to the

marketers whether his product has been a success or

not.

Page 4: Consumer Bhaviour Mhrm Project 123

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

Management

Meaning / Concept of Consumer

Behaviour:-

The term consumer behaviour is defined as the

behaviour that consumer display in searching for

purchasing, using, evaluating and disposing of

product and services that they expect will satisfy their

needs. Consumer behaviour focuses on how

individuals make decisions to spend their available

resources (time, money, effort) on consumption

related items. This includes 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, how they evaluate

it after the purchase and the impact of such

evaluation on future, and how they dispose of it.

In another words, consumer behaviour can be

define as the behaviour of individuals in regards to

acquiring, using, and disposing of products, services,

ideas or experiences. Consumer behaviour also

includes the acquisition and use of information. Thus,

communication with consumers and receiving

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Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

Management

feedback for them is a crucial part of consumer

behaviour, which is of great interest to marketers.

Definition of Consumer Behaviour:-

We define consumer behaviour as the mental and

physical activities undertaken by consumers to

acquire and consumer products to fulfill their needs

and wants. Our definition of consumer behaviour has

several elements worth noting. Let us discuss these

one by one.

Mental and Physical Activities

First, consumer behaviour includes both mental and

physical activities. Mental activities are acts of the

mind, and they relate to what we think, feel, and

know about products. Physical activities are, in

contrast, acts of the human body, and they relate to

what we physically do to acquire and consume

products.

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Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

Management

Features/Nature of consumer

behaviour:-

(1) Consumer behaviour involves individual aspect as

well as social aspect. It is generally a purposive,

decision-making process.

(2) It is reflected through satisfaction or

dissatisfaction on the part of consumers after

actual purchase of product.

(3) Consumer behaviour is the result of interaction of

consumer with the environmental forces. The

buyer behaviour is influenced by the buyer’s

environment.

(4) Consumer behaviour is the net result of various

external/environmental factors. Such factors are

mainly social and psychological in character.

(5) Consumer behaviour includes behaviour of

consumers/buyers of consumer goods, consumer

durables and industrial products. Organizational

buying behaviour also comes within the scope of

consumer behaviour.

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(6) Consumer behaviour is always uncertain as the

thinking process in human mind is uncertain.

(7) Consumer behaviour gives answer to various

questions such as why, what and how consumers

purchase goods and services.

(8) Study of consumer behaviour is a must in the

case of marketing of goods and services as such

study brings success to marketing efforts.

(9) Consumer buying behaviour is a challenge and an

opportunity to a market. Large-scale marketing is

possible only when consumer behaviour is

anticipated accurately.

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Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

Management

Factors Affecting Consumer Behaviour:-

Consumer behaviour refers to the selection,

purchase and consumption of goods and services for

the satisfaction of their wants. There are different

processes involved in the consumer behaviour.

Initially the consumer tries to find what commodities

he would like to consume, then he selects only those

commodities that promise greater utility. After

selecting the commodities, the consumer makes an

estimate of the available money, which he can spend.

Lastly, the consumer analyzes the prevailing prices of

commodities and takes the decision about the

commodities he should consume. Meanwhile, there

are various other factors influencing the purchases of

consumer such as social, cultural, personal and

psychological. The explanation of these factors is

given below.

1. Cultural Factors

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Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

Management

Consumer behaviour is deeply influenced by cultural

factors such as buyer culture, subculture, and social

class.

a. Culture

Basically, culture is the part of every society and is

the important cause of person wants and behaviour.

The influence of culture on buying behaviour varies

from country to country therefore; marketers have to

be very careful in analyzing the culture of different

groups, regions or even countries.

b. Subculture

Each culture contains different subcultures such as

religions, nationalities, geographic regions, racial

groups etc. Marketers can use these groups by

segmenting the market into various small portions.

For example, marketers can design products

according to the needs of a particular geographic

group.

