Consumer Behavior

Semester 5
Meaning and Definition: Philip Kotler
• "Consumer behavior refers to the actions and decision processes that

• Individuals,
• Groups,
• and Organizations

engage in when searching , evaluating, purchasing, using, and disposing of products and
services, in order to satisfy their needs and desires."
Need for study of consumer behaviour
1.Market Understanding: Understanding consumer behavior helps businesses
gain insights into their target markets. It allows them to identify the needs,
preferences, and behaviors of their customers, which, in turn, helps in
developing products and services that cater to those needs effectively.

2.Effective Marketing: Consumer behavior insights enable companies to create

more effective marketing strategies. By understanding how consumers make
purchasing decisions, businesses can tailor their advertising, pricing, and
promotional efforts to influence consumer choices positively.

3.Product Development: Knowing what consumers want and need is vital for
product development. By studying consumer behavior, companies can design
products and services that align with customer preferences, leading to higher
sales and customer satisfaction.
4. Competitive Advantage: A deep understanding of consumer behavior
can provide a competitive advantage. Businesses that can anticipate and
respond to changing consumer preferences more effectively than their
competitors are more likely to succeed in the market.

5.Customer Satisfaction: Satisfied customers are more likely to become

loyal customers and advocates for a brand. By understanding what drives
customer satisfaction and loyalty, companies can enhance customer
experiences and build lasting relationships.

6. Risk Mitigation: Studying consumer behavior can help identify potential

risks and challenges in the market. For example, it can alert businesses to
shifts in consumer preferences or emerging trends that may impact their
industry.
7. Innovation: Consumer insights can spark innovation by revealing unmet needs and
opportunities for new products or services. Businesses that innovate in response to
consumer behavior trends can stay ahead in the market.

8. Resource Allocation: Understanding consumer behavior allows companies to allocate

their resources more efficiently. By focusing on products, marketing channels, and
strategies that resonate with consumers, businesses can maximize their return on
investment.

9. Ethical Considerations: Understanding consumer behavior also involves considering

ethical issues related to marketing practices. It helps companies make ethical decisions and
avoid actions that could harm consumers or damage their reputation.

10. Globalization: In today's global economy, understanding consumer behavior is crucial

for businesses operating in diverse markets with varying cultural norms and preferences.
Adapting products and marketing strategies to different consumer behaviors is essential for
international success.
Buyers and Users
1.Buyers:
1. Buyers are the individuals or entities responsible for making the purchase decision and
completing the transaction.
2. They are the ones who pay for the product or service, either with their own money or on
behalf of an organization or group.
3. Buyers can include consumers (individuals buying for personal use), businesses (procurement
managers or decision-makers purchasing for their organizations), or intermediaries (such as
retailers or wholesalers who purchase products for resale).
2.Users:
1. Users are the individuals or entities who actually use or consume the product or service.
2. Users may or may not be the same as the buyers. In many cases, they are different people or
groups.
3. Users are the ones who derive value or benefit from the product or service. They interact with
and utilize the offering for its intended purpose.
Here are a few examples to illustrate the distinction between buyers
and users:

• Example 1 - Personal Computer:

• Buyer: A parent who purchases a personal computer for their child's
schoolwork.
• User: The child who uses the computer for studying and other activities.
• Example 2 - Company Software:
• Buyer: The IT manager or procurement department of a company that
purchases software for employee use.
• Users: The employees who use the software to perform their work tasks.
• Example 3 - Fast Food Meal:
• Buyer: A person who orders and pays for a fast food meal for their friend.
• User: The friend who actually eats and enjoys the meal.
Consumer research Process
• Consumer research is a systematic process that involves gathering and
analyzing information about consumers to gain insights into their
behavior, preferences, and needs. This research process is crucial for
businesses and organizations to make informed decisions and develop
effective marketing strategies. Here are the key steps in the consumer
research process:
1.Define Objectives and Research Questions:
Start by clearly defining the objectives of your consumer research. What specific information are you
seeking to gather, and what are your research questions? Be as specific as possible in outlining your
research goals.
2.Literature Review:
Before conducting new research, review existing literature, market reports, and studies related to your
topic. This helps you understand what is already known and can provide a foundation for your research.
3.Research Design:
Determine the research methodology you will use. Common research methods include surveys,
interviews, focus groups, observations, and data analysis. Select the method(s) that best align with your
research objectives and budget.
4.Sampling:
Decide on the sampling method and sample size. Sampling involves selecting a subset of the target
population that is representative of the whole. Ensure that your sample size is statistically significant to
draw meaningful conclusions.
5.Data Collection:
Implement your chosen research method to collect data from consumers. This may involve conducting
surveys, interviews, or observations, or gathering data from sources like online reviews and social media.
6.Data Analysis:
Analyze the collected data to identify patterns, trends, and insights. This can include quantitative analysis
(e.g., statistical analysis) and qualitative analysis (e.g., content analysis of open-ended responses).
7. Interpretation:
Interpret the data to draw meaningful conclusions. What do the findings mean in the context of your
research objectives? Are there actionable insights that can inform decision-making?
8. Report and Presentation:
Create a comprehensive research report that includes your research objectives, methodology,
findings, and recommendations. Present the report to relevant stakeholders within your organization.
9. Action Planning:
Based on the insights gained from the research, develop action plans and strategies to address any
identified issues or opportunities. These plans may relate to product development, marketing,
customer service, or other areas.
10. Implementation and Monitoring:
Put your action plans into practice and continuously monitor the results. Consumer research is an
ongoing process, and it's essential to track changes in consumer behavior and preferences over time.
11.Feedback :
Use feedback from ongoing monitoring and evaluation to refine your strategies and research
approach. Consumer behavior and preferences can evolve, so staying up-to-date is crucial.
12. Ethical Considerations:
Throughout the research process, ensure that ethical guidelines are followed,
Factors influencing consumer behavior
• External Factors:
1.Cultural Factors:
1. Culture: The values, beliefs, customs, and traditions of a society can significantly
influence consumer behavior. Different cultures have different preferences and norms.
2. Subculture: Within a culture, subgroups may have distinct preferences based on factors
like ethnicity, religion, or regional identity.
2.Social Factors:
1. Reference Groups: People often make purchasing decisions based on the influence of
reference groups, which can include family, friends, colleagues, or online communities.
2. Social Class: A person's social class, which is determined by factors like income,
occupation, and education, can affect their purchasing choices and brand preferences.
Internal Factors:
1.Personal Values and Beliefs:
1. A person's core values and beliefs, including ethical and environmental considerations, can
influence their buying choices.
2.Personality and Self-Concept:
1. An individual's personality traits can affect their brand preferences. For example, someone with an
adventurous personality may be more open to trying new products.
3.Perception and Learning:
1. How an individual perceives and learns about products and brands internally shapes their
preferences and behavior. This includes how they process information and form associations.
4.Motivation and Emotions:
1. Internal motivations, such as the desire for status, security, or pleasure, can drive consumer
behavior. Emotions also play a significant role in decision-making, as people often make purchases
based on emotional responses.
5.Memory and Cognitive Processes:
1. Memory plays a role in consumer behavior by affecting brand recall and recognition. Cognitive
processes like problem-solving and decision-making are also internal factors that influence buying
choices.
• Personal Factors:
• Age and Life Stage: Consumer preferences and needs change over the
course of a person's life. What appeals to a teenager may differ from
what appeals to a retiree.
• Lifestyle: A person's lifestyle, including their interests, hobbies, and
activities, can influence the products and brands they choose.
• Occupation and Economic Situation: Employment status, income, and
financial stability can impact purchasing power and buying decisions.
Question Bank
Consumer Needs:
1.Definition: Consumer needs are the basic requirements and desires that
individuals seek to fulfill through their consumption of products and
services. Needs are inherent and essential for survival and well-being.
2.Categories of Needs:
1. Physiological Needs: These are the most fundamental needs necessary for survival,
such as food, water, shelter, and clothing.
2. Safety Needs: After physiological needs are met, individuals seek safety and
security, including protection from harm, financial stability, and a stable
environment.
3. Belongingness and Love Needs: Humans have a natural need for social interaction,
love, and a sense of belonging. This includes relationships, friendship, and family.
4. Esteem Needs: Individuals have a desire for self-esteem, respect from others, and
recognition. This can be fulfilled through achievements, status, and reputation.
5. Self-Actualization Needs: At the highest level, people strive for self-actualization,
which involves realizing their full potential, personal growth, and self-fulfillment.
• Maslow's Hierarchy of Needs: Abraham Maslow's hierarchy of needs
is a well-known psychological theory that categorizes these needs into
a pyramid, with physiological needs at the base and self-actualization
at the top. The theory suggests that individuals seek to satisfy lower-
level needs before moving on to higher-level needs.
 Consumer Motivation:
1.Definition: Consumer motivation refers to the internal and external factors that drive
individuals to take specific actions, such as making a purchase, in order to satisfy their
needs or desires. Motivation serves as the energizing force that prompts behavior.
2.Types of Motivation:
1. Intrinsic Motivation: This type of motivation arises from within the individual and is driven by
personal interests, enjoyment, or the inherent satisfaction of an activity. For example, someone
may buy a musical instrument because they have a deep passion for music.
2. Extrinsic Motivation: Extrinsic motivation comes from external sources, such as rewards,
recognition, or social approval. For instance, an individual might purchase a luxury car to gain
status and admiration from others.
3. Rational Motivation: Rational motivation is based on logical reasoning and decision-making.
Consumers weigh the benefits and drawbacks of a product or service and make choices that best
align with their goals. For instance, choosing a fuel-efficient car to save money on gas.
4. Emotional Motivation: Emotional motivation is driven by feelings, desires, and emotional
responses. Consumers may make purchasing decisions based on how a product makes them feel,
such as buying a comfortable and stylish pair of shoes for the pleasure of wearing them.
Motivation Theories: Several psychological theories, including
Maslow's hierarchy of needs, drive-reduction theory, and expectancy
theory, explain how motivation influences consumer behavior. These
theories help marketers understand the underlying drivers of consumer
choices.
Personality and self concept
• Personality:
1.Definition: Personality refers to an individual's distinctive and
enduring pattern of thoughts, emotions, behaviors, and characteristics
that make them unique. It encompasses a wide range of traits and
tendencies that influence how a person interacts with their
environment, including their consumer choices.
2.Traits: Personality traits are the stable and consistent qualities that
define an individual's behavior. Common personality traits include
extraversion, introversion, openness to experience, conscientiousness,
agreeableness, and neuroticism (the Big Five personality traits).
• Impact on Consumer Behavior: Personality traits can influence
consumer preferences and choices. For example:
• Extroverted individuals may be more inclined to seek social
experiences and may be more receptive to products or services that
facilitate social interactions.
• Conscientious individuals may prioritize careful planning and research
when making purchase decisions, aiming for reliability and quality.
• People with high openness to experience may be more willing to try
new and innovative products or engage in novel experiences.
Self-Concept:

