CONSUMER BEHAVIORCONSUMER BEHAVIORCHAPTER # 1CHAPTER # 1STST

INTRODUCTION AND OBJECTIVES OF INTRODUCTION AND OBJECTIVES OF THIS CHAPTERTHIS CHAPTER::IN THIS FIRST CHAPTER, WE ARE GOING IN THIS FIRST CHAPTER, WE ARE GOING TO DISCUSS THREE MAIN AREAS, WHICH TO DISCUSS THREE MAIN AREAS, WHICH ARE:ARE:DEFINING THE NATURE OF CONSUMER DEFINING THE NATURE OF CONSUMER BEHAVIORBEHAVIORAPPRECIATING WHY WE SHOULD STUDY APPRECIATING WHY WE SHOULD STUDY CONSUMER BEHAVIORCONSUMER BEHAVIORDEVEOLPING A FRAMEWORK FOR DEVEOLPING A FRAMEWORK FOR STUDYING CONSUMER BEHAVIORSTUDYING CONSUMER BEHAVIOR

DEFINITION OF CONSUMER DEFINITION OF CONSUMER BEHAVIORBEHAVIOR

THE DECISION PROCESS AND THE DECISION PROCESS AND PHYSICAL ACTIVITY INDIVIDUALS PHYSICAL ACTIVITY INDIVIDUALS ENGAGE IN, WHEN EVALUATING, ENGAGE IN, WHEN EVALUATING, ACQUIRING, USING OR DISPOSING OF ACQUIRING, USING OR DISPOSING OF GOODS AND SERVICES.GOODS AND SERVICES.

NOW WE NEED TO UNDERSTAND NOW WE NEED TO UNDERSTAND SOME BASIC TERMINOLOGIES, SOME BASIC TERMINOLOGIES, WHICH WE WILL BE USING IN THIS WHICH WE WILL BE USING IN THIS SUBJECT:SUBJECT:

CONSUMER & CONSUMER & CUSTOMER………..CUSTOMER………..

CONSUMER:CONSUMER: A PERSON WHO REGULARLY A PERSON WHO REGULARLY

PURCHASES PRODUCTS,CONSUME IT PURCHASES PRODUCTS,CONSUME IT OR HIRE SERVICES FROM A OR HIRE SERVICES FROM A PARTICULAR STORE OR SERVICE PARTICULAR STORE OR SERVICE PROVIDER. E.G, YOU DAILY OR SAY PROVIDER. E.G, YOU DAILY OR SAY AFTER 2 DAYS USE TO FILL YOUR AFTER 2 DAYS USE TO FILL YOUR CAR AT SHELL GAS STATION, IN THIS CAR AT SHELL GAS STATION, IN THIS CASE YOU WILL BE CONSIDERED AS CASE YOU WILL BE CONSIDERED AS CONSUMER OF SHELL COMPANY.CONSUMER OF SHELL COMPANY.

CUSTOMERCUSTOMER

CUSTOMER:CUSTOMER: TRADITIONALLY CUSTOMERS ARE TRADITIONALLY CUSTOMERS ARE

DEFINED AS THE PURCHASERS OF DEFINED AS THE PURCHASERS OF PRODUCTS AND SERVICES OFFERED PRODUCTS AND SERVICES OFFERED FOR SALE.FOR SALE.

ULTIMATE CONSUMER/END USER:ULTIMATE CONSUMER/END USER: THOSE PERSONS WHO PURCHASES THOSE PERSONS WHO PURCHASES

FOR THE PURPOSE OF INDIVIDUAL FOR THE PURPOSE OF INDIVIDUAL OR HOUSE HOLD CONSUMPTION.OR HOUSE HOLD CONSUMPTION.