Page 10: Consumer Bhaviour Mhrm Project 123

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

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c. Social Class

Every society possesses some form of social class,

which is important to the marketers because the

buying behaviour of people in a given social class is

similar. In this way, marketing activities could be

tailored according to different social classes. Here we

should note that social class is not only determined

by income but there are various other factors as well

such as wealth, education, occupation etc.

2. Social Factors

Social factors also impact the buying behaviour of

consumers. The important social factors are reference

groups, family, role and status.

a. Reference Groups

Reference groups have potential in forming a person

attitude or behaviour. The impact of reference groups

varies across products and brands. For example if the

product is visible such as dress, shoes, car etc then

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Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

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the influence of reference groups will be high.

Reference groups also include opinion leader (a

person who influences other because of his special

skill, knowledge or other characteristics).

b. Family

Buyer behaviour is strongly influenced by the

member of a family. Therefore, marketers are trying

to find the roles and influence of the husband, wife

and children. If the buying decision of a particular

product is influenced by wife then the marketers will

try to target the women in their advertisement. Here

we should note that buying roles change with change

in consumer lifestyles.

c. Roles and Status

Each person possesses different roles and status in

the society depending upon the groups, clubs, family,

organization etc. to which he belongs. For example, a

woman is working in an organization as finance

manager. Now she is playing two roles, one of finance

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manager and other of mother. Therefore, her buying

decisions will be influenced by her role and status.

3. Personal Factors

Personal factors can also affect the consumer

behaviour. Some of the important personal factors

that influence the buying behaviour are lifestyle,

economic situation, occupation, age, personality and

self-concept.

a. Age and life cycle

Age and life cycle have potential impact on the

consumer buying behaviour. It is obvious that the

consumers change the purchase of goods and

services with the passage of time. Family life cycle

consists of different stages such young singles,

married couples, unmarried couples etc, which help

marketers to develop appropriate products for each

stage.

b. Occupation

Page 13: Consumer Bhaviour Mhrm Project 123

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

Management

The occupation of a person has significant impact on

his buying behaviour. For example, a marketing

manager of an organization will try to purchase

business suits, whereas a low-level worker in the

same organization will purchase rugged work clothes.

c. Economic Situation

Consumer economic situation has great influence on

his buying behaviour. If the income and savings of a

customer is high then he will purchase more

expensive products. On the other hand, a person with

low income and savings will purchase inexpensive

products.

d. Lifestyle

Lifestyle of customers is another import factor

affecting the consumer buying behaviour. Lifestyle

refers to the way a person lives in a society and is

expressed by the things in his/her surroundings. It is

determined by customer interests, opinions, activities

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etc and shapes his whole pattern of acting and

interacting in the world.

e. Personality and self concept

Personality changes from person to person, time to

time and place to place. Therefore, it can greatly

influence the buying behaviour of customers.

Actually, Personality is not what one wears; rather it

is the totality of behaviour of a man in different

circumstances. It has different characteristics such as

dominance, aggressiveness, self-confidence etc which

can be useful to determine the consumer behaviour

for particular product or service.

4. Psychological Factors

There are four important psychological factors

affecting the consumer buying behaviour. These are

perception, motivation, learning, beliefs and

attitudes.

a. Motivation

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Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

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The level of motivation also affects the buying

behaviour of customers. Every person has different

needs such as physiological needs, biological needs,

social needs etc. The nature of the needs is that,

some of them are most pressing while others are

least pressing. Therefore, a need becomes a motive

when it is more pressing to direct the person to seek

satisfaction.

b. Perception

Selecting, organizing and interpreting information in a

way to produce a meaningful experience of the world

is called perception. There are three different

perceptual processes, which are selective attention,

selective distortion and selective retention. In case of

selective attention, marketers try to attract the

customer attention. Whereas, in case of selective

distortion, customers try to interpret the information

in a way that will support what the customers already

believe. Similarly, in case of selective retention,

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Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

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marketers try to retain information that supports their

beliefs.

c. learning:

Learning relates to changes in individual behaviour

that are caused by information and experience e.g.,

when a consumer buys a car and is satisfied with its

performance, he will recommend this brand to others

also. Through learning people shape their beliefs and

attitudes.

d. beliefs:

Beliefs are based on knowledge, opinion, faith and

confidence. It is a descriptive thought that a person

holds about certain things. Brand image is the result

of beliefs, which eventually influences buying

behaviour.

e. attitude:

An attitude is a person’s favourable or unfavourable

evaluation of a product/service. Attitude develops

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Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

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over a period of time. It is long lasting. Attitude

influences buying behaviour of consumers e.g., a

consumer having positive attitude will spend on

luxuries because he considers it as an investment

whereas another consumer may consider it waste of

money.

