Consumer Behaviour Class XI - PDF

INDIAN SCHOOL DARSAIT DEPARTMENT OF COMMERCE Marketing CLASS XI Chapter No: Consumer Behavior Resource Person: Monica Date: /01/2025 Fernandes Name and Class of Student:...

INDIAN SCHOOL DARSAIT DEPARTMENT OF COMMERCE Marketing CLASS XI Chapter No: Consumer Behavior Resource Person: Monica Date: /01/2025 Fernandes Name and Class of Student: FLASHBACK NOTES// CLASS XI // MARKETING TOPIC: CONSUMER BEHAVIOUR MEANING OF CONSUMER BEHAVIOUR Consumer behaviour is defined as the study of how individuals make decisions to spend their available resources (time, money, effort) on consumption-related items. It includes the study of ‘what they buy’, ‘why they buy’, ‘when they buy’, ‘where they buy’, ‘how often they buy it’ and ‘how often they use it." CONSTITUENTS OF CONSUMER BEHAVIOUR: Consumer behaviour encompasses two constituents, namely consumer and buyer. Consumer-"Consumer" and "Customer" the interchangeably used terms are different in meaning. The term "consumer" is used to represent a situation where a product can be consumed, and "customer" is used to deal with situation where the product is purchased and may not be directly consumed. There may be Individual consumer and Business Consumer. ISD/ Marketing /XI/2024-25 Page 1 of 11  Buyer/User The term "buyer" refers to one who buys product. But buyer might not be the user of product. For example, Manish buys a blazer for her father. Manish is the buyer but the ultimate user is his father. IMPORTANCE OF STUDYING CONSUMER BEHAVIOR: The study of consumer behaviour is very relevant for effective marketing management. It helps significantly in the formulation of production and marketing strategies in the following manner- 1. Knowledge of consumer behaviour helps to determine the marketing mix- The management keeps on exploring -what type of product consumer purchases in general; what factors persuade himto buy a good; why does he buy a specific brand from a particular shop etc. These facts give signals to producers about marketing mix to be arranged for their product and to serve consumers in better manner. ISD/ Marketing /XI/2024-25 Page 2 of 11  2.To assess consumer’s actions or reactions- The consumer seeks value for money. He wants to pay fewer prices, but expects superior features in the product. This has led many marketers to introduce quality products at prices which are affordable to the customers. 3.To meet diversified consumer preferences –With globalization customers got more availability of more choices compared to pre-1991 era. For example, the customer now has many brands of cars to choose from like Hyundai, Honda, Mercedes, BMW etc 4.A guide to planning and implementing marketing strategies - Knowledge of consumer behaviour can serve as a great help to formulate and implement marketing strategies to achieve goals of the firm. 5.To address special needs, personalities, and lifestyles of consumers- Consumer prefer differentiated products to reflect their special needs, personalities, and lifestyles. The study of consumer behaviour helps to satisfy such special needs. For example, Maggi introduced their ketchups with emphasis on "It's different" 6.To identify market segmentation. This also helps to classify market segments to market the products effectively. For example, LIC provides its insurance cover to suit the needs of different types of customers- Jeevan Suraksha (Financial security and post-retirement benefits), Asha Deep II (Medical covers) etc. ISD/ Marketing /XI/2024-25 Page 3 of 11  7.To remain updated with technological advancement and bring new products to the market at faster Pace-Studying consumer behaviour is imperative to get to know consumers’ expectations and address them quickly. Thus, identification of target market before production is essential to deliver the desired consumer satisfaction and delight by bringing product to the market at faster pace. FACTORS AFFECTING CONSUMER BUYING BEHAVIOR Most of the factors are inter-dependent and inter-related, and can be divided into four main categories Factors affecting consumer buying behaviour Cultural Social Psychological Factors Factors Factors Cultural Factors: Culture is a combination of values and beliefs, religions and customs, which influence consumer behaviour directly or indirectly. In a society, the cultural study can be made by over viewing religion, customs, language, traditional arts, work-patterns of people. Culture is prescriptive, socially shared, facilitator of communication, subjective, cumulative and dynamic. The thinking patterns are passed from generation to generation. Similarly, a sub-culture consisting of psychological, social or geographical source of consumer group indicates their unique demand-pattern in consumption-behaviour. For example, in north India, people prefer wheat- chapati as staple food whereas in the south, people prefer rice. In any society, social class of individuals and families with similar values, interests and behaviour creates almost identical demand patterns. ISD/ Marketing /XI/2024-25 Page 4 of 11  