1.Definition: Self-concept, also known as self-identity or self-image, is an

individual's perception and understanding of themselves. It involves the beliefs,
values, attitudes, and self-perceptions that shape how a person sees themselves in
relation to others and their environment.
2.Components of Self-Concept:
1. Self-Image: This component pertains to how individuals view themselves in terms of their
appearance, abilities, and characteristics.
2. Self-Esteem: Self-esteem reflects an individual's overall evaluation of their self-worth and
value. High self-esteem is associated with positive self-concept.
3. Social Identity: Social identity encompasses how an individual identifies with particular
social groups, such as nationality, religion, gender, or profession.
4. Self-Consistency: Self-concept involves maintaining a sense of consistency in one's
beliefs, values, and behaviors, aligning with their self-perceived identity.
• Impact on Consumer Behavior: Self-concept can influence
consumer choices and brand preferences. People often seek products
and brands that align with their self-concept or desired self-image. For
example:
• Someone with a self-image of being environmentally conscious may
prioritize eco-friendly products and sustainable brands.
• Individuals with a self-concept of being health-conscious may opt for
health-focused foods and fitness-related products.
Consumer Perception:
• Definition: Consumer perception is the process by which individuals
select, organize, and interpret sensory information to create a meaningful
understanding of the world around them. It involves the senses, such as
sight, hearing, taste, smell, and touch.
• Factors Influencing Perception:
• Sensory Thresholds: The minimum level of stimulation required for an
individual to detect a sensory stimulus (e.g., the brightness of a light or the
loudness of a sound).
• Selective Attention: Consumers tend to focus on and pay more attention to
stimuli that are relevant to their needs, interests, or goals.
• Perceptual Organization: How people organize sensory information into
coherent and meaningful patterns, such as recognizing shapes or faces.
• Perceptual Interpretation: The process of attaching meaning to sensory
information, influenced by past experiences, expectations, and cultural factors.
• Implications for Consumer Behavior: Marketers aim to shape
consumers' perceptions through product design, packaging, branding,
advertising, and other sensory cues to make products and services
more appealing and memorable.
Consumer Learning:

• Definition: Consumer learning is the process by which individuals

acquire knowledge and information about products, services, brands,
and the marketplace. Learning can be intentional or incidental.
• Types of Learning:
• Cognitive Learning: Involves acquiring knowledge and information through
thinking, reasoning, and problem-solving. For example, a consumer learns
about product features and benefits by reading reviews and comparing options.
• Behavioral Learning: Occurs through experiences and interactions. It involves
trial-and-error learning and the formation of associations between stimuli and
responses. For instance, a consumer learns to associate a particular brand with
quality through positive experiences with that brand's products.
• Experiential Learning: Consumers learn from direct experiences, such as
using a product, visiting a store, or attending an event. These experiences can
have a strong impact on perceptions and future behaviors.
• Implications for Consumer Behavior: Marketers use various
strategies to facilitate consumer learning, such as providing clear
product information, offering demonstrations, and creating positive
consumer experiences.
Consumer Memory:
• Definition: Consumer memory refers to the process of encoding, storing,
and retrieving information related to products, brands, and purchasing
experiences. It involves both short-term and long-term memory.
• Types of Memory:
• Sensory Memory: Holds sensory information briefly and allows individuals to
retain sensory impressions, such as the visual appearance or taste of a product,
for a short time.
• Short-Term Memory (Working Memory): Holds a limited amount of
information temporarily and is used for immediate processing and decision-
making.
• Long-Term Memory: Stores information for an extended period, potentially for
a lifetime. It includes episodic memory (personal experiences) and semantic
memory (facts and knowledge).
• Implications for Consumer Behavior: Marketers aim to create
memorable and positive experiences that are likely to be encoded into
long-term memory. This can include memorable advertising,
exceptional customer service, and product-related associations.
Nature of consumer attitudes: Psychological
• 1. Motivation:
• Motivation and Attitudes: Motivation refers to the internal and external forces that
drive individuals to take specific actions, such as forming attitudes or making
purchasing decisions. Motivation plays a crucial role in shaping consumer attitudes
because it determines the extent to which individuals engage with products, brands,
or issues.
• Influence of Needs: Consumer attitudes are often influenced by underlying needs
and desires. For example, if an individual has a strong need for social approval and
belongingness, they may develop positive attitudes toward products or brands that
align with these needs.
• Emotional and Rational Motivation: Motivation can be both emotional and
rational. Emotional motivations, driven by feelings and desires, can lead to attitudes
formed based on emotional responses. Rational motivations, based on logical
reasoning and decision-making, can lead to attitudes formed through careful
evaluation of information.
2. Perception:

• Perception and Attitudes: Perception is the process by which individuals

select, organize, and interpret sensory information to create a meaningful
understanding of their environment. Consumer attitudes are influenced by
how individuals perceive products, brands, and messages.
• Selective Attention: Individuals tend to pay more attention to information
that is consistent with their existing attitudes and beliefs. This selective
attention can reinforce or strengthen existing attitudes.
• Perceptual Filters: Consumers filter incoming information through their
perceptual biases, which can affect the way they perceive and interpret
messages. For example, someone with a positive attitude toward a particular
brand may interpret product reviews more favorably.
• Perceptual Organization: The way individuals organize sensory
information can affect the formation of attitudes. For example, a well-
designed and aesthetically pleasing product package can lead to more
positive perceptions and attitudes toward the product.
3. Learning:

