Chapter-1: Introduction to Consumer Behavior

Defining Consumer Behavior:

Consumer behavior may be defined as the decision process and physical activity individuals engage in when evaluating, acquiring, using, or disposing of goods and services. Several aspects of this statement need emphasis and elaboration so that their meaning can be more fully appreciated.

Customer and Consumer: The term customer is typically used to refer to someone who regularly purchases form a particular store or company. Thus a person who shops at Agora or who uses BP petrol is viewed as a customer of these firms. The term consumer more generally refers to any one engaging in any of the activities used in our definition of consumer behavior. Therefore, a customer is defined in terms of a specific firm while a consumer in not.

The Ultimate Consumer: Those individuals who purchase for the purpose of individual or household consumption. Some have argued that studying ultimate consumers also reveals much about industrial and intermediate buyers and others involved in purchasing for business firms and institutions. While not denying this, we must recognized that much industrial purchasing behavior is unique because it often involves different buying motives and the influence of a large variety of people. For the sake of simplicity we will focus only on ultimate consume behavior and will not become involved in drawing comparisons with industrial purchasing situations.

The Individual Buyer: The most commonly thought of consumer situation is that of an individual making purchase with little or no influence form others. However, in some cases a number of people can be jointly involved in a purchase decision (new car, vacation). People can take different roles in what we have defined as consumer behavior. These roles may be initiator: the individual who determines that some need or want is not being met and authorizes a purchase to rectify the situation; influencer: a person who by some intentional or unintentional word or action influences the purchase decision, the actual purchase, and/or the use of the product or service; buyer: the individual who actually makes the purchase transaction; user: the person most directly involved in the consumption or use of the purchase. Therefore, focusing on the buyer, while allowing for the influence of others on the purchase decision, still gives considerable flexibility while concentrating on one consumer role.

The Decision Process: Consumer behavior is seen to involve a mental decision process as well as physical activity. The actual act of purchase is just one stage in a series of mental and physical activities that occurring during a period of time. Some of these activities precede the actual buying, while others follow it. However, since all are capable if influencing the adoption of products or services, they will be considered as part of the behavior in which we are interested. The decision of switching a brand may be because of the general dissatisfaction with the result from the regular brand of from recent exposure to an advertisement for the competing brand or may be because of strong recommendation form friends. In some cases the time period is very short, while in other cases it can be quite long – year or more.

Why Study Consumer Behavior:

Understanding the reasons for studying a discipline enables one to better appreciate its contributions, therefore, this section presents a justification for the time and effort that the reader will expand in learning about consumers.

(i) Significance in Daly Lives: In a general sense, the most important reason for studying consumer behavior is the significant role it plays in our lives. Much of our time is spent directly in the marketplace, shopping or engaging in other activities. A large amount of additional time is spent thinking about products and services, talking to friends about them, and seeing or hearing advertisements about them. In addition, the goods we purchase and the manner in which we use significantly influence how we live our daily lives. These general concerns alone are enough to justify our study.

(ii) Application to Decision Making: Consumers are often studied because certain decisions are significantly affected by their behavior or expected actions. For this reason, consumer behavior is said to be an applied discipline. Such applications can exist at two different levels of analysis. The micro perspective seeks application of this knowledge to problems faced by the individual firm or organization. The social perspective applies knowledge of consumers to aggregate-level problems faced by large groups or by society as a whole.

Understanding consumer behavior form a macro perspective can provide insight into aggregate economic and social trends and can perhaps even predict such trends. In addition, this understanding may suggest ways to increase the efficiency of the market system and improve the well being of people in society.

Applying Consumer Behavior Knowledge:

The following sections have been made form a variety of practical applications in the field of consumer behavior. Some involves a societal perspective while others illustrate a micro viewpoint. Together they underscore the importance of understanding consumers for solving a variety of contemporary problems.