INITIATOR/IFLUENCERS/INITIATOR/IFLUENCERS/BUYERSBUYERS

THE INDIVIDUAL BUYERS:THE INDIVIDUAL BUYERS: MOST OF THE TIMES AN IDIVIDUAL MOST OF THE TIMES AN IDIVIDUAL

MAKES PURCHASE DECISION WITH MAKES PURCHASE DECISION WITH LITTLE OR NO INFLUENCES FROM LITTLE OR NO INFLUENCES FROM OTHERS, HOWEVER, IN SOME CASES, OTHERS, HOWEVER, IN SOME CASES, A NUMBER OF PEOPLE CAN BE A NUMBER OF PEOPLE CAN BE JOINTLY INVOLVED IN A PURCHASE JOINTLY INVOLVED IN A PURCHASE DECISION, IN THIS CASE, DIFFERENT DECISION, IN THIS CASE, DIFFERENT CONSUMER BEHAVIOR ROLES CONSUMER BEHAVIOR ROLES WOULD BE:WOULD BE:

CONT………CONT………

INITIATOR:INITIATOR: AN INDIVIDUAL WHO IDENTIFIES A AN INDIVIDUAL WHO IDENTIFIES A

NEED, OR PRACTICALLY INITIATES A NEED, OR PRACTICALLY INITIATES A PURCHASE DESCISION, E.G, A WIFE PURCHASE DESCISION, E.G, A WIFE MAY ASK HER HUSBAND TO MAY ASK HER HUSBAND TO PURCHASE A PACK OF CEREAL, AS PURCHASE A PACK OF CEREAL, AS THEIR BABY AGE HAS INCREASED TO THEIR BABY AGE HAS INCREASED TO 6 MONTHS, AND NOW IT’S AN 6 MONTHS, AND NOW IT’S AN ESSENTAIL FOOD REQIREMENT FOR ESSENTAIL FOOD REQIREMENT FOR HIM.HIM.

CONT……………CONT…………… THE INFLUENCER:THE INFLUENCER: THE PERSON WHO INSPIRES, AFFECT OR THE PERSON WHO INSPIRES, AFFECT OR

GUIDES A PARTICULAR PURCHASING GUIDES A PARTICULAR PURCHASING DECISION, E.G, IN PREVOIUS EXAMPLE DECISION, E.G, IN PREVOIUS EXAMPLE WIFE ROLE WAS OF BOTH AS AN INITIATOR WIFE ROLE WAS OF BOTH AS AN INITIATOR AND INFLUENCER.AND INFLUENCER.

BUYER:BUYER: THE PERSON WHO ACTUALLY MAKES THE THE PERSON WHO ACTUALLY MAKES THE

PURCAHSE DECISION. E.G, IN THE PURCAHSE DECISION. E.G, IN THE PREVIOUS EXAMPLE THE HUSBAND ROLE PREVIOUS EXAMPLE THE HUSBAND ROLE WAS OF A BUYER.WAS OF A BUYER.

USER:USER: THE PERSON WHO REALLY OR THE PERSON WHO REALLY OR

PRACTICALLY USES THE PRODUCTS OR PRACTICALLY USES THE PRODUCTS OR CONSUME THE SERVICES.CONSUME THE SERVICES.

THE DECISION PROCESS:THE DECISION PROCESS: CONSUMER BEHAVIOR INVOLVES A CONSUMER BEHAVIOR INVOLVES A

MENTAL DECISION PROCESS AS WELL MENTAL DECISION PROCESS AS WELL AS PHYSICAL ACTIVITY,i.e, ACTUAL AS PHYSICAL ACTIVITY,i.e, ACTUAL PURCHASE PURCHASE

CONT……..CONT……..

IS JUST ONE STAGE, IN SERIES OF MENTAL IS JUST ONE STAGE, IN SERIES OF MENTAL AND PHYSICAL ACTIVITES THAT OCCUR AND PHYSICAL ACTIVITES THAT OCCUR DURING A PERIOD OF TIME. SOME OF DURING A PERIOD OF TIME. SOME OF THESE ACTIVITES TAKE PLACE BEFORE THESE ACTIVITES TAKE PLACE BEFORE ACTUAL BUYING WHILE OTHER FOLLOW IT.ACTUAL BUYING WHILE OTHER FOLLOW IT.