• Learning and Attitudes: Learning is the process by which individuals acquire

knowledge and information. Learning plays a significant role in shaping consumer
attitudes because it provides the information on which attitudes are based.
• Cognitive Learning: Consumers can acquire information about products, brands, and
issues through cognitive learning, involving thinking, reasoning, and problem-solving.
This type of learning can lead to attitude changes based on new knowledge or insights.
• Behavioral Learning: Consumers can also form attitudes through behavioral learning,
which occurs through experiences and interactions. Positive or negative experiences with
products or brands can lead to corresponding attitudes.
• Experiential Learning: Direct experiences, such as using a product or interacting with a
brand, can have a profound impact on attitudes. Experiential learning often creates lasting
impressions and attitudes that result from personal encounters.
• Advertising and Messaging: Marketers use various forms of messaging, including
advertising and promotional content, to facilitate consumer learning and shape attitudes.
Effective advertising can influence consumer attitudes by providing information,
emotional appeals, or social endorsements.
Beliefs:
1.Definition: Beliefs are cognitive components of attitudes. They represent an
individual's thoughts, ideas, and knowledge about a particular object or concept.
Beliefs can be factual or subjective, and they serve as the foundation upon which
attitudes are built.
2.Types of Beliefs:
1. Descriptive Beliefs: These beliefs pertain to factual information about a product or brand.
For example, a consumer may believe that a particular smartphone has a 5G capability,
which is a descriptive belief.
2. Informational Beliefs: These beliefs provide information about the consequences or
attributes associated with a product or brand. For instance, a consumer may believe that
using a certain skincare product will result in healthier-looking skin.
3. Evaluative Beliefs: Evaluative beliefs reflect the judgment or evaluation of an object. They
can be positive (e.g., "This brand is trustworthy") or negative (e.g., "This product is too
expensive").
4. Prescriptive Beliefs: These beliefs express what should or should not be done with regard
to a product or brand. For example, a consumer might believe that it's essential to recycle
packaging from a product.
Attitudes:
1.Definition: Attitudes are evaluative judgments or feelings that individuals have
toward an object or concept. Attitudes are based on both cognitive (beliefs) and
affective (emotional) responses. They represent an individual's overall positive or
negative assessment of the object.
2.Components of Attitudes:
1. Cognitive Component: This component represents the individual's beliefs and thoughts about the object. It
encompasses what the person knows and believes to be true about the object.
2. Affective Component: This component reflects the emotional responses or feelings associated with the
object. It includes feelings of liking, disliking, satisfaction, or happiness.
3. Behavioral Component: This component relates to the individual's behavioral intentions and actions toward
the object. It indicates how likely the person is to engage in certain behaviors, such as purchasing,
recommending, or avoiding the object.
3.Attitudes and Consumer Behavior: Attitudes strongly influence consumer behavior.
Positive attitudes are more likely to lead to favorable consumer actions, such as
purchasing a product or becoming a loyal customer. Negative attitudes can deter
consumers from engaging with a product or brand.
Change in Attitudes: Attitudes can change over time due to various factors,
including new information, personal experiences, social influences, and
marketing efforts. Marketers often seek to influence and change consumer
attitudes through advertising, product positioning, and other strategies.
• In summary, consumer attitudes are multifaceted, consisting of both
cognitive beliefs and affective responses. These attitudes serve as a guide
for consumer decision-making, influencing whether individuals choose to
engage with products, brands, or concepts in a positive or negative
manner. Understanding the interplay between beliefs and attitudes is
essential for marketers seeking to shape consumer perceptions and
preferences.
Consumer Attitude Formation:
• Direct Experience: Personal experiences with a product, brand, or
service can strongly influence attitude formation. Positive experiences
tend to result in more favorable attitudes, while negative experiences
can lead to negative attitudes. For example, a pleasant dining
experience at a restaurant can create a positive attitude toward that
establishment.
• Social Influence: Attitudes can be shaped through social interactions
and peer influence. People often adopt the attitudes of their social
circles, including family, friends, and colleagues. For instance, if
someone's close friends have positive attitudes toward a particular
smartphone brand, that individual may develop a similar attitude.
• Marketing and Advertising: Marketers use advertising, branding,
and promotional efforts to influence attitude formation. Effective
marketing campaigns can create positive associations and emotional
connections with products and brands. These efforts can shape
consumer attitudes by highlighting desirable features, benefits, and
values.
• Cognitive Processes: Cognitive processes, such as information
processing and belief formation, play a significant role in attitude
development. Consumers acquire knowledge and beliefs about
products and services through various sources, including advertising,
reviews, and word of mouth. These cognitive processes contribute to
attitude formation.
• Cultural and Social Norms: Cultural and societal norms can
influence the formation of attitudes. People often develop attitudes
that align with the values and norms of their culture or society. For
example, environmental consciousness may lead to positive attitudes
toward eco-friendly products.
Consumer Attitude Change:
• Persuasion: Persuasion is a common approach to attitude change. Marketers use
persuasive communication to influence consumers' beliefs and attitudes. This can
involve presenting compelling arguments, emotional appeals, endorsements, and
storytelling to encourage attitude shifts.
• Cognitive Dissonance: Cognitive dissonance theory suggests that individuals seek
consistency between their attitudes and behavior. When there is a discrepancy
between their beliefs and actions, they may experience discomfort. Marketers can
address cognitive dissonance by providing information or incentives that support a
change in attitude to align with behavior.
• Informational Influence: Providing consumers with new information or evidence
can lead to attitude change. This can involve presenting data, statistics, expert
opinions, or research findings that challenge existing beliefs and encourage a shift
in attitude.
• Emotional Appeal: Emotional appeals in advertising and messaging
can elicit strong emotional responses and influence attitude change. For
example, using heartwarming stories or compelling visuals can create
emotional connections with a brand or cause, leading to attitude shifts.
• Social Norms and Social Proof: People often look to others for cues
on how to behave and what attitudes to hold. Highlighting the
popularity or social acceptance of a particular attitude can encourage
individuals to adopt it. For instance, testimonials and user reviews can
serve as social proof.
• Behavioral Change: Sometimes, changing behavior can lead to
attitude change. When individuals engage in a behavior that is
incongruent with their existing attitudes, they may adjust their attitudes
to align with their actions. This is known as the theory of reasoned
action.
Question Bank
• Family influences on consumer behavior are significant and play a
crucial role in shaping individuals' attitudes, preferences, and
purchasing decisions. The family is often considered the primary
social unit, and its impact on consumer behavior is pervasive. Here are
some key ways in which family influences consumer behavior:
Socialization and Learning:
1. Families serve as a primary source of socialization. Children learn about
values, beliefs, and cultural norms related to consumption through family
interactions.
2. Parents and caregivers teach children about budgeting, financial
responsibility, and ethical considerations related to consumer choices.
Consumer Socialization:
1. The process of consumer socialization involves learning how to be a
consumer. Children observe and imitate their parents' purchasing behaviors
and decision-making processes.
2. Family members influence children's attitudes toward brands, products, and
shopping habits, which can persist into adulthood.
Family Roles and Responsibilities:
3. Family roles and responsibilities often dictate who is responsible for various
aspects of consumption, such as grocery shopping, meal planning, and making
major purchases.
4. These roles can influence individual preferences and habits. For example, a
parent responsible for grocery shopping may select products based on family
members' preferences.
Family Communication:
1. Family discussions and conversations about products, brands, and purchasing
decisions can shape individuals' attitudes and knowledge about consumer
products.
2. Word of mouth within the family can be a powerful influencer, as family
members often trust each other's recommendations and experiences.
Shared Values and Traditions:
3. Families often have shared values, traditions, and rituals related to
consumption. For example, holiday traditions may involve specific types of
meals, gift-giving practices, or cultural customs that influence purchasing
decisions.
4. Shared values can lead to brand loyalty and the continuation of family
traditions.
Influence on Major Life Events:
1. Families play a pivotal role in major life events, such as weddings, home
purchases, and family vacations. These events involve significant consumer
decisions and spending.
2. Family members often provide financial support, advice, and opinions during
these events, impacting the choice of products, services, and brands.
Economic Factors:
3. Family income and financial resources determine the family's purchasing
power and budget. Economic factors influence the types of products and
services a family can afford.
4. Economic constraints or affluence can shape consumption patterns, brand
choices, and lifestyle.
Inter-Generational Transfer:
1. Attitudes and behaviors related to consumer choices are often passed down
through generations. For example, cultural preferences, dietary habits, and
brand loyalty can persist from parents to children.
2. Young adults may adopt some of their parents' consumer preferences and
values.
Family Decision-Making:
3. Major family purchases, such as a home or a car, often involve joint decision-
making processes. Family members negotiate and influence each other's
choices.
4. Family members may have varying levels of involvement in decision-making,
depending on the product or service.
Influence of culture on consumer behavior
• Cultural Values and Beliefs:
• Culture instills specific values and beliefs that influence consumers'
priorities and preferences. For example, in some cultures, family
values may be paramount, influencing decisions related to family-
oriented products and services.
• Cultural beliefs may dictate attitudes toward issues such as health,
sustainability, religion, and ethics, affecting product choices and
consumption behavior.
Cultural Norms and Customs:
1. Cultural norms define acceptable behaviors within a society. These norms
extend to consumer behavior, affecting choices related to clothing, food,
etiquette, and gift-giving.
2. Cultural customs, such as holiday celebrations and rituals, can drive specific
consumer purchases and gift-giving patterns during those events.
Language and Communication:
3. Language is a critical aspect of culture. The way language is used, including
idioms, expressions, and communication styles, can influence the
effectiveness of marketing messages.
4. Businesses must consider language preferences and cultural nuances when
crafting advertising and branding to avoid misunderstandings or offense.
Aesthetics and Design Preferences:
1. Cultural aesthetics influence design preferences for products, packaging, and
advertising. What is considered visually appealing or tasteful can vary
significantly across cultures.
2. Brands often adapt their visual identity and design elements to resonate with
the aesthetic sensibilities of specific cultural markets.
Consumption Patterns:
3. Cultural norms and expectations can shape consumption patterns, including
when, where, and how products are used. For example, cultural norms may
dictate meal times, attire, and consumption of certain beverages.
4. Understanding these consumption patterns is essential for businesses targeting
specific cultural markets.
Cultural Symbols and Iconography:
1. Cultural symbols and icons carry meaning and significance. They are often
used in branding and advertising to connect with consumers on a cultural
level.
2. Successful marketing campaigns often incorporate cultural symbols and
references to resonate with consumers and convey a sense of belonging.
