MODULE 1

Consumer behaviour:

consumer behaviour is the study of how individuals, groups and

organisations select buy, use and dispose of goods & services, ideas or experience to satisfy their
needs and wants. Studying consumer behaviour provide clues for improving or introducing product
and services, setting price, devising channel, crafting msz and developing other mkt activities.
A/C to belch & belch consumer behaviour is the process and activities people engage in when
searching for, selecting, purchasing, using, evaluating and disposing of products and services so as
to satisfy their needs and desires.
Characteristics of consumer behaviour: 1) systematic process 2) influenced by various Factors
3) different for different costumers 4) different for different products 5) varies across regions 6)
reflects status 7) Improves standard of living
8) undergoes a change 9) information
search 10) Brand loyalty 11) vital for marketers 12) Result in spread-effect.
Key Determinants Of Consumer Behaviours:
Psychological Factors: Psychological factors differ from individual to individual. The basic
Psychological factors that influence spending habits are follows: Motivation, Perception,
Learning, Attitudes.
Personal Factors: Personality, Self-Concept, Life Style, Demographic Factor.
Social Factors: Reference group, Family, Roles & Status.
Culture Factors:
SCOPE OF CONSUMER BEHAVIOUR:
1. Consumer behaviour & Marketing Management: effective business managers realize
the importance of the marketing to the success of their firms. Marketing defined as the
process of planning and executing the conception, pricing, promotion, and distribution of
ideas, goods & services to satisfy individual and org. objective A sound understanding of
consumer behaviour is essential to the long run success of any marketing program.
2. Consumer behaviour & non-profit & Social Marketing: many writers have suggest that
various social and non-profit org. can be viewed as having ideas or services that they are
attempting to market to target group of consumers or constituents. Clearly A sound
understanding of consumer behaviour & decision making can assist their efforts.
3. Consumer behaviour & Govt. Decision Making: 1. Govt services 2. Consumer protection
4. Consumer behaviour & Demarketing: the term DE marketing refers to all such efforts to
encourage consumers to reduce their consumption of a particular product or services.
5. Consumer behaviour & consumer education:
CONSUMER ROLES:- initiator, gatekeeper, influencer, Decider, buyer, User, Disposer,

IMPORTANCE OF CONSUMER BEHAVIOUR:

Production Policies
Price Policies
Decision regarding channel of distribution
Decision regarding sales promotion
Exploiting Marketing opportunities
Rapid introduction of New Products
Implementing the Marketing Concept
CONSUMER DECISION MAKING MODELS
A model is very often referred to as an abstract representation of a process or relationship. They
helps us in many waysThey help in development of theories, they help to understand complex relationship, they provide
framework for research. As the study of consumer behaviour evolved into a distinct newer
approaches were offered to describe and explain what influences consumer behaviour. The focus of
consumer decision making, especially on how individual consumers arrive at brand choices.
IMPLICATIONS OF CONSUMER DECISION MAKING MODELS:1. Knowledge of consumer behaviour 2. Understanding of hidden information 3. Knowledge of
consumer decision making process.

1. HOWARD-SHETH MODEL:

This model is slightly complicated and show that consumer behaviour is a complex process and
concept of learning, perception and attitude, influence consumer behaviour. This model is
applicable to individuals. This model basically serves two purposes: 1) it indicate how complex the
whole question of consumer behaviour really is.
2) It provide framework for including various
concept like learning, perception and attitude. Which influence consumer behaviour.

VARIABLES OF BUYER BEHAVIOUR

1) INPUT:- some inputs are necessary for the customer for making decisions. They are given
belowA. Significative Stimuli: these are physical tangible characteristics of the Product. These
are price, quality, distinctiveness, services rendered, availability of the products.
B. Symbolic Stimuli: these are same as significative characteristics, but they include the
perception of individuals, i.e. price high or low etc.
C. Social Stimuli: these are stimulus provided by family, friends, social groups and social
class.
2) OUTPUT: - by output we mean purchase decision. After purchase there is satisfaction or
dissatisfaction.
A. Purchase
B. Intension
C. Attitude
D. Brand comprehension
E. Attention
3) Perceptual and learning constructs:
A. Perceptual constructs: this refers to all complex states or psychological process
(perception) and how the individual deal with the information cues received from
various sources.
B. Learning constructs: these are more complex constructs in this theory. Motives refers to
the goals the individual attempt to achieve through his/her buying behaviour. These
goals derived from the various needs. More closely related to the buyers intension is
his attitude toward the Product/ Brand.
4) External variables: 1. Social and org. setting, 2. Social class, 3. culture, purchasing power.
IMPLICATION OF HOWARD-SETH MODEL:
1. It defines many of the variables which influences customers and give information about how
they interact with each other, which helps marketers in forming the market strategy.
2. It helps in different types of consumer problem solving and information search.
3. It also helps marketer to understand the outcomes of consumers decisions are more than
just purchase.