WHY STUDY CONSUMER BEHAVIOR:WHY STUDY CONSUMER BEHAVIOR: SIGNIFICANCE IN DAILY LIVES:SIGNIFICANCE IN DAILY LIVES: CONSUMER BEHAVIOR HAS GOT SO MUCH CONSUMER BEHAVIOR HAS GOT SO MUCH

IMPORTANCE IN OUR DALIY LIFE, MOST OF IMPORTANCE IN OUR DALIY LIFE, MOST OF

THE TIMES WE AS AN INDIVIDUAL HAVE THE TIMES WE AS AN INDIVIDUAL HAVE TO DECIDE ABOUT VARIUOS PURCHASE TO DECIDE ABOUT VARIUOS PURCHASE DECISIONS, THINKING ABOUT VARIOUS DECISIONS, THINKING ABOUT VARIOUS PRODUCTS AND SERVICES, TALKING TO PRODUCTS AND SERVICES, TALKING TO FRIENDS ABOUT THEM, SEEING OR FRIENDS ABOUT THEM, SEEING OR HEARING ADVERTISEMENTS, SO IT HEARING ADVERTISEMENTS, SO IT PLAYS A VERY VITAL ROLE IN PLAYS A VERY VITAL ROLE IN UNDERSTANDING THE BUYING UNDERSTANDING THE BUYING BEHAVIOR OF INDIVIDUALS.BEHAVIOR OF INDIVIDUALS.

22. APPLICATION IN DECISION MAKING:. APPLICATION IN DECISION MAKING: COSUMER BEHAVIOR SUBJECT IS COSUMER BEHAVIOR SUBJECT IS

ALWAYS VIEWED AS A AN APPLIED ALWAYS VIEWED AS A AN APPLIED DISCIPLINE, WHICH MEANS THAT IT HAS DISCIPLINE, WHICH MEANS THAT IT HAS APPLICATION BOTH TO PERSONS IN APPLICATION BOTH TO PERSONS IN INDIVIDUAL CAPACITY, AND TO WHOLE INDIVIDUAL CAPACITY, AND TO WHOLE SOCIETY.PEOPLE USED TO APPLY THIS SOCIETY.PEOPLE USED TO APPLY THIS WHILE MAKING A PURCHASING WHILE MAKING A PURCHASING DECISIONS INDIVIDUALLY OR SOCAILLY.DECISIONS INDIVIDUALLY OR SOCAILLY.

A. MICRO PERSPECTIVE:A. MICRO PERSPECTIVE: IT REFERS TO UNDERSTANDING THE IT REFERS TO UNDERSTANDING THE

CONSUMERS FOR THE PURPOSE OF CONSUMERS FOR THE PURPOSE OF HELPING A FIRM OR ORGANIZATION HELPING A FIRM OR ORGANIZATION TO ACCOMPLISH ITS OBJECTIVES, TO ACCOMPLISH ITS OBJECTIVES, E.G, ADVERTISING MANAGERS, E.G, ADVERTISING MANAGERS, PRODUCT DESIGNERS ARE PRODUCT DESIGNERS ARE INTRESTED TO UNDERSTAND INTRESTED TO UNDERSTAND CONSUMERS IN ORDER TO BE MORE CONSUMERS IN ORDER TO BE MORE EFFECTIVE AT THEIR TASK.EFFECTIVE AT THEIR TASK.

B. B. SOCIETAL PERSPECTIVE:SOCIETAL PERSPECTIVE: WE NEED TO KNOW THE ECONOMIC, AND WE NEED TO KNOW THE ECONOMIC, AND

SOCIAL CONDITIONS WITH IN A SOCIETY, SOCIAL CONDITIONS WITH IN A SOCIETY, OR WE NEED TO KNOW THE CULTURE, OR WE NEED TO KNOW THE CULTURE, RELIGION, BUYING PATTERNS, RELIGION, BUYING PATTERNS, PREFERENCES OF INDIVIDUALS LIVING IN A PREFERENCES OF INDIVIDUALS LIVING IN A PARTICULAR SOCIETY, AND KEEPING PARTICULAR SOCIETY, AND KEEPING WHICH IN MIND WE FORMULATE AND WHICH IN MIND WE FORMULATE AND IMPLEMENT OUR STRATEGIES IMPLEMENT OUR STRATEGIES ACCORDINGLY.ACCORDINGLY.