Religious and Spiritual Influences:
3. Religious beliefs and practices can impact consumer behavior, affecting
choices related to food, clothing, holidays, and gifts.
4. Some products and services may align with religious values, while others may
be avoided due to religious restrictions.
Cultural Subgroups and Diversity:
1. Cultures are not monolithic but comprise diverse subgroups with their own customs
and preferences. Understanding these subcultures is important for targeted marketing
efforts.
2. Global businesses often tailor their products and messages to appeal to specific cultural
subgroups within a larger market.
Consumer Decision-Making Styles:
3. Culture can influence how consumers approach decision-making, including whether
they prioritize individual or collective preferences, seek input from others, or rely on
authority figures.
4. Understanding cultural decision-making styles is vital for businesses to adapt their
sales and marketing strategies.
Globalization and Hybrid Cultures:
5. In today's globalized world, cultures often intersect and blend, leading to the
emergence of hybrid cultural identities. These hybrid cultures can present unique
opportunities and challenges for businesses.
6. Marketers must be sensitive to evolving cultural dynamics and adapt their strategies
accordingly.
Sub culture and cross culture influences on consumer
behaviour
• Ethnic and Racial Subcultures: Different ethnic and racial groups within a
society often have unique consumer preferences. For example, food choices,
clothing styles, and cultural celebrations can vary among ethnic groups.
• Generational Subcultures: Different generations (e.g., Baby Boomers,
Generation X, Millennials, Generation Z) have their own consumer behaviors and
attitudes. They may have distinct preferences for technology, fashion,
entertainment, and communication channels.
• Religious Subcultures: Religious beliefs and practices can significantly influence
consumer behavior. For example, dietary restrictions, clothing choices, and
holiday-related purchases are often influenced by religious beliefs.
• Lifestyle Subcultures: Groups with shared lifestyles or interests, such as fitness
enthusiasts, eco-conscious consumers, or gamers, form subcultures that affect their
consumer choices. These subcultures often lead to niche markets and specialized
products.
• Geographic Subcultures: Different regions or locations within a
country may have distinct consumer behaviors due to factors like
climate, local traditions, and economic conditions. Marketers often
adapt their strategies to suit regional preferences.
• Understanding subculture influences is vital for businesses looking to
reach specific consumer segments. Marketers often tailor their
products, messaging, and advertising to resonate with these
subcultures.
Cross-Culture Influences on Consumer
Behavior:
• cculturation: Acculturation refers to the process by which individuals
from one culture adopt elements of another culture. This can lead to
changes in consumer preferences, dietary habits, and lifestyle choices.
• Cultural Borrowing: Consumers often borrow elements from other
cultures, such as fashion trends, culinary preferences, or even language.
Cultural borrowing can lead to the adoption of foreign products or
practices.
• Global Brands and Products: Global brands and products often
transcend cultural boundaries. However, their success in different
cultural contexts may require adjustments to align with local preferences
and customs.
• Cultural Fusion: Some consumers embrace cultural fusion, blending
elements from multiple cultures to create a unique identity or lifestyle.
This can lead to the emergence of hybrid cultural trends and consumer
behaviors.
• Cross-Cultural Misunderstandings: Misunderstandings can occur
when consumers from different cultures interpret products or
advertising differently. Cultural sensitivity and effective
communication are essential to avoid such issues.
• Cultural Sensitivity in Marketing: Businesses must adapt their
marketing strategies to respect and appeal to diverse cultural
backgrounds. This may involve translating content, understanding
cultural taboos, and respecting cultural symbols.
Group dynamics and consumer refrence
groups
• Here are some key aspects of group dynamics:
• Social Influence: Within a group, individuals influence each other's
attitudes, beliefs, and behaviors. This influence can be both direct (through
communication) and indirect (through observation).
• Conformity: Group dynamics often lead to conformity, where individuals
adopt the opinions or behaviors of the majority in the group. This can include
conforming to fashion trends, product choices, or consumption habits.
• Norms and Roles: Groups establish norms (accepted behaviors) and roles
(positions within the group). These norms can shape consumer preferences
and choices. For example, a group may have a norm of purchasing certain
brands or products.
• Group Identity: Group dynamics contribute to the formation of group
identity and a sense of belonging. Consumers may make choices to
align with the group's identity and maintain social cohesion.
• Word of Mouth and Recommendations: Group members often
engage in word-of-mouth communication and provide
recommendations to each other. Positive or negative reviews and
recommendations can significantly influence consumer decisions.
• Leadership and Opinion Leaders: Some individuals within a group
may emerge as opinion leaders or influencers. Their opinions and
choices carry weight and can sway the preferences and behaviors of
others in the group.
• Groupthink: Group dynamics can sometimes lead to groupthink,
where members prioritize group harmony over critical thinking. This
can result in conformity to poor decisions or choices.
Consumer Reference Groups:
• Here are some common types of consumer reference groups:
• Direct Reference Groups: These are groups with which individuals have
direct face-to-face interactions. Examples include family, friends, colleagues,
and neighbors. Direct reference groups have a strong influence on consumer
choices due to the proximity and personal relationships involved.
• Aspirational Reference Groups: Aspirational reference groups represent
groups or individuals that consumers admire and seek to emulate. This can
include celebrities, influencers, or successful individuals. Consumers may
mimic the behaviors and preferences of aspirational groups.
• Membership Reference Groups: These are groups to which individuals
belong, and membership is significant to their identity. For example,
professional associations, social clubs, or online communities can serve as
membership reference groups that influence consumption patterns.
• Dissociative Reference Groups: Dissociative reference groups are
those that individuals want to distance themselves from or avoid being
associated with. Negative perceptions of certain groups can lead to
consumers making choices that differentiate themselves from these
groups.
• Virtual Reference Groups: With the rise of social media and online
communities, virtual reference groups have become influential.
Consumers often seek information, recommendations, and validation
from online communities and social networks.
• Brand Communities: Some consumers form brand communities
around specific products or brands. These communities, often online,
share a common passion for a particular brand and engage in
discussions, reviews, and recommendations related to that brand.
Social class in consumer behaviour
• . Purchasing Power:
• Social class is strongly associated with income levels. Individuals from higher social
classes generally have greater purchasing power, enabling them to afford more
expensive and luxury products and services.
• High social class consumers may prioritize quality, exclusivity, and status when
making purchasing decisions.
• . Product Preferences:
• Social class can influence product preferences and brand choices. Consumers from
different social classes may have distinct preferences for certain brands or product
categories.
• For example, luxury brands often target consumers from upper social classes who
value prestige and exclusivity.
• Consumption Patterns:
• Social class affects consumption patterns, including the types and quantities
of products purchased. Upper-class consumers may engage in more
conspicuous consumption, displaying their wealth through luxury items.
• Lower-class consumers may focus on essential and practical purchases,
emphasizing value and affordability.
• . Shopping Habits:
• Social class can influence where and how consumers shop. Higher social
class individuals may prefer upscale boutiques and department stores, while
lower-class consumers may frequent discount retailers.
• Shopping behaviors, such as online shopping versus in-store shopping, can
also be influenced by social class.
• Leisure Activities:
• Social class often dictates leisure activities and hobbies. Upper-class
individuals may participate in activities like golf or fine dining, while
lower-class consumers may engage in more budget-friendly leisure
pursuits.
• Leisure choices can influence spending on related products and
services.
• . Education and Information Seeking:
• Higher social class consumers typically have greater access to
education and information resources. They may engage in more
research and information-seeking before making purchasing decisions.
• Education levels can also impact how consumers evaluate product
attributes and make informed choices.
• Brand Loyalty:
• Social class can influence brand loyalty. Consumers from higher social
classes may develop brand preferences for premium or prestigious
brands, while lower-class consumers may prioritize affordability.
• Brand loyalty within a specific social class can lead to consistent
purchasing behavior.
• Social Status and Symbolism:
• Social class is often linked to social status and prestige. Consumers
may use products and brands as symbols of their social standing.
• Luxury items and conspicuous consumption can serve as status
symbols for those in higher social classes.
Persons age impact of consumer behaviour
• Age and Consumer Needs:
• Children and Adolescents: Younger consumers, such as children and teenagers, often have
specific needs related to education, entertainment, and peer acceptance. They may be
influenced by trends, peer pressure, and parental guidance in their purchasing decisions.
• Young Adults (18-34): This group typically experiences life transitions such as starting
college, entering the workforce, and forming households. They may prioritize products and
services related to education, career development, technology, and housing.
• Middle-Aged Adults (35-54): This age group often focuses on family and career
advancement. Their purchasing decisions may center around family-related products, home
ownership, insurance, and investments.
• Seniors (55+): Seniors tend to have more discretionary time and may prioritize health and
leisure activities. They may also be concerned about retirement planning, healthcare, and
travel.
Life cycle stages impact on consumer behaviour
• 1. Bachelorhood/Single Life Stage:
• Consumer Needs: Young adults who are single and without
dependents typically have fewer financial responsibilities. They may
prioritize personal experiences, leisure, and self-indulgence.
• Purchasing Habits: This group may be more willing to spend on
travel, entertainment, fashion, and technology. They may also be early
adopters of new trends and products.
• Financial Considerations: Spending patterns may be more
discretionary, and savings may not be a primary focus.
• 2. Newlyweds/Marriage Life Stage:
• Consumer Needs: Newlyweds often have a focus on building a life
together. They may prioritize products and services related to housing,
furniture, appliances, and family planning.
• Purchasing Habits: There is an increased demand for home-related
items, home improvement, and durable goods. Purchases may be made
jointly by the couple.
• Financial Considerations: Couples may need to budget and plan for
shared expenses and future financial goals.
• 3. Parenthood/Family Life Stage:
• Consumer Needs: Families with children have unique needs related
to child-rearing, education, healthcare, and child-friendly products.
• Purchasing Habits: Spending on childcare, education, toys, clothing,
and family-oriented products becomes significant. Safety and quality
considerations are crucial.
• Financial Considerations: Budgeting for family expenses, savings
for education, and insurance for family security are common concerns.
• 4. Empty Nesters Life Stage:
• Consumer Needs: As children leave home, empty nesters often have
more disposable income and free time. They may prioritize travel,
leisure, and hobbies.
• Purchasing Habits: Spending may shift toward experiences, home
renovations, downsizing, and investments in retirement planning.
• Financial Considerations: Financial planning may focus on
retirement savings, healthcare, and estate planning.
• 5. Retirement Life Stage:
• Consumer Needs: Retirees may have diverse needs, including
healthcare, travel, leisure, and hobbies. They may also prioritize
financial security.
• Purchasing Habits: Spending patterns may involve healthcare-related
products and services, travel, and products designed for active aging.