(i) Consumer behavior and marketing management: Marketing management is the process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges with target groups that satisfy customer and organizational objectives. A sound understanding of consumer behavior is essential to the long-run success of any marketing program. We need to know consumers’ wants and needs, company objectives and make an integrated strategy to achieve a firm’s objectives though consumer satisfaction. (a) Market opportunity analysis: this activity involves examining trends and conditions in the marketplace to identify consumers’ need and wants that are not being fully satisfied. (b) Target market selection: The process of reviewing market opportunities often results in identifying distinct groupings of consumers who have unique wants and needs, and (c) Marketing mix determination: this stage involves developing and implementing a strategy for an effective combination of want-satisfying features to consumers within target markets (product, price, promotion and place).

(ii) Consumer behavior and nonprofit and social marketing: Can crime prevention, charitable contributions or the concept of family planning be sold to people in much the same way that some business firms sell soap? Very often, nonprofit and social marketing companies appeal to the public for support in addition to attempting to satisfy some wants or need in society. A clear understanding of consume decision process can assist their effort.

(iii) Consumer behavior and governmental decision-making: In recent years the relevance of consumer-behavior principles to governmental decision-making has become quite evident. Two major areas of activity have been affected (a) government policies that provide services to the public or result in decisions that influence consumer behavior and (b) the design of legislation to protect consumer or to assist them evaluating products and services.

(iv) Consumer behavior and demarketing: The term demarketing refers to such efforts to encourage consumers to reduce their consumption of particular products or services  (e. g anti smoking campaign). Various government policies have supported the effort by private enterprise to stimulate the public to greater levels of consumption because of their favorable effect on economic development. However, it has become increasingly clear that we are entering an era of scarcity in terms of some natural resources such as oil, natural gas, and even water. These scarcities have led to promotions stressing conservation rather than consumption. 

(v) Consumer behavior and consumer education: Consumers also stand to benefit from orderly investigations of their own behavior. This can occur on an individual basis or as part of more formal educational program. What is learned about consumer behavior can also directly benefit consumers in a more formal sense. The knowledge can serve as data for the development of educational programs designed to improve consumers’ decision-making regarding products and services. Such courses are increasingly popular in higher education, which is based on a clear understanding of the important variables influencing consumers.

Studying Consumer Behavior:

The study of any subject is made easier by examining it in an organized fashion. Therefore, we should determine the general classes of variables influencing consumers’ behavior, understand the nature of these variables, and learn how to make inferences based on this knowledge. Three classes of variables are involved in understanding consumer behavior: stimulus, response, and intervening variables.

Modeling Behavior: The study of consumer behavior can also be quite complex, because of the many variables involved and their tendency to interact with and influence each other. Models of consumer behavior have been developed as a means of dealing with this complexity.

(i) External Variables: The external environment depicted in the outer circle is made up of six specific influences on other factors. The six specific influences are culture, subculture, social class, social group, family, and personal influences. The concept of culture has been characterized as, that complex whole that includes knowledge, belief, art, moral, law, custom, and any other capabilities and habits acquired by man as a member of society. Subculture is the emphasis on segments of a given culture that have values, customs, traditions, and other ways of behaving that are unique and that distinguish them from others sharing the same cultural heritage. Social class refers to the process by which people in a society rank one another into different social positions. A social group can be viewed as a collection of people who have a sense of relatedness resulting from some form of interaction with one another. The family is a special form of social group that is distinguished, at least in part, by numerous and strong face-to-face interactions among its members. The process of personal influence, which can be described as the effects on an individual resulting from communications with others, has long been of interest to marketers.

(ii) Individual Determinants: Major individual determinants of consumer behavior are portrayed in the inner ring. Personality and self-concept provide the consumer with a central them i.e., they provide a structure for the individual so that s consistent pattern of behavior can be developed. Motives are internal factors that energize behavior and provide guidance to direct the activated behavior. The term information processing refers to the activities that consumers engage in when acquiring, integrating, and evaluating information. What customers learn, how they learn, and what factors govern the retention of learned material in memory is crucial. Attitudes guide our basic orientation toward objects, people, events, and our activities.

(iii) The Decision Process: The major steps in the decision process are problem recognition, information search and evaluation, purchasing process, and post-purchase behavior. Post-purchase experiences result in feedback to the problem-recognition stage.

• Consumer Behavior @ Md. Akteruzzaman, Assistant Professor of Marketing, Chittagong University.