ENGEL-KOLLAT-BLACKWELL MODEL:
The EKB model is a multimediation model which shows both the components of decision making
and the multiples relationships and interactions among the components. It identifies five distinct
aspect of consumer decision making. Input, information processing, a decision process variables,
and external influences.
STEPS IN DECISION MAKING PROCESS:
1) Problem recognition: the consumer will recognise a difference between his or her actual
state and what the ideal state.
2) Information Search: in this stage the customer will try to search more information from
various sources.
3) Alternative Evaluation: Now the individual will evaluate the various alternative brands.
4) Choice: the consumer choice depends on his/her intension and attitude.
5) Outcome: the outcome may be either positive or negative.
IMPLICATION OF EKB MODEL:- the EKB model has taken into consideration a large no. of
variables , which influences the consumers. The model has emphasised on the conscious decision
making process adopted by a consumers. This model is easy to understand and flexible. It
recognise that consumer may not go through all the steps always.
1) It focused on the level of consumer involvement and it emphasises on the decision making
process regarding purchases which helps marketers in assessing the products significance to
consumers.
2) It incorporates numerous theories regarding information processing, motivation and change
of attitude of customers, which help the marketers in innovating the products accordingly.

NICOSIA MODEL
Nicosia was one of the first consumer behaviour modellers to shift focus from the act of purchase
itself to the more complex decision process that consumer engage in about products and services.
The Nicosia models try to explain buying behaviour by establishing a link between the
organisations and its consumers. The model state that message from the firm first influences the
consumer toward the product and services. Based upon the situation the customer will have certain

attitude toward the product or services. This may result in search for the product or an evaluation
of the product attributes by consumer. If the above satisfy the consumer, it may result in a positive
response. Otherwise negative.
ELEMENTS OF NICOSIA MODEL:
1) Field one: - field one has two sub area the consumer attribute and the firms attributes.
Adv. Msz sent from the firm will reach the consumers attributes. Depending on the way, the
message is received by the consumer, a certain attribute may develop.
2) Field two: - the second field is related to the search and evaluation undertaken by the
consumers.
3) Field three: - the third area explains how consumer actually by the product.
4) Field four: - area four related to the uses of the purchased items.
IMPLICATION OF NICOSIA MODEL:1. It enhance knowledge about the customers which is very help full for marketers.
2. It focused on decision making process of consumers.

MODULE 2
CONSUMER PERCEPTION:

Perception is psychological mediation. It refers to the

process of organizing and interpreting sensory information.
Perception is the process in which the brain selects, organizes, and interprets neural messages
into a psychological experience on the basis of cognitive ability and socio-cultural values
governing in the society .We are aware of the meanings that brain generates from sensory
information.
Perception enables us to recognize meaningful objects, pictures, faces, language, etc & interpret
the same the way we want.
ELEMENTS OF PERCEPTION:Sensation drives perception:- Marketing science behind perception management is to
identify right sensory stimuli which would invoke desired decision within consumer ( logical or
abstract ) . This depends on the positioning objective. Sensory stimuli are Visual, Audio, Taste,
Smell, Touch etc.
While Sensation is a physical process of converting stimulus energies, without sensation, there
would not be perception. Perception co-relates, integrates & comprehends the various
sensations & information received. It is formed by both physiological & psychological factors.
Absolute thresholds:- A threshold refers to a dividing point between energy levels that do
and do not have a detectable effect. As the stimulus intensity increases, the probability of
detecting a stimulus also increases. Absolute thresholds define the boundaries of sensory
capabilities. An absolute threshold refers to the intensity level at which the probability of
detection is 50 percent.
Just Noticeable Difference:- JND refers to the smallest difference in the amount of
stimulation that a specific sense can detect.
Subliminal perception: - Subliminal perception refers to below threshold. Subliminal
perception is the registration of sensory input without conscious awareness. Subliminal
perception techniques are used by media to grab the attention using money, sex as strong
stimulator.
PROCESS OF PERCEPTION:
Perceptual selection:- consumer will pick and choose marketing stimuli based on their needs
and attitude. A car buyer will be more attentive to car ads. Steps in perceptual selection are
Exposer, Attention, and Selective Perception.
Perceptual organisation:- perceptual organisation emphasizes on subsequent activities that
takes place in the perceptual process after the stimuli received.
Perceptual interpretation:- the interpretation of stimuli is also uniquely individual, bcoz it is
based on what individual expect to see in the light of their previous experiences.
Perceptual distortion:- individual are subject to a no. of influences that tend to distort their
perception such as: physical appearance, stereotype, first impression, jumping to conclusion,
and halo effect.