• Financial Considerations: Managing retirement savings, pension
income, and estate planning become prominent concerns.
• 6. Late Retirement/Senior Life Stage:
• Consumer Needs: Seniors may prioritize healthcare, assisted living,
and products designed for aging in place. There may be an increased
focus on maintaining independence and well-being.
• Purchasing Habits: Spending may shift toward healthcare-related
expenses, mobility aids, and leisure activities that cater to seniors.
• Financial Considerations: Managing healthcare costs and ensuring
financial security during retirement are primary concerns.
• 7. Pre-Retirement Life Stage (Approaching Retirement):
• Consumer Needs: Individuals in the pre-retirement stage may focus
on career transitions, financial planning, and health.
• Purchasing Habits: They may invest in education, transition to part-
time work, or consider early retirement planning, impacting spending
habits.
• Financial Considerations: Planning for retirement, optimizing
savings, and addressing health and insurance needs are key priorities.
Impact of occupation and economic circumstances on
consumer behaviour
• 1. Occupation:
• Income Level: Occupation often determines an individual's income level. Higher-
paying occupations can lead to greater disposable income, which, in turn, allows for
more discretionary spending on non-essential goods and services.
• Time Constraints: The demands of specific occupations, such as long working hours
or irregular schedules, can impact consumers' available time for shopping and leisure
activities. Convenience and efficiency may become more important for busy
professionals.
• Professional Attire: Certain occupations require employees to adhere to dress codes or
wear specific attire. This can influence clothing and grooming product purchases.
• Networking and Socialization: Networking and social events associated with some
occupations can influence spending on entertainment, dining out, and professional
appearance.
• 2. Economic Circumstances:
• Income and Disposable Income: A person's financial situation, including income,
savings, and debt levels, significantly shapes their spending habits. Higher income
generally leads to greater purchasing power and the ability to afford a wider range of
products and experiences.
• Savings and Investments: Economic circumstances affect how individuals allocate
their resources. Those with substantial savings or investments may prioritize wealth
preservation and retirement planning, impacting their spending patterns.
• Debt Burden: High levels of debt, such as student loans or credit card debt, can limit
consumers' discretionary spending and influence their financial priorities.
• Economic Uncertainty: Economic conditions, such as recessions or economic
downturns, can lead to changes in consumer behavior, including reduced spending,
increased savings, and a focus on value-oriented purchases.
• Luxury vs. Necessities: Economic circumstances often dictate whether individuals
prioritize luxury and non-essential purchases or focus on essential needs and value-
oriented goods.
Question Bank
Opinion leadership
• Opinion leadership is a concept in marketing and sociology that refers
to individuals who are influential in shaping the opinions, attitudes,
and behaviors of others, particularly within their social networks or
communities. Opinion leaders are often considered experts or trusted
sources of information in specific areas or domains. They play a
crucial role in the diffusion of innovations and the spread of ideas.
Here are key characteristics and aspects of opinion leadership:
1.Expertise: Opinion leaders are often perceived as knowledgeable and
experienced in a particular field or subject matter. Their expertise lends credibility
to their opinions and recommendations.
2.Trustworthiness: People trust opinion leaders because they believe they provide
unbiased and reliable information. Trust is a vital component of their influence.
3.Accessibility: Opinion leaders are accessible to their followers or social network.
They are approachable, engage in conversations, and are willing to share their
knowledge and insights.
4.Active Engagement: Opinion leaders are actively engaged in discussions and
interactions within their communities. They are seen as active participants rather
than passive observers.
5.Social Network Influence: Opinion leaders have a significant presence within
their social networks, whether in person or online. They have a broad reach and
can influence a large number of people.
6.Early Adoption: Opinion leaders are often among the first to adopt new products,
services, or ideas. Their early adoption sets an example for others and encourages
them to follow suit.
7. Advocacy: They tend to advocate for specific products, brands, or causes. Their
endorsements and recommendations carry weight and can impact the decisions of others.
8. Varied Domains: Opinion leaders can be experts or influencers in various domains, such
as fashion, technology, health, politics, or entertainment. Their influence extends to areas
where they are perceived as authorities.
9. Two-Step Flow of Communication: The concept of the two-step flow of communication
suggests that opinion leaders play an intermediary role between mass media and the general
public. They interpret and filter information from mass media sources and then pass it on to
their social networks.
10. Local and Global Influence: Opinion leaders can have both local and global influence,
depending on their reach and the nature of their expertise. Some may have a local following,
while others can impact a global audience.
11. Recognition: Opinion leaders are often recognized and respected by their peers and
followers. They may receive acknowledgment or recognition for their contributions.
12. Heterogeneity: Opinion leaders can be found in various demographics and across
different age groups, genders, and cultural backgrounds.
13. Impact on Decision-Making: The opinions and recommendations of opinion leaders can
influence the decision-making process of consumers, whether it's purchasing a product,
supporting a cause, or adopting a new behavior.
Dynamics of opinion leadership process
• The dynamics of the opinion leadership process involve how individuals become opinion
leaders, how they exert influence, and the effects of their influence on others. This process is
complex and influenced by various factors. Here's an overview of the dynamics involved in
opinion leadership:
• 1. Identification as Opinion Leaders:
• Expertise and Knowledge: Opinion leaders typically possess expertise and knowledge in a
specific domain, such as technology, fashion, or healthcare. They are recognized as authorities
in these areas.
• Passion and Enthusiasm: Passion and enthusiasm for a particular subject or topic often drive
individuals to become opinion leaders. Their genuine interest fuels their engagement and
influence.
• Proactive Engagement: Opinion leaders actively engage in conversations, discussions, and
information sharing within their social networks or communities. They are proactive in
seeking and disseminating information.
• 2. Building Trust and Credibility:
• Consistency and Reliability: Opinion leaders establish trust and
credibility by consistently providing accurate and reliable information.
Their followers rely on them as trusted sources.
• Transparency and Authenticity: Being transparent and authentic in
their interactions and recommendations is crucial for maintaining trust.
People are more likely to follow opinion leaders who are sincere and
honest.
• Building a Personal Brand: Opinion leaders often build a personal
brand around their expertise and interests. This brand becomes
associated with trustworthiness and expertise.
• 3. Influence and Communication:
• Information Sharing: Opinion leaders share information, insights,
and recommendations with their followers. They are often early
adopters of new products, services, or ideas and share their
experiences.
• Two-Way Communication: Effective opinion leaders engage in two-
way communication. They listen to the concerns and questions of their
followers and respond with valuable insights.
• Advocacy and Endorsement: Opinion leaders actively advocate for
products, brands, or causes they believe in. Their endorsements carry
weight and can influence the decisions of others.
• 4. Reach and Impact:
• Social Network Size: The size of an opinion leader's social network
can vary. Some have a broad reach, while others may have a more
focused and niche following.
• Viral Effect: The influence of opinion leaders often extends beyond
their immediate followers. Their recommendations can go viral,
reaching a wider audience through word of mouth and social sharing.
• Diversity of Influence: Opinion leaders can have influence in various
domains and across different platforms, including social media, blogs,
forums, and in-person interactions.
• 5. Feedback and Adaptation:
• Feedback Loop: Opinion leaders pay attention to the feedback and responses of their
followers. They adapt their messaging and recommendations based on the needs and
preferences of their audience.
• Continuous Learning: Staying informed and continuously learning about
developments in their areas of expertise is essential for opinion leaders to maintain their
influence.
• 6. Ethical Considerations:
• Ethical Behavior: Maintaining ethical behavior, including transparency about
affiliations and potential conflicts of interest, is crucial for opinion leaders to retain their
credibility.
• 7. Impact on Decision-Making:
• Consumer Decisions: Opinion leaders' recommendations and endorsements can
significantly impact consumer decisions, from purchasing products to supporting
causes.
• Innovation Adoption: Opinion leaders often play a role in the diffusion of innovations.
They can influence others to adopt new products or technologies.
Motivation Behind Opinion Leadership
• The motivation behind opinion leadership can vary among individuals but generally
revolves around a combination of personal interests, expertise, and a desire to make
a positive impact on others. Here are some key motivations that drive people to
become opinion leaders:
Passion for a Subject or Topic: Many opinion leaders are genuinely passionate about
a particular subject or topic. They have a deep interest in that area and enjoy sharing
their knowledge, insights, and experiences with others. Their enthusiasm motivates
them to become active participants in relevant discussions and communities.
Expertise and Knowledge: Opinion leaders often have a high level of expertise and
knowledge in their chosen field. Their motivation stems from a desire to share their
expertise, educate others, and help them make informed decisions. They enjoy being
recognized as authorities in their domain.
Desire to Help Others: A common motivation among opinion leaders
is the desire to help others. They see themselves as sources of valuable
information and guidance for those seeking advice or recommendations.
This motivation is often rooted in a genuine wish to assist and benefit
others.
Influence and Impact: Many opinion leaders are driven by the
opportunity to have a positive impact on their social networks or
communities. They recognize that their opinions and recommendations
can influence the decisions and behaviors of others. This sense of
influence and impact is a motivating factor.
Personal Branding: Opinion leaders often build personal brands
around their expertise and interests. They view their role as a way to
create a distinct online or offline identity and reputation. Building a
personal brand can lead to recognition, respect, and career opportunities.
Networking and Connections: Opinion leaders enjoy networking and
making connections with like-minded individuals. They value the
interactions and relationships formed within their communities and view
their role as a means to expand their social networks.
Recognition and Status: Becoming an opinion leader can bring
recognition and status within specific communities or industries. Many
opinion leaders enjoy being acknowledged for their contributions and
expertise.
Innovation and Change: Some opinion leaders are motivated by a
desire to drive innovation and change within their areas of interest. They
see themselves as change agents who can introduce new ideas, trends, or
products to their followers.
Monetary Rewards: While not the primary motivation for all opinion
leaders, some may seek financial rewards through endorsements,
sponsorships, or affiliate marketing. However, maintaining authenticity
and trust remains important in such cases.
Personal Growth: The process of becoming an opinion leader can be
personally fulfilling and contribute to an individual's personal growth
and development. It offers opportunities for learning, self-expression,
and self-discovery.
The diffusion process in consumer behaviour
• The diffusion process in consumer behavior refers to the spread of
new products, innovations, or ideas among consumers over time. It is
a model that describes how a new product or concept is adopted and
accepted by a population. The diffusion process typically follows a
pattern characterized by various stages, each involving different
groups of consumers.
The most widely recognized model describing this process is the
Rogers' Diffusion of Innovations theory, which identifies five main
stages:

1.Innovation:
1. In this stage, the new product or idea is introduced to the market. Innovators, a
small percentage of the population (typically around 2.5%), are the first to adopt
the innovation.
2. Innovators are often risk-takers who are eager to try new things, even if they are
uncertain about the outcomes.
2.Early Adopters:
1. Early adopters, representing about 13.5% of the population, are the next group
to embrace the innovation. They are opinion leaders and are more risk-averse
than innovators.
2. Early adopters play a crucial role in influencing others' perceptions and
decisions regarding the innovation.
3.Early Majority:
1. The early majority, constituting approximately 34% of the population, is the group
that follows the early adopters in adopting the innovation.
2. Members of the early majority tend to be more pragmatic and cautious. They adopt
innovations after seeing evidence of their benefits.
4.Late Majority:
3. The late majority, making up around 34% of the population, is the group that adopts
the innovation later in the process.
4. Members of the late majority are often skeptical and adopt innovations only when
they become widely accepted and necessary.
5. Laggards:
• Laggards are the last group to adopt the innovation, representing about 16%
of the population.
• Laggards are highly resistant to change and may continue to rely on older,
established products or practices even when alternatives are available.
The adoption process of consumer behaviour
• The adoption process in consumer behavior refers to the stages that
individuals go through when making the decision to adopt or accept a
new product, service, technology, or idea. It involves a series of
cognitive and behavioral steps that consumers take before fully
integrating the innovation into their daily lives. The adoption process
is often described in five stages, as outlined below:
1.Awareness: In the first stage, consumers become aware of the
existence of the new product, service, or idea. Awareness can result
from various sources, including marketing efforts, word of mouth,
media coverage, or personal experiences. At this stage, consumers may
have limited information about the innovation.
2.Interest: Once aware of the innovation, consumers may develop an
interest in learning more about it. They seek information, explore its
features and benefits, and evaluate how it could potentially address
their needs or problems. Marketers often play a critical role in
providing information and generating interest through advertising,
content, and promotions.
1.Evaluation: In the evaluation stage, consumers assess the innovation
more critically. They compare it to existing alternatives and consider
factors like quality, price, convenience, and compatibility with their
needs and lifestyle. This stage involves a decision-making process
where consumers weigh the advantages and disadvantages of adopting
the innovation.
2.Trial: After a positive evaluation, some consumers move on to the
trial stage. They decide to try the innovation on a limited basis to gain
firsthand experience. Trial can involve a free trial, a sample, or a small
purchase. During this stage, consumers form initial opinions and
gather practical experience with the innovation.
• Adoption: The final stage is adoption, where consumers make a
commitment to fully integrate the innovation into their regular
routines or purchase it regularly. Adoption indicates that consumers
have accepted the innovation as a part of their lives and find value in
it. They become regular users or customers.
Levels of consumer decision making
• Consumer decision-making involves a series of steps or levels that
consumers go through when making choices about products, services,
or other consumption-related activities. These levels vary in
complexity and depend on factors such as the nature of the purchase,
the consumer's involvement, and the information available. The three
primary levels of consumer decision-making are:
• Routine Decision Making:
• Routine decision making is the simplest and most frequent level of
decision-making. It typically applies to everyday, low-involvement
purchases of familiar products or services.
• Characteristics:
• Low consumer involvement: Consumers don't invest much time or effort in
the decision.
• Habitual buying behavior: Consumers have established preferences and may
follow habitual buying patterns.
• Minimal information search: Little or no information gathering is involved
because consumers are already familiar with the products.
• Examples: Buying groceries, toiletries, or other routine household
items.
• Limited Decision Making:
• Limited decision making occurs when consumers are faced with a
somewhat more involved purchase but still don't engage in extensive
information search or evaluation.
• Characteristics:
• Moderate consumer involvement: Consumers put more thought into the
decision than with routine purchases but not as much as with high-
involvement decisions.
• Evaluation of a few options: Consumers may consider a limited number of
alternatives and criteria.
• Limited information search: Consumers gather some information but not an
extensive amount.
• Examples: Choosing a restaurant for a special occasion, buying a
moderately priced electronic device.
Extensive Decision Making:
1. Extensive decision making is the most complex level of consumer decision-
making. It applies to high-involvement purchases that are infrequent or
involve significant risk.
2. Characteristics:
1. High consumer involvement: Consumers invest significant time, effort, and cognitive
resources into the decision.
2. Extensive information search: Consumers seek out a wide range of information sources,
compare multiple alternatives, and evaluate various criteria.
3. Complex evaluation: Multiple factors and criteria, including quality, price, brand
reputation, and personal preferences, are considered.
3. Examples: Purchasing a car, choosing a university for higher education,
making an investment decision.
Models of consumer decision making
• The Consumer Decision-Making Process Model:
• This is a comprehensive model that breaks down the consumer decision-making process into
several stages:
• Problem Recognition: The process begins when a consumer recognizes a need or problem that
can be satisfied through a purchase.
• Information Search: After identifying the need, consumers gather information about potential
solutions, which may involve internal (memory) or external (research) sources.
• Evaluation of Alternatives: Consumers assess various options and weigh the pros and cons of
each, considering factors like price, quality, and brand reputation.
• Purchase Decision: Based on their evaluation, consumers make a decision and choose a
specific product or service.
• Post-Purchase Evaluation: After the purchase, consumers assess whether their expectations
were met. Satisfaction or dissatisfaction can influence future decisions and brand loyalty.
• The Howard-Sheth Model:
• This model emphasizes the psychological and sociological factors that
influence consumer decision-making. It includes three key components:
• Inputs: These are external factors that influence consumers, such as
marketing stimuli (advertising, promotion), environmental factors
(culture, social class), and individual factors (perception, motivation).
• Process: This stage involves the cognitive and emotional processes that
consumers go through when making a decision, including information
processing, perception, attitude formation, and motivation.
• Outputs: The outputs represent the consumer's ultimate decision,
whether it's to purchase or not purchase a product or service. These
outputs are influenced by the inputs and the decision-making process.
• The Engel-Kollat-Blackwell Model:
• This model focuses on the consumer's decision-making process and
views it as a series of steps:
• Problem Recognition: Identifying a need or problem that triggers the
decision-making process.
• Information Search: Gathering information about potential solutions.
• Evaluation of Alternatives: Assessing various options based on
specific criteria.
• Purchase Decision: Selecting a product or service.
• Post-Purchase Behavior: Assessing satisfaction and whether the
consumer will become a repeat customer.
• The Fishbein Model:
• This model focuses on how consumers form attitudes and intentions
toward products or services. It includes the following components:
• Beliefs: Consumers have specific beliefs about a product, which can
be related to its attributes or features.
• Attitude: These beliefs contribute to an overall attitude toward the
product.
• Behavioral Intention: The attitude influences the consumer's
intention to purchase or not purchase the product.
Question Bank
Concept of consumer satisfaction
• Consumer satisfaction is a fundamental concept in marketing and
business that reflects how well a product, service, or experience meets
or exceeds a consumer's expectations and needs. It is a critical factor
for business success and is closely tied to customer loyalty, retention,
and positive word-of-mouth recommendations. Here are key aspects of
the concept of consumer satisfaction:
1.Meeting Expectations: Consumer satisfaction is often measured by the extent to
which a product or service fulfills a consumer's expectations. When a product
performs as expected or better, consumers tend to be satisfied.
2.Subjective Evaluation: Satisfaction is a subjective assessment and varies from one
individual to another. What one person finds satisfying, another may not, depending
on their unique preferences and standards.
3.Multi-Dimensional: Satisfaction can encompass various dimensions, including
product quality, price, customer service, convenience, reliability, and overall
experience. Consumers evaluate these dimensions differently based on their
priorities.