APPLYING CONSUMER APPLYING CONSUMER BEHAVIOR KNOWLEDGEBEHAVIOR KNOWLEDGE

THE UNDERSTANDING OF CONSUMER THE UNDERSTANDING OF CONSUMER BEHAVIOR PROVIDES A BROADER BEHAVIOR PROVIDES A BROADER OUTLOOK, IN UNDERSTANDING OTHER OUTLOOK, IN UNDERSTANDING OTHER SUBJECTS AS WELL, LETS DISCUSS:SUBJECTS AS WELL, LETS DISCUSS:

CONSUMER BEHAVIOR AND MARKETING CONSUMER BEHAVIOR AND MARKETING MANAGEMENT:MANAGEMENT:

MARKETING MANAGEMENT AND MARKETING MANAGEMENT AND UNDERSTANDING CONSUMER BEHAVIOR, UNDERSTANDING CONSUMER BEHAVIOR, THEY ARE TWO VERY CLOSELEY THEY ARE TWO VERY CLOSELEY CONNECTED THINGS, A MARKETING CONNECTED THINGS, A MARKETING MANAGER NEEDS TO UNDERSTAND MANAGER NEEDS TO UNDERSTAND CONSUMER BEHAVIOR IN OREDER TO:CONSUMER BEHAVIOR IN OREDER TO:

UNDERSTAND CONSUMERS NEEDS UNDERSTAND CONSUMERS NEEDS AND WANTS:AND WANTS:

SPECIFYING COMPANY OBJECTIVES:SPECIFYING COMPANY OBJECTIVES: MAKING AN INTEGRATED STRATEGY, MAKING AN INTEGRATED STRATEGY,

KEEPING IN MIND THE CONSUMER KEEPING IN MIND THE CONSUMER PREFERENCES AND BEHAVIOR AND PREFERENCES AND BEHAVIOR AND OVERALL COMPANY RESOURCES AND OVERALL COMPANY RESOURCES AND OBJECTIVES:OBJECTIVES:

MARKET OPPORTUNITY ANALYSIS:MARKET OPPORTUNITY ANALYSIS: TARGET MARKET SELECTION:TARGET MARKET SELECTION: MARKETING MIX DTERMINATION:MARKETING MIX DTERMINATION: PRODUCTPRODUCT WHAT PRODUCTS TO PRODUCE?WHAT PRODUCTS TO PRODUCE? WHERE TO PRODUCE?WHERE TO PRODUCE? HOW TO PRODUCE?HOW TO PRODUCE? WHEN TO PRODUCE?WHEN TO PRODUCE?

FOR WHOM TO PRODUCE?FOR WHOM TO PRODUCE? PRICEPRICE WHAT SHOULD BE THE PRICING WHAT SHOULD BE THE PRICING

STRATEGY?STRATEGY? PLACEPLACE WHAT AND HOW SHOULD BE THE WHAT AND HOW SHOULD BE THE

DISTRIBUTIONAL SET UP?DISTRIBUTIONAL SET UP? PROMOTIONPROMOTION

HOW THE PROMTIONAL EFFORTS BE HOW THE PROMTIONAL EFFORTS BE DESIGNED, THE ADVERTISING DESIGNED, THE ADVERTISING CAMPAIGN?.CAMPAIGN?.

CONCLUSIONCONCLUSION IN THIS ERA OF COMPETITION, IN THIS ERA OF COMPETITION,

UNDERSTANDING THE CONSUMER IS A UNDERSTANDING THE CONSUMER IS A NECESSITY FOR MARKETERS. NECESSITY FOR MARKETERS. CONSUMER NEEDS AND PREFERENCES CONSUMER NEEDS AND PREFERENCES ARE CONTINUOUSLY CHANGING, ARE CONTINUOUSLY CHANGING, GIVEN THE CHANGES IN FACTORS GIVEN THE CHANGES IN FACTORS LIKE DEMOGRAPHICS AND LIKE DEMOGRAPHICS AND LIFESTYLES. THESE CHANGES CAN LIFESTYLES. THESE CHANGES CAN BECOME GREAT BUSINESS BECOME GREAT BUSINESS OPPORTUNITIES FOR ALERT OPPORTUNITIES FOR ALERT MARKETERS AND THREATS FOR MARKETERS AND THREATS FOR MARKETERS WHO FAIL TO ADAPT. MARKETERS WHO FAIL TO ADAPT.