FACTORS INFLUENCING PERCEPTION:

1. Internal factors: needs & Motives, self-concept, beliefs, past experience, expectations,
current psychological state.
2. External factors: size, intensity, frequency, status, contrast.
3. Factors in situation.
INFLUENCE OF PERCEPTION ON CONSUMER BEHAVIOUR:
1.
2.
3.
4.

Forms decision about company or product

Perception about risk
Increase brand loyalty
Helps in noticing the difference

Managerial application of perception: stress, employment interview, performance expectations,

performance evaluation, employee loyalty.

CONSUMER LEARNING:

A process by which a consumer acquires the purchase &

consumption knowledge experience which apply to his future behavior.
Principle elements /Components of learning process are:
Motivation: motivation depends on goals & needs and it stimulate learning.
Clue: An object in the stimuli which capable of providing direction to motivated activity.
Response: Behavioral response in the form of physical terms, Attitudes, Perception etc.
Reinforcement: Environmental events which increases the psychological process of
motivation, increasing the likelihood of specific response.
Retention: Stability of learned behavior over a period of time.

Influence of learning in consumer behavior:

Recognition and recall: after exposure to an advertisement, consumer may experience
varying degree of awareness.
Cognitive responses to advertising: another response of learning on consumer is the
degree to which consumer accurately comprehend the intended advertising message.
Attitudinal and behavioural measures of brand loyalty:
Brand Equity: brand equity defined as the stored value built up in a brand for achieving
competitive advantage. Brands are valued for their equity. Brands add value.

CONSUMER INVOLVEMENT: Consumer Involvement refers to degree of information

processing or extent of importance that a consumer attaches to a product. The degree of
involvement has a very significant effect on consumer behavior. When more expensive product
are to be purchased, the consumer gets more involvement.
To the extent that consumer is involved, the consumer acts to minimize the risk and to
maximize the benefits gain from purchase and use.
Factors influencing consumer involvement:

Previous experience
Interest
Situation
Social visibility
Perceived risk

Categories of consumer involvement:

1. High involvement:
High involvement/rational:in this categories one finds expensive business
purchases.
High involvement/emotional:- business purchases in this categories include such
things as office design, advertising, hiring employees etc.

2. Low involvement
Low involvement/rational:- these are things one bye out of habits, without much
thought.
Low involvement/emotional:- these are products in which one gets emotions or
feelings. It does not last as long time. So one cannot spend lot of time thinking about
the purchase.

CONSUMER ATTITUDE: In consumer behaviour context, attitude is a learned pre deposition

to behave in a consistently favourable or unfavourable way with respect to a given stimuli. (Brand)
Learned deposition refers to information source, perception, experience, exposure to media etc.
which helps to build an attitude & gives momentum to the behaviour. The momentum can be
negative or positive. Attitudes are likes or dislikes.
Characteristics: attitude extremity, direct-indirect experience, accessibility, embeddedness,
evaluative consistency.
Functions: adjustment, knowledge, value-expressive, Ego-defence.
Sources of influence on attitude formation: direct & past experience, direct marketing,
exposure of mass media, personality factors, direct personal experience, social learning, and
association.
Influence of attitude on consumer behaviour: Negative learned attitude, positive learned
attitude, Negative Experience attitude, Positive experience attitude.