4.Relative Comparison: Consumers often assess their satisfaction by comparing their
experiences with a product or service to their past experiences or to the offerings of
competitors. This relative comparison influences their perception of satisfaction.
5.Loyalty and Repeat Business: Satisfied customers are more likely to become loyal
customers who continue to purchase from a brand or business. They are also more
likely to recommend the product or service to others.
6. Customer Retention: High levels of customer satisfaction contribute to
customer retention, reducing the need for businesses to acquire new
customers continuously. Retaining existing customers is often more cost-
effective than acquiring new ones.
7. Brand Image and Reputation: A history of satisfying customers
contributes to a positive brand image and reputation. Brands known for
customer satisfaction tend to attract more consumers and enjoy a competitive
advantage.
8. Word-of-Mouth Marketing: Satisfied customers are more likely to share
their positive experiences with friends, family, and peers, leading to positive
word-of-mouth marketing that can drive new business.
9. Customer Feedback: Feedback from satisfied customers can provide
valuable insights for businesses to improve their products, services, and
processes. It helps in identifying areas for enhancement.
10. Service Recovery: When issues or problems arise, businesses that
effectively address and resolve them can often turn dissatisfied customers into
satisfied ones, improving long-term relationships.
Working towards enhancing consumer
satisfaction
• Enhancing consumer satisfaction is a critical goal for businesses seeking to build
strong customer relationships and achieve long-term success. Here are strategies
and best practices that businesses can implement to work towards enhancing
consumer satisfaction:
1.Understand Customer Needs and Expectations:
1. Conduct market research to gain insights into your target audience's preferences, needs,
and expectations.
2. Analyze customer feedback, reviews, and complaints to identify areas for improvement.
2.Deliver Quality Products and Services:
1. Ensure that your products or services meet or exceed the quality standards expected by
your customers.
2. Continuously monitor and improve the quality of your offerings based on customer
feedback.
3.Provide Excellent Customer Service:
1. Train and empower your customer service representatives to provide timely, empathetic, and
effective assistance to customers.
2. Establish multiple channels for customer support, such as phone, email, chat, and social media.
4.Personalize Customer Interactions:
3. Use customer data and preferences to personalize interactions and recommendations.
4. Address customers by name and acknowledge their past interactions and purchases.
5.Simplify Processes and Transactions:
5. Streamline the buying process, making it as simple and efficient as possible.
6. Minimize unnecessary steps and reduce friction in transactions.
6.Ensure Transparency and Honesty:
7. Be transparent about product features, pricing, and policies.
8. Avoid deceptive marketing practices and communicate openly with customers.
7.Solicit and Act on Customer Feedback:
9. Encourage customers to provide feedback through surveys, reviews, and direct communication.
10.Act on feedback promptly, making necessary improvements and demonstrating that you value
customer opinions.
8.Resolve Issues and Complaints Effectively:
1. Have a clear process for handling customer complaints and concerns.
2. Empower employees to resolve issues at the first point of contact whenever possible.
9.Reward Loyalty and Repeat Business:
3. Implement loyalty programs, discounts, or rewards to incentivize repeat purchases.
4. Show appreciation for long-term customers through exclusive offers or personalized
messages.
10.Emphasize Employee Training and Engagement:
5. Invest in training programs to equip employees with the skills and knowledge
needed to provide exceptional service.
6. Foster a positive work environment to promote employee engagement and job
satisfaction, as happy employees often lead to satisfied customers.
11.Monitor and Benchmark Against Competitors:
7. Keep an eye on your competitors and their customer satisfaction efforts.
8. Benchmark your performance against industry standards and best practices.
Sources of consumer dissatisfaction
• Consumer dissatisfaction can arise from various sources, and understanding these sources
is crucial for businesses looking to improve their products, services, and customer
experiences. Here are some common sources of consumer dissatisfaction:
1. Product or Service Quality Issues:
1. Defective or subpar products that do not meet the promised quality standards.
2. Poorly executed services that result in errors, delays, or suboptimal outcomes.
2. Misleading Advertising and Marketing:
1. Deceptive advertising practices that exaggerate product claims or fail to disclose important
information.
2. False promises or unrealistic expectations set by marketing campaigns.
3. Customer Service Problems:
1. Unresponsive or unhelpful customer support that fails to address customer inquiries or complaints
effectively.
2. Rude or unprofessional behavior from customer service representatives.
4. Billing and Pricing Discrepancies:
1. Unexpected or hidden fees and charges that were not clearly communicated.
2. Billing errors, overcharges, or discrepancies in pricing.
5. Delivery and Shipping Issues:
3. Late or delayed deliveries that inconvenience customers.
4. Lost or damaged shipments that require replacements or refunds.
6. Lack of Availability or Inventory:
5. Products or services frequently out of stock or unavailable when customers want
to purchase them.
6. Difficulty scheduling appointments or reservations due to limited availability.
7. Complex or Inefficient Processes:
7. Cumbersome and time-consuming processes for purchasing, returns, or resolving
issues.
8. Complicated online forms, payment procedures, or account management.
8.Communication Breakdowns:
1. Lack of communication about order status, changes, or delays.
2. Difficulty reaching customer service representatives or obtaining updates.
9.Unmet Expectations:
3. Products or services that do not meet customers' needs or perform as expected.
4. Failure to deliver on promises made during the sales process.
10.Inconsistent Experiences:
5. Discrepancies in the quality of service or product experiences across different
locations or channels.
6. Inconsistencies in the treatment of customers by different employees.
11.Privacy and Data Concerns:
7. Mishandling of customer data or privacy breaches that compromise personal
information.
8. Unsolicited marketing or communication that invades customers' privacy.
12.Limited Options and Customization:
1. Lack of variety or options that cater to different customer preferences.
2. Inability to customize products or services to individual needs.
13.Difficulties with Returns and Refunds:
3. Complex, time-consuming, or restrictive return policies.
4. Delays or complications in processing refunds or exchanges.
14.Environmental and Ethical Concerns:
5. Disapproval of a company's environmental practices or ethical standards.
6. Customers may be dissatisfied if they perceive a company as not aligning with their values.
15.Competitive Alternatives:
7. Availability of better or more attractive alternatives in the market that prompt customers to
switch providers.
16.Unresolved Issues:
8. Failure to address or resolve customer complaints or issues in a timely and satisfactory
manner.
17.Inadequate Information and Education:
9. Customers may be dissatisfied if they feel they were not adequately informed or educated
about a product or service before making a purchase.
Dealing with consumer complaint
• Dealing with consumer complaints effectively is crucial for maintaining customer
satisfaction, reputation, and loyalty. Handling complaints in a professional and
empathetic manner can turn dissatisfied customers into loyal advocates. Here's a
step-by-step guide on how to deal with consumer complaints:
1.Listen Actively:
1. When a customer approaches you with a complaint, listen attentively without interrupting.
Let them express their concerns fully.
2.Stay Calm and Empathetic:
1. Maintain a calm and empathetic demeanor. Show understanding and empathy toward the
customer's frustration or disappointment.
3.Apologize Sincerely:
1. Begin by offering a sincere apology for any inconvenience, frustration, or dissatisfaction the
customer has experienced. Acknowledge the issue without placing blame.
4.Ask Clarifying Questions:
1. Seek clarification to fully understand the nature of the problem. Ask open-ended questions to
gather more information about the complaint.
5.Take Responsibility:
2. Accept responsibility for addressing the issue. Even if the problem was not directly caused
by your business, take ownership of resolving it.
6.Offer a Solution:
3. Propose a solution or options for resolving the problem. Be flexible and willing to
accommodate the customer's preferences if possible.
7.Set Realistic Expectations:
4. Communicate a clear timeline for resolving the issue, and ensure that expectations are
realistic and achievable.
8.Empower Frontline Staff:
5. Empower your frontline employees (customer service representatives, store managers) to
resolve complaints promptly and within certain guidelines. Provide them with the authority
to make decisions when necessary.
9.Document the Complaint:
1. Record the details of the complaint, including the customer's name, contact information, description of
the issue, and any actions taken. This documentation can be valuable for tracking trends and ensuring
follow-up.
10.Follow Up:
2. After resolving the complaint, follow up with the customer to ensure their satisfaction. Ask if the
