Advanced Consumer Behavior

Chapter One: Introduction to

Consumer Behavior
 Chapter 1 Overview

1. Defining Consumer Behavior

2. The nexus between consumer behavior and other
disciplines
3. New trends in Consumer Behavior
4. Marketing Implication of Consumer Behavior
 1. Defining Consumer Behavior
 “The behavior that consumers display in searching for,
purchasing, using, evaluating and disposing of products
and services that they expect will satisfy their needs.”
(Schiffman and Kanuk, 1997)
 Thus it refers to the buying behavior of final consumers
(individuals & households) who buy goods and services
for personal consumption.

Through Consumer Behavior one try to identify:

 “How do consumers respond to marketing efforts the
company might use?”
 Defining Consumer Behavior (Contd.)
 The dynamic interaction of cognition, behavior and
environmental events by which human beings conduct
the exchange aspects of their lives. (American
Marketing Association)
 “Consumer behavior refers to the actions and decision
processes of people who purchase goods and services
for personal consumption.” (Engel, Blackwell and
Miniard, 1990).
 Consumer behavior is the study of how individuals,
groups, and organizations select, buy, use, and dispose
of goods, services, ideas, or experiences to satisfy their
needs and wants (Solomon,, 2011).
 Defining Consumer Behavior (Contd.)
Components of Customer Behavior
Stimuli
 Any materials used in a market research study with the aim of inducing a
reaction from respondents.
Cognition
 This includes knowledge, information processing and thinking.
 It also includes the mental processes involved in processing of information,
thinking and interpretation of stimuli.
Affect: This is the feelings part.
 It includes the favorable or unfavorable feelings and corresponding emotions
towards stimuli.
 These vary in direction, intensity and persistence.
Behavior: This is the visible part.
 In our case, this could be the purchase activity.
 To buy or not to buy.
 There is reciprocal interaction between each of the three towards each other
and with the environment.
 Defining Consumer Behavior (Contd.)

 “The decision process and physical activity

engaged in when evaluating, acquiring, using or
disposing of goods and services”. (Loudon and
Bitta, 1980)
 The study of consumers as they exchange
something of value for a product or service that
satisfies their needs”. (Wells and Prensky, 1996)
 Process of Consumer Behaviour

Disposal /
Desire •Acquisition Use /consume
• Divestment
•Search •Set-up
•Problem •Shopping •Preparation •Discarding
recognition •Selection •Customization •Re-using
•Need arousal •Decision •Consumption •Recycling
•Deprivation making & •Enjoyment •Reselling
•Wants Choice •Sharing •Donating
•Purchase •Storage •Storing away
•Wishes &
•Shipment / •Maintenance •Replacement
Aspirations
Transportation •Satisfaction •Hoarding
•Interests •Possession •Consumption
•Tastes •Gift
•Rental / Leasing •Collection withdrawal
•Borrowing •Mental
•Stealing consumption
2. The nexus between consumer behavior and other
disciplines
 Consumer behavior is comparatively a relatively new field of
study without a history or research of its own.
 It is in fact a subset of human behavior and it is often difficult to
draw a distinct line between consumer-related behavior and
other aspects of human behavior.
 The discipline of consumer behavior has borrowed heavily from
concepts developed in other disciplines of study such as
psychology, sociology, social psychology, cultural
anthropology and economics.
 Many different perspectives shape the field of consumer
behavior.
 You can find people with training in a wide range of disciplines—
from psychophysiology to literature—doing consumer research.
 Universities, manufacturers, museums, advertising agencies, and
governments employ consumer researchers.
The nexus between consumer behavior and other
disciplines (Contd.)

Book: Consumer Behavior: Buying, Having, and Being, Global Edition. Michael R. Solomon
 The nexus between consumer behavior and other
disciplines (Contd.)

 Figure in the previous slide provides a glimpse of some

of the disciplines that work in the field.
 They can be characterize them in terms of their focus
on micro- versus macro-consumer behavior topics.
 The fields closer to the top of the pyramid concentrate
on the individual consumer (micro issues).
 While those toward the base are more interested in
the collective activities that occur among larger groups
of people, such as consumption patterns members of a
culture or subculture share (macro issues).
 The nexus between consumer behavior and other disciplines (Contd.)

Book: Consumer Behavior: Buying, Having, and Being, Global Edition. Michael R. Solomon
 Evolution of Consumer Behavior
The discipline finds its roots in the “marketing
concept” and has been essentially interdisciplinary
in nature.
As a subject it emerged as a separate field of
study in the 1960s.
Initially the focus lay in the marketers’ attempts
to study the causes of consumer behavior.
 Evolution of Consumer Behavior

Consumers’ Increasing Influence

Wholesaler Manufacturer Retailer Consumer

Manufacturing Selling Marketing Consumer

Orientation Orientation Orientation Orientation

U.S. 1750-1850 1850-WWII 1970-2000 2000+

Europe 1750-1850 1760-WWII 1970-2000 2000+

 3. New trends in Consumer Behavior

Some Emerging Trends Concerning Consumer Behavior

Increased Demand For Transparency
There is an increasing customer demand around transparency.
Big corporations have neglected the trust of the customer for a
long time. That's the reason why the customers of today require
transparency on the supply chain, ingredients, processes and so
on.
Accelerated Online Buying
Customers will accelerate buying online and using home delivery.
This was already happening, but the pandemic revealed to
skeptics that it’s easy. All businesses will need to have an online
strategy or they’re going to get beaten by their competitors.