Social Factors: Social factors like family and reference groups also play significant role in determining consumer behaviour in the following manner. Social Factors Reference Roles and Age and Life Education and Economic Family Lifestyle Groups Status cycle Stages Occupation Condition (a) Family Consumer buying decisions are influenced by many social factors like the economic condition of the family, its role and status in society, and the reference group of people. People with high incomes generally purchase branded products from malls and expensive markets. On the contrary, the ordinary people, belonging to middle or lower income groups purchase products from local markets. (b) Reference Groups A reference group comprises of two or more persons realizing common goals, group values, attitudes and behaviour. Friends or other people with whom one identifies himself constitute a reference group. While making purchases, such reference groups play a vital role as recommendations are made by the group- members, who may also become a source of information. For example: Amway products, Patanjali products are promoted by organic product users. (c) Roles and Status: An individual has many roles to play in their lives; at their workplace, they have different duties as compared to the duties they are expected to fulfil at home. Roles and status help marketers to prepare their products and market them not only as per the customer's requirements, but keeping in view the status those individuals enjoy, so that the customers are targeted at the right place. ISD/ Marketing /XI/2024-25 Page 5 of 11  (d) Age and life-cycle stage This is an important determinant of the goods demanded by a consumer. If the consumer is young, he/she will demand more of trendy clothes, recreational facilities like gyms and spas, grooming products such as deodorants, cosmetics, etc. Elderly consumers will demand more of medicines, healthy-foods walking sticks, health-care facilities etc. (e) Education and Occupation The level of education and occupation of the consumer also decides his/her consumption behaviour. For example, a business executive may go for expensive business suits, electronics like laptops and smart phones, or memberships of clubs, whereas a clerk will buy simple clothes and ordinary, cheaper goods. (f) Economic conditions People in the high income bracket have higher purchasing power. They buy expensive and trendy goods. On the contrary, people in the low-income groups buy simple and relatively cheaper goods. (g) Lifestyle Lifestyles are identified by observing activities, interests, opinions, and demographics. The activities of individuals like work, hobbies, vacations, social activities and community service, shopping, sports etc. indicate a lot. People's interests can be observed from their preferences of food,fashion, recreation, media choice etc. Psychological Factors To effectively market a product, marketers need to go to a psychological level of a consumer. The study of a consumer's thinking helps to find out- How consumers think, feel, reason, react to different environments and select between different alternatives (e.g., brands, products, and retailers) Under this category, the following variables can be identified: ISD/ Marketing /XI/2024-25 Page 6 of 11  (a) Motivation A need becomes a motive when it is aroused to a sufficient level of intensity and a motive is a need that is sufficiently pressing to drive the person to act. Thus, motivation drives the consumers to develop a purchasing attitude. For example a buyer goes to a nearby restaurant and orders pizza for herself, because hunger was the motivating factor for her to purchase pizza. (b)Perception What a person thinks about a particular product or service ishis/her perception towards it. For someone a Dell Laptop might be the best laptop while for others it could be just one of the best brands available. (c)Learning Learning comes only through experience. An individual comes to know about a product and service only after he/she uses the same. An individual who is satisfied with a particular product/service will show a strong inclination towards buying the same product again. (d)Beliefs and Attitudes Individuals create a certain image of every product or service available in the market. Every brand has an image attached to it, also called its brand image. Consumers purchase products/services based on their opinions which they form towards a particular product or service. A product might be really good but if the consumer feels it is useless, he would never buy it. (e) Personality Personality is the collection of inner psychological attributes that characterize the outer behaviour an individual in terms of individual differences. Personality traits like dominance, self- confidence, sociability or adaptability of a person influence his ISD/ Marketing /XI/2024-25 Page 7 of 11  decision making up to great extent whereas an individual’s personality may change gradually but plays a vital role in his buying and consumption behaviour. ISD/ Marketing /XI/2024-25 