The forces noted above are external force but they

influence consumer behaviour considerably. The

marketer has to consider his product and the

satisfaction it offers to consumers. In addition, he has

to see that his product is as per modern culture and

life style. The marketer has to consider the social and

cultural influences on consumers while designing his

marketing strategy.

5. Economic Factors

Economic factors such as income and purchasing

power affect buyer behaviour. A rich buyer may not

be very alert about the price and may purchase a

product with high price. A person from low-income

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Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

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group will be very sensitive/alert about the price and

may not purchase the product even with limited price

rise. The middle class buyers prefer to collect

information on price from different sources and take

appropriate buying decision. Buyer behaviour

affected due to high or low purchasing power.

Economic factors include:

a. Disposable Personal Income:

It refers to the money at the disposal of the consumer

to spend e.g., in a small family where every member

is earning the consumer will have higher disposable

personal income. As against this where only one

person is working and there are many more mouths

to be fed, disposable personal income will be low.

b. Size of Family:

A small family is a happy family. It is possible to

provide better quality life to the family members. In

case of a large sized family demands are too many

and economic means to satisfy them are highly

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restricted. The result is presence of dissatisfied

needs.

c. Propensity to consume and save:

Saving for rainy days always helps the consumer. It

does not mean he is not going to spend. He will lead

his life within his source of income but make it a point

to save. He strikes a balance between consumption

and saving.

d. Consumer credit:

Availability of credit, other things remaining the

same, improves the purchasing power of the

consumers. They can look forward to possessing

several things that ordinarily would have remained

outside their reach such as house or car.

e. Discretionary income:

It refers to availability of additional income, which

improves the economic status of a consumer. In order

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to have it, the consumer is required to put in extra

efforts. Certainly, his economic status improves.

Buyer behaviour - The decision-making

process

How do customers buy?

Research suggests that customers go through a five-

stage decision-making process in any purchase. This

is summarized

In the diagram below:

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This model is important for anyone making marketing

decisions. It forces the marketer to consider the

whole buying process rather than just the purchase

decision (when it may be too late for a business to

influence the choice!)

The model implies that customers pass through all

stages in every purchase. However, in more routine

purchases, customers often skip or reverse some of

the stages.

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For example, a student buying a favourite hamburger

would recognize the need (hunger) and go right to the

purchase decision, skipping information search and

evaluation. However, the model is very useful when it

comes to understanding any purchase that requires

some thought and deliberation.

The buying process starts with need recognition. At

this stage, the buyer recognizes a problem or need

(e.g. I am hungry, we need a new sofa, I have a

headache) or responds to a marketing stimulus (e.g.

you pass Starbucks and are attracted by the aroma of

coffee and chocolate muffins).

An “aroused” customer then needs to decide how

much information (if any) is required. If the need is

strong and there is a product or service that meets

the need close to hand, then a purchase decision is

likely to be made there and then. If not, then the

process of information search begins.

A customer can obtain information from several

sources:

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• Personal sources: family, friends, neighbors etc

• Commercial sources: advertising; salespeople;

retailers; dealers; packaging; point-of-sale displays

• Public sources: newspapers, radio, television,

consumer organizations; specialist magazines

• Experiential sources: handling, examining, using the

product

The usefulness and influence of these sources of

information will vary by product and by customer.

Research suggests that customer’s value and respect

personal sources more than commercial sources (the

influence of “word of mouth”). The challenge for the

marketing team is to identify which information

sources are most influential in their target markets.