Source:[Link]
behavior-trends-emerging-this-year/?sh=5de7a61e14d9
 New trends in Consumer Behavior (Contd.)
A Shift In Omnipresent Communication
As organizations move online and remotely, creating a cohesive
brand experience is not only desired but also expected. Customers
are looking for an experience that meets them where they are,
when it's convenient. Artificial Intelligence (AI) and robust customer
service will lead the charge across all platforms.
A Greater Human Element In Client Interactions
Customers will expect a greater “human” element in their
interactions. Virtual meetings and the absence of gatherings has
people eager for real-time, meaningful conversations. To a Zoom-
fatigued population, a phone call can seem more personal and
relaxed.
 New trends in Consumer Behavior (Contd.)

Increased Demand For Anonymity

Customers will demand more anonymity. Given continued data
breaches combined with recent politicization of electronic and
social media footprints of private citizens, a new trend will emerge
where assurances of security will no longer suffice.
Consumers Looking For Social Experiences
Beyond making purchases, consumers are going to want an
experience and to socialize. The demand for interaction with
others will never be higher and there will be an opportunity for
brands to capitalize on this consumer behavior that we hope to
see in the near future.
 New trends in Consumer Behavior (Contd.)

Increased Focus On Green Products

Clean energy has already been a trend because we've evidently
seen the damage we have brought to the planet. As consumers
demand more green products, suppliers will produce more,
pushing the demand further. Demand for electric vehicles, solar
panels and vegan meat will be higher than ever, and more and
more companies will pivot toward this.
Increased Value-Based Spending
Increased value-based spending (e.g., purchasing locally and
buying from brands that align with personal values) is a trend to
watch. Before buying from your brand, customers will continue
wanting to see brands be a leader for change within different
industries and communities and take action on the social issues
they care about
 4. Marketing Implication of Consumer Behavior

The subject of Consumer Behavior is viewed as the

construction of the marketing concept, an important
orientation in marketing management.
The knowledge of Consumer Behavior helps the marketer
understand and predict the consumption patterns and
consumption behaviors of people.
It helps them gain insights as to why a consumer behaves
differently to another consumer.
 Additionally why a consumer behaves differently in
different times and buying situations.
 To ascertain different internal (individual determinants)
and external (environmental factors) forces that impel
people to act out different consumption patterns and
behaviors.
 Marketing Implication of Consumer Behavior (Contd.)

The subject of Consumer Behavior helps the

marketer in:
A. Analyzing market opportunity: Consumer behaviour study
helps in identifying the unfulfilled needs and wants of
consumers. This requires examining the trends and conditions
operating in the marketplace, consumers’ lifestyles, income levels
and emerging influences.
B. Selecting target market: A review of market opportunities
often helps in identifying distinct consumer segments with very
distinct and unique wants and needs. Identifying these groups,
learning how they behave and how they make purchase decisions
enables the marketer to design and market products or services
particularly suited to their wants and needs.
 Marketing Implication of Consumer Behavior (Contd.)

C. Marketing-mix decisions: Once unsatisfied needs and wants

are identified, the marketer has to determine the right mix of
product, price, distribution and promotion. Here too, consumer
behaviour study is very helpful in finding answers to many
perplexing questions.
D. Use in social and non-profits marketing: Consumer
behaviour studies are useful to design marketing strategies by
social, governmental and not-for-profit organisations to make
their programmes such as family planning, awareness about
AIDS, crime against women, safe driving, environmental
concerns and others more effective.
 Marketing Implication of Consumer Behavior (Contd.)

Marketing strategies need to be aware of such factors when

developing their marketing mix
Marketing Implication of Consumer Behavior (Contd.)
 Why Study Consumer Behavior?

Consumer Behavior Determines the Economic

Health of a Nation
Consumer Behavior Determines the Success
of Marketing Programs
Consumer Behavior Determines the Economic
Health of Everyone
Consumer Behavior Helps to Formulate Public
Policy
 Scope of Consumer Behavior

The study of consumer behavior deals with

understanding consumption patterns and behavior. It
includes within its ambit the answers to the following: -
a.‘What’ the consumers buy: goods and services
b.‘Why’ they buy it: need and want
c.‘When’ do they buy it: time: day, week, month, year,
occasions etc.
d.‘Where’ they buy it: place
e.‘How often they buy’ it: time interval
f.‘How often they use’ it: frequency of use
Thank You