Page 8 of 11  DIFFERENT BUYING ROLES Individuals or group of consumers play diverse roles in different kinds of purchase situations. It hasbeen observed that there are eight different roles played by people in the consumer decision process. Initiator: The initiator is a person who first gets the thought or gives the suggestion/idea of buying the particular product. A child might play the role of an initiator in the purchase process of a chocolate. Influencer: The influencer is a person who directly or indirectly has some influence on the final buying decision of others. The parents play the role of influencers in the purchase process of a chocolate. Gatekeeper: The gatekeeper is a person who permits the flow of certain information and restricts flow of some set of information. Parents play the role of a gatekeeper in the selection of movies for children. Decider: The decider is a person who finally determines part or the whole of the buying decision, i.e. all quantity like whether to buy, what to buy,how to buy, when to buy or where to buy are considered. In the event of buying baby products, the mother plays the role of the decider. Buyer: The buyer is the person who actually purchases and pays for thepurchase. In a typical family decision making process, father plays the role of the buyer who is involved in the economic transaction process. ISD/ Marketing /XI/2024-25 Page 9 of 11  User: The user is the person who actually uses or consumes the services or products. In most of the grocery product purchase, the entire family uses the product. In a typical purchase of washing machine, the housewife plays the role of user. Preparer: The preparer is the person who changes the product to usable form for consumption. For example, in a typical family consumption of food items, mother plays the role of preparer. Maintainer: Members who service or repair the product so that it will provide continued satisfaction is a maintainer. Disposer: The disposer is the person who finally disposes the package of the product. For example mother plays the role of a disposer after the product is consumed by the family. THE CONSUMER DECISION PROCESS Consumers undertake a step-by-step process while purchase a decision. The amount of time and effort they devote to a particular purchasing decision depends on the necessity of the desired good or service to the consumer. CONSUMER DECISION PROCESS STAGES 1. Problem Recognition –During the first stage of the consumer decision making process, the consumer becomes aware of the difference between the actual state (where we are now and the ideal state (‘where we want to be’). This stage motivates the individual to achieve the desired state of affairs. ISD/ Marketing /XI/2024-25 Page 10 of 11  2. Information Search – In the second stage, the consumer gathers information related to his/her fulfilment of a desired state of affairs. This search identifies alternative means of problem solution. High- involvement purchases may invite large information searches, while low- involvement purchases require little search activity. The search may include internal or external sources of information. 3. Evaluation of Alternatives-The third step in the consumer decision making process is to evaluate the evoked set of options identified during the search step. The result of the evaluation stage helps in choosing a brand or product in the evoked set or might also result in a decision to start search for additional alternatives, when all those which were identified during the initial search seem to be unsatisfactory. To complete this analysis, the consumers develop a set of evaluation criteria to guide the selection. 4. Purchase Decision and Action The search and alternative evaluation stages of the decision process result in the final purchase decision and the act of making the purchase. At this stage, the consumer has evaluated each alternative in the evoked set based on his/her personal set of evaluative criteria and lowered the alternatives down to one. Marketers can smooth the purchase decision and action by helping consumers through providing finance, delivery, and installation and so on. 5. Post-Purchase Evaluation- The purchase act might result in one of two: Satisfaction – The buyer feels satisfied at the reduction of the gap between the actual and the ideal states or might experience dissatisfaction with the purchase. Consumers are generally satisfied if purchases meet with their expectations. Dissatisfaction – Sometimes, however, consumers experience some post purchase anxieties, called cognitive dissonance. It is a thought that one has not made the right decision. The marketer can help by providing supportive information to the buyer and by positive marketing communications. The consumer buying process enables the consumers take informed decisions. Higher the extent of satisfaction, higher the possibility of repurchase. Marketers usually look to reduce dissatisfaction as a dissatisfied consumer not only shies away from a purchase but also affects others. ISD/ Marketing /XI/2024-25 Page 11 of 11