In the evaluation stage, the customer must choose

between the alternative brands, products and

services.

How does the customer use the

information obtained?

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Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

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An important determinant of the extent of evaluation

is whether the customer feels “involved” in the

product. By involvement, we mean the degree of

perceived relevance and personal importance that

accompanies the choice.

Where a purchase is “highly involving”, the customer

is likely to carry out extensive evaluation.

High-involvement purchases include those

involving high expenditure or personal risk – for

example buying a house, a car or making

investments.

Low involvement purchases (e.g. buying a soft

drink, choosing some breakfast cereals in the

supermarket) have very simple evaluation processes.

Why should a marketer need to

understand the customer evaluation

process?

Page 25: Consumer Bhaviour Mhrm Project 123

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

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The answer lies in the kind of information that the

marketing team needs to provide customers in

different buying situations.

In high-involvement decisions, the marketer needs to

provide a good deal of information about the positive

consequences of buying. The sales force may need to

stress the important attributes of the product, the

advantages compared with the competition; and

maybe even encourage “trial” or “sampling” of the

product in the hope of securing the sale.

Post-purchase evaluation - Cognitive

Dissonance

The final stage is the post-purchase evaluation of the

decision. It is common for customers to experience

concerns after making a purchase decision. This

arises from a concept that is known as “cognitive

dissonance”. The customer, having bought a product,

may feel that an alternative would have been

preferable. In these circumstances, that customer will

Page 26: Consumer Bhaviour Mhrm Project 123

Name : - Singh Rahul Rajendra Pushpa Roll no : - 80Subject : - Marketing and Human Resource

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not repurchase immediately, but is likely to switch

brands next time.

Case study

Tata Nano: Consumers' Post-Purchase Behaviour

Abstract:

Hundred years ago, when Henry Ford unveiled ‘Model

T’ in US as the people’s car, many a company

followed suit. Incidentally, after a century, history

repeated itself when Ratan N. Tata (Ratan Tata),

chairman of Tata Sons, the promoter company of the

Tata group, announced his long-cherished dream to

produce the world’s cheapest car, Tata Nano, at an

amazing price of INR 1lakh.

Introduction:

As Tata Nano vroomed to the customers on March

23rd 2009, few questions arose: How are the

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consumers receiving it? Has the dream of Ratan Tata

come true? Set in early 2010, this case study focuses

on the post-purchase behaviour of Tata Nano buyers.

The post-purchase perceptions, dissonance levels and

moments of pride have been analysed with the help

of primary data collected through video interviews

conducted among 8 customers of Tata Nano in

Hyderabad, India, in mid-January 2010. The case

study runs in the backdrop of the conceptualization of

the Tata Nano car and the roadblocks that cropped up

during its production. This case study, primarily

positioned to discuss the dissonance levels in new

products, offers valuable insights.

Pedagogical Objectives:

To understand the conceptualization of Nano car as

the world’s cheapest car by Tata Motors and

analyse the causes and concerns in taking the car

from drawing board to board room to the shop floor

To understand the bottlenecks involved in the

production of Tata Nano and critically examine the

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influence of those bottlenecks on the buying

behaviour of the customers while purchasing Tata

Nano, as well as on the brand Tata and its impact

on the brand loyalty thereof

To raise a general debate on addressing all the

possible cognitive dissonance touch points in the

case of new products – launched by either an

existing and established company or a new

company.

Bibliography

Title Consumer Behaviour Author Atul Kr. Sharma

Publisher Global Vision Publishing Ho,

2006ISBN8182201861,

9788182201866Length183 pages Subjects

Consumer behavior

MHRM N.G. Kale, M. Ahmed

Weblography

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http://www.ehow.com/about_5162253_definition-

consumer-behavior.html#ixzz221r0k179

http://www.ehow.com/about_5162253_definition-

consumer-behavior.html

http://www.aipmm.com/html/newsletter/

archives/000434.php

http://tutor2u.net/business/marketing/

buying_decision_process.asp

http://en.wikipedia.org/wiki/

Buyer_decision_processes