solution met their needs and if there are any additional concerns.
11.Learn and Improve:
3. Use consumer complaints as opportunities for improvement. Analyze the root causes of recurring
issues and implement changes to prevent similar problems in the future.
12.Train Staff:
4. Provide ongoing training to your staff on effective complaint handling and customer service. Equip
them with the skills and knowledge needed to address various issues.
13.Seek Feedback:
5. Encourage customers to provide feedback about their complaint resolution experience. This feedback
can help you refine your complaint-handling processes.
14.Monitor Trends:
6. Keep an eye on trends in complaints and feedback to identify systemic issues or areas that may require
attention.
15.Compliance with Regulations:
1. Ensure that your complaint-handling processes comply with relevant
regulations and industry standards, especially in highly regulated industries
like healthcare or finance.
16.Maintain Transparency:
2. Be transparent about the steps taken to resolve the complaint. Share
information about the investigation and actions taken with the customer.
17.Record Lessons Learned:
3. Use resolved complaints as opportunities to learn and improve your products,
services, and processes. Document lessons learned and share them with your
team to prevent future issues.
Concept of consumerism
• Consumerism is a social and economic ideology that places a strong
emphasis on the acquisition and consumption of goods and services as
a primary driver of personal and societal well-being. It is characterized
by an increased focus on purchasing and material possessions, often
with the belief that increased consumption leads to a higher quality of
life. Consumerism has several key components and implications:
1.Prolific Consumption: Consumerism encourages individuals and societies
to consume goods and services at high levels. It often promotes the idea that
more is better and that acquiring material possessions contributes to
happiness and fulfillment.
2.Advertising and Marketing: Consumerism is closely tied to advertising
and marketing, which play a significant role in shaping consumer desires
and preferences. Advertisers use various techniques to create demand for
products and influence purchasing decisions.
3.Materialism: Materialism is a central aspect of consumerism, where
individuals place a strong emphasis on the acquisition and possession of
physical objects. Material possessions are often seen as a measure of
success and status.
4.Disposable Culture: Consumerism can foster a "throwaway" culture where
products are quickly discarded in favor of newer or trendier ones. This can
lead to environmental concerns related to waste and resource depletion.
5.Credit and Debt: The desire for increased consumption can lead to a reliance on credit and
debt to finance purchases. Consumer debt can have long-term financial consequences for
individuals and households.
6.Globalization: Consumerism has been facilitated by globalization, allowing individuals to
access a wide range of products from around the world. This has both positive and negative
implications, including cultural homogenization and issues related to labor and production.
7.Environmental Impact: The excessive consumption associated with consumerism has
significant environmental consequences, including increased resource extraction, pollution, and
greenhouse gas emissions.
8.Social and Psychological Effects: Consumerism can impact individuals' self-esteem and
sense of identity. It can also contribute to a sense of "keeping up with the Joneses," where
people compare themselves to others based on material possessions.
9.Alternative Lifestyles: Some individuals and movements reject consumerism in favor of
alternative lifestyles, such as minimalism or sustainable living, which prioritize experiences and
relationships over material possessions.
10. Critiques and Concerns: Consumerism has been criticized for its contribution to social
inequality, its impact on mental health, and its role in perpetuating a culture of overconsumption
that is unsustainable in the long term.
Consumerism in India
• Consumerism in India has undergone significant growth and transformation over the past
few decades. India, with its large and diverse population, has become one of the world's
fastest-growing consumer markets. Several factors have contributed to the rise of
consumerism in India:
1.Economic Growth: India's economic liberalization in the early 1990s led to increased
economic growth, rising incomes, and a burgeoning middle class. This economic prosperity
has fueled consumer spending on a wide range of goods and services.
2.Urbanization: Rapid urbanization has led to the growth of urban centers and the emergence
of a sizable urban middle class with higher disposable incomes. Urban consumers have
greater access to a variety of products and services, including international brands.
3.Digital Transformation: The proliferation of smartphones and internet access has enabled
e-commerce and digital payments, making it easier for consumers to shop online and access
a broader range of products.
4.Globalization: India's integration into the global economy has exposed
consumers to international brands and trends. Global retailers and brands have
entered the Indian market, offering a wide array of choices.
5.Changing Consumer Preferences: Consumers in India have shown a shift
in preferences from traditional to modern products and lifestyles. They are
increasingly valuing convenience, quality, and branded products.
6.Youth Demographic: India has a significant youth population, which is more
receptive to consumer culture and global trends. Young consumers are more
likely to adopt new products and technologies.
7.Advertising and Marketing: Aggressive marketing and advertising
campaigns by companies have played a crucial role in creating consumer
aspirations and driving demand for products and services.
8.Financial Services: The expansion of financial services, including credit
cards, loans, and digital payment options, has made it easier for consumers to
finance their purchases and engage in consumption.
9.Real Estate Development: The growth of the real estate sector has
led to the construction of malls, shopping centers, and retail outlets,
providing consumers with more shopping choices and entertainment
options.
10.Increasing Disposable Income: Rising income levels and dual-
income households have resulted in higher disposable incomes, which
have contributed to increased consumer spending.
Reasons for growth of consumerism in india
• The growth of consumerism in India can be attributed to several interconnected
factors and trends that have shaped the country's economic and social landscape.
Here are some key reasons for the growth of consumerism in India:
1.Economic Liberalization: India's economic liberalization policies, initiated in
the early 1990s, opened up the economy to foreign investment, reduced trade
barriers, and deregulated various sectors. This led to increased economic growth,
job opportunities, and higher incomes for many Indians, especially in urban areas.
2.Rising Incomes: Economic growth and urbanization have led to rising incomes,
particularly in the middle class. A larger disposable income enables individuals
and households to spend more on non-essential goods and services.
3.Urbanization: Rapid urbanization has resulted in the growth of cities and urban
centers. Urban areas tend to have a higher concentration of consumers and
provide access to a broader range of products and services, including modern
retail outlets and entertainment options.
4.Expanding Middle Class: The growth of the middle class in India has been a
significant driver of consumerism. This segment of the population values lifestyle
improvements, convenience, and access to a wide array of products.
5.Digital Revolution: The widespread availability of smartphones and internet access
has revolutionized the way consumers in India shop and access information. E-
commerce platforms and digital payment methods have made it easier to shop online and
discover new products.
6.Globalization: India's integration into the global economy has exposed consumers to
international brands, trends, and lifestyles. Global companies have entered the Indian
market, offering a wide variety of choices to consumers.
7.Marketing and Advertising: The advertising and marketing industry in India has
played a significant role in shaping consumer preferences and creating demand for
products and services. Advertising campaigns often tap into consumer aspirations and
lifestyles.
8.Access to Credit: The expansion of financial services, including credit cards, personal
loans, and consumer finance options, has made it more convenient for consumers to
finance their purchases and engage in consumption.
9.Changing Demographics: India has a sizable youth population with changing
aspirations and preferences. Young consumers are more open to adopting new
products, technologies, and consumer experiences.
10.Real Estate Development: The growth of the real estate sector has led to the
construction of shopping malls, retail outlets, and entertainment complexes. These
developments provide consumers with more choices for shopping and leisure
activities.
11.Increased Awareness: As Indians become more aware of global trends and
lifestyle choices, they often seek to emulate aspects of Western consumer culture,
such as fashion, technology, and entertainment.
12.Aspiration and Status: Many consumers in India view the acquisition of
branded and premium products as a symbol of success and status. This aspirational
mindset drives consumerism.
13.Entrepreneurship and Innovation: The growth of Indian startups and
entrepreneurship has led to the development of new products and services, creating
additional consumption opportunities.
Question Bank