CONSUMERS ACQUIRE, CONSUME, CONSUMERS ACQUIRE, CONSUME, AND DISPOSE OFF THE PRODUCTS AND DISPOSE OFF THE PRODUCTS AND SERVICES CREATED BY AND SERVICES CREATED BY ORGANIZATIONS. THEY GO THROUGH ORGANIZATIONS. THEY GO THROUGH SEVERAL COGNITIVE AND BEHAVIORAL SEVERAL COGNITIVE AND BEHAVIORAL PROCESSES WHILE MAKING THEIR PROCESSES WHILE MAKING THEIR PURCHASE AND CONSUMPTION PURCHASE AND CONSUMPTION DECISIONS. THE KNOWLEDGE OF HOW DECISIONS. THE KNOWLEDGE OF HOW THEY DECIDE ON ONE BRAND INSTEAD THEY DECIDE ON ONE BRAND INSTEAD OF ANOTHER AND WHAT FACTORS OF ANOTHER AND WHAT FACTORS INFLUENCE THEIR DECISION-MAKING INFLUENCE THEIR DECISION-MAKING IS CRUCIAL FOR MARKETERS, NOT IS CRUCIAL FOR MARKETERS, NOT ONLY TO CATER TO THE EXISTINGONLY TO CATER TO THE EXISTING

NEEDS OF THEIR CONSUMERS BUT NEEDS OF THEIR CONSUMERS BUT ALSO TO PREPARE FOR THEIR ALSO TO PREPARE FOR THEIR FUTURE NEEDS. THIS KNOWLEDGE IS FUTURE NEEDS. THIS KNOWLEDGE IS ALSO ESSENTIAL TO MAKE VARIOUS ALSO ESSENTIAL TO MAKE VARIOUS BUSINESS DECISIONS RELATED TO BUSINESS DECISIONS RELATED TO PRODUCT DEVELOPMENT, PRODUCT DEVELOPMENT, PACKAGING, PRICING, PACKAGING, PRICING, DISTRIBUTION, PROMOTIONS, DISTRIBUTION, PROMOTIONS, COMMUNICATION, ETC. COMMUNICATION, ETC.

CONSUMER BEHAVIORCONSUMER BEHAVIOR HELPS HELPS STUDENTS UNDERSTAND THE INTERNAL STUDENTS UNDERSTAND THE INTERNAL VARIABLES LIKE MOTIVATION, VARIABLES LIKE MOTIVATION, PERSONALITY, PERCEPTION, LEARNING, PERSONALITY, PERCEPTION, LEARNING, AND ATTITUDE, AND EXTERNAL AND ATTITUDE, AND EXTERNAL VARIABLES LIKE REFERENCE GROUPS, VARIABLES LIKE REFERENCE GROUPS, FAMILY, SOCIAL CLASS, AND, CULTURE, FAMILY, SOCIAL CLASS, AND, CULTURE, AND THEIR INFLUENCE ON CONSUMER AND THEIR INFLUENCE ON CONSUMER DECISION-MAKING PROCESS. IT ALSO DECISION-MAKING PROCESS. IT ALSO DISCUSSES THE CONSUMERS’ DISCUSSES THE CONSUMERS’ ACCEPTANCE OF INNOVATION, AND ACCEPTANCE OF INNOVATION, AND THEIR PURCHASE AND POST-PURCHASE THEIR PURCHASE AND POST-PURCHASE

BEHAVIOR. THE IMPACT OF MARKETING BEHAVIOR. THE IMPACT OF MARKETING COMMUNICATION ON CONSUMERS, AND COMMUNICATION ON CONSUMERS, AND THE NEED FOR ITS REGULATION HAVE THE NEED FOR ITS REGULATION HAVE ALSO BEEN DISCUSSED IN THE BOOK. ALSO BEEN DISCUSSED IN THE BOOK.

““WE CAN BELIEVE THAT WE KNOW WE CAN BELIEVE THAT WE KNOW WHERE THE WORLD SHOULD GO. BUT WHERE THE WORLD SHOULD GO. BUT UNLESS WE'RE IN TOUCH WITH OUR UNLESS WE'RE IN TOUCH WITH OUR CUSTOMERS, OUR MODEL OF THE CUSTOMERS, OUR MODEL OF THE WORLD CAN DIVERGE FROM REALITY. WORLD CAN DIVERGE FROM REALITY. THERE'S NO SUBSTITUTE FOR THERE'S NO SUBSTITUTE FOR INNOVATION, OF COURSE, BUT INNOVATION, OF COURSE, BUT INNOVATION IS NO SUBSTITUTE FOR INNOVATION IS NO SUBSTITUTE FOR BEING IN TOUCH, EITHER”.BEING IN TOUCH, EITHER”.