MODULE 3
Group dynamics:

group dynamics deals with internal nature of groups, how they are formed,
what structure and processes they adopt, how they function and affect individual members, other
groups and the organisation.
Nature: concerned with group, dynamic, rigidity or flexibility, continues process, defines
effectiveness of leader.
Components of group dynamics:
Group norms: all group have established norms- i.e. acceptable standards of behaviour
that are shared by the group members.
Group role: all members are playing a role. By the term role, one means a set of expected
behaviour patterns attributed to someone occupying a given position in a social unit.
Group status: it is a socially defined position or rank given to group or group members by
others.
Group size: smaller groups are faster at completing task than larger ones and individuals
perform better in smaller groups than in larger ones.
Group leadership
Group composition

CULTURE: -

Culture is part of the external influences that impact the consumer. Culture
represents influences that are imposed on the consumer by other individuals. Culture is a complex
study which includes knowledge, belief, art, morals, custom, and any other capabilities and habits
acquired by a person as a member of society Culture, as a "complex whole," is a system of
interdependent components.

Culture has several important characteristics:

(1) Culture is comprehensive. This means that all parts must fit together in some logical fashion.
(2) Culture is learned rather than being something we are born with.

(3) Culture is manifested within boundaries of acceptable behavior.

(4) Culture is gratifying & persistent.
(5) Culture is integrated & organized.
(6) Culture is acquired.

SUB CULTURE:

sub culture is defined as broad groups of consumer within a societys culture

having similar values which distinguish them from the rest of society. A subculture is a group of
people with a culture which differentiate them from larger culture to which they belongs.

Types: nationality sub-culture, Religious sub culture, geographic and regional sub culture, age sub
culture, sex as sub culture.
Impact of sub-culture on consumer behavior:

Unique traditions and behaviours

Religious affiliation
Urban sub urban rural distinctions
Consumption per age group

CROSS CULTURE CONSUMER BEHAVIOUR:

More aware
Well informed
Quality conscious
Recognizing global brand
Informed about international currencies

Module 4
Personal influences:

consumers purchase decision also influence by his personal

characteristics such as age, sex, and stage in family life-cycle, education, occupation, income, his
overall personality and overall self-concept.
Strength of word-of-mouth communication:- cost effectiveness, speed, easy to set-up,
effectively target market, boosts brand awareness, global spread.
Weakness of word-of-mouth communication:- negative wom, human error, selective
attention, customer dissatisfaction, competition prone.
Opinion leadership: one of those people, who provides information about the product or
product categories, whether it would useful to buy, how it would we used. He/she would also offer
advice as to which of several brands is best and where it should be bought. This person known as
opinion leader and tis process known as opinion leadership.
Opinion leader is individual whose ideas and behavior serve as a model to others. & opinion
leadership is a process by which the opinion leader influence the action or attitude of others.
PROCESS OF OPINION LEADERSHIP:
1. Two step flow of communication:- in this the opinion leader are the direct receivers of
information from advertisement. And then they interpret and transmit information to others
through WOM.
Mass Media------> Opinion leaders------> Opinion receivers.
2. Multi step flow of communication:- in this model the information can flow directly to
different types of consumers , including opinion leaders, gatekeepers, and opinion seekers.
Types of opinion leaders:- generalized opinion leaders , market mavens, surrogate buyer,
purchase pals.
Influence of opinion leaders on consumer behaviours:- product involvement, selfinvolvement, message involvement, other.

Impact of firms Promotional strategy on Opinion leadership: Advertising

Negative wom
Marketing research
Product sampling

 Retailing /personal selling

Identifying opinion leaders

CONSUMER DECISION MAKING PROCESS:Pre-purchase process:- problem recognition, information search stage, evaluation of alternatives
stage.
Purchasing process:- brand loyalty, Impulse purchasing.
Post-purchase process:- consumption and Evaluation, consumer satisfaction/dissatisfaction

DIFFUSION OF INNOVATIONS:- diffusion of innovation is the process by which the use of an

innovation is spread within a market group over time and over various categories of adopters. It
describes how a product is adopted by marketplace and what factors can influence the rate of
adoption.
DIFFUSION PROCESS: diffusion is the process by which an innovation is communicated through
certain channels over time among the members of a social system.
ELEMENTS:- innovation, communication channel, social system, time
Factors influencing rate of diffusion:- type of group, type of decision, marketing
efforts, fulfillment of felt need, relative advantage, compatibility, complexity, trial ability, observe
ability, cost.
ADOPTION PROCESS:- adoption process focuses on the mental process through which an
individual passes from learning about an innovation to the final adoption .
Stages In adoption process: awareness, attitude, legitimation, trial, adoption.
Factors influencing adoption process:Innovation characteristics: relative advantage, compatibility, divisibility, communicability
Organisations: environment,, education level, size, profit, age, management

People:
Personal influence