Introduction

Consumer behavior is the study of how individual customers, groups or organizations select, buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the consumers in the marketplace and the underlying motives for those actions.

Marketers expect that by understanding what causes the consumers to buy particular goods and services, they will be able to determine—which products are needed in the marketplace, which are obsolete, and how best to present the goods to the consumers.

The study of consumer behavior assumes that the consumers are actors in the marketplace. The per­spective of role theory assumes that consumers play various roles in the marketplace. Starting from the information provider, from the user to the payer and to the disposer, consumers play these roles in the decision process.

The roles also vary in different consumption situations; for example, a mother plays the role of an influencer in a child’s purchase process, whereas she plays the role of a disposer for the products consumed by the family.

  The types of behavior that different consumers demonstrate in buying and using the same product and the different types of behavior that the same consumer demonstrate in buying different products elevates marketing to a discipline much more intricate than product management. Even the same customer may not behave in an equivalent fashion, while buying the same product under varying circumstances.

By studying the behavior of the customers it becomes possible to segment the market in new ways and serve them with different marketing mix strategies.

To understand marketing, one must understand buying behavior as marketing success or failure depends on target customers individual and group reactions expressed in the form of buying patterns. Consumers make many buying decisions every day, and the buying decision is focal point of the marketer’s effort.

Consumer behavior focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption-related items that includes what they buy, why they buy, when they buy it, where they buy it, how often they buy it, how often they use it, how they evaluate it after the purchase and the impact of such evaluations on future purchases, and how they dispose of it.

Marketers can study actual consumer purchase to find out what they buy, where, and how much. But learning about the whys of consumer buying behavior is not so easy – the answers are often locked deep within the consumers mind. Often the consumers themselves do not know exactly what influences their purchases.

The central question for marketers is: How do consumers respond to various marketing efforts the company might use? The starting point is the stimulus-response model of buyer behavior as shown in following figure

Definition of consumer behavior

According to Engel, Blackwell, and Mansard, ‘consumer behavior is the actions and decision processes of people who purchase goods and services for personal consumption’.

According to Louden and Bitta, ‘consumer behavior is the decision process and physical activity, which individuals engage in when evaluating, acquiring, using or disposing of goods and services’.

Nature of consumer behavior

1. Influenced by various factors

 The various factors that influence the consumer behavior are as follows:

•  Marketing factors such as product design, price, promotion, packaging, positioning and dis­tribution.

• Personal factors such as age, gender, education and income level.

• Psychological factors such as buying motives, perception of the product and attitudes towards the product.

• Situational factors such as physical surroundings at the time of purchase, social surroundings and time factor.

• Social factors such as social status, reference groups and family.

• Cultural factors, such as religion, social class—caste and sub-castes.

2. Undergoes a constant change

Consumer behavior is not static. It undergoes a change over a period of time depending on the nature of products. For example, kids prefer colorful and fancy footwear, but as they grow up as teenagers and young adults, they prefer trendy footwear, and as middle-aged and senior citizens they prefer more sober footwear. The change in buying behavior may take place due to several other factors such as increase in income level, education level and marketing factors.

3. Varies from consumer to consumer

All consumers do not behave in the same manner. Differ­ent consumers behave differently. The differences in consumer behavior are due to individual factors such as the nature of the consumers, lifestyle and culture. For example, some consumers are technoholics. They go on a shopping and spend beyond their means.

They borrow money from friends, relatives, banks, and at times even adopt unethical means to spend on shopping of advance technologies. But there are other consumers who, despite having surplus money, do not go even for the regular purchases and avoid use and purchase of advance technologies.

4. Varies from region to region and country to county

The consumer behavior varies across states, regions and countries. For example, the behavior of the urban consumers is different from that of the rural consumers. A good number of rural consumers are conservative in their buying behaviors.

The rich rural consumers may think twice to spend on luxuries despite hav­ing sufficient funds, whereas the urban consumers may even take bank loans to buy luxury items such as cars and household appliances. The consumer behavior may also vary across the states, regions and countries. It may differ depending on the upbringing, lifestyles and level of development.

5. Information on consumer behavior is important to the marketers

Marketers need to have a good knowledge of the consumer behavior. They need to study the various factors that influence the consumer behavior of their target customers.

The knowledge of consumer behavior enables them to take appropriate marketing decisions in respect of the following factors:

• Product design/model

• Pricing of the product

• Promotion of the product

• Packaging

• Positioning

• Place of distribution

6. Leads to purchase decision

Positive consumer behavior leads to a purchase decision. A consumer may take the decision of buying a product on the basis of different buying motives. The purchase decision leads to higher demand, and the sales of the marketers increase. Therefore, marketers need to influence consumer behavior to increase their purchases.

7. Varies from product to product

Consumer behavior is different for different products. There are some consumers who may buy more quantity of certain items and very low or no quantity of other items. For example, teenagers may spend heavily on products such as cell phones and branded wears for snob appeal, but may not spend on general and academic reading. A middle- aged person may spend less on clothing, but may invest money in savings, insurance schemes, pension schemes, and so on.

8. Improves standard of living

The buying behavior of the consumers may lead to higher stan­dard of living. The more a person buys the goods and services, the higher is the standard of living. But if a person spends less on goods and services, despite having a good income, they deprive themselves of higher standard of living.

9. Reflects status

The consumer behavior is not only influenced by the status of a consumer, but it also reflects it. The consumers who own luxury cars, watches and other items are considered belonging to a higher status. The luxury items also give a sense of pride to the owners.

Significance / Importance of studying consumer behavior:

A study of consumer behavior is significant (or rather imperative) for the following reasons: 

1. Realistic Implementation of the Marketing Concept

The modern marketing concept is consumer-oriented. To give a realistic implementation to this concept, a study of consumer behavior is imperative. More specifically, a study of consumer behavior is a must for developing an ideal marketing-mix; which is the cornerstone of the concept of marketing.

It is, in fact, very true to state that unless the marketer knows what consumers buy and why; it is not possible to design and implement a successful scheme of marketing-mix to, beat the completive elements.

2. Planning Product Differentiation and Market Segmentation

For planning product differentiation strategies (i.e. making the product so differentiated and unique that consumer may be tempted to buy only that product due to its unique features); a study of consumer behavior is very significant or necessary.

Again, for designing schemes of market segmentation (a process of dividing a potential market into distinct sub-markets of consumers with common needs and characteristics), a study of consumer behaviour is very necessary.

As a matter of fact, the success of marketing management depends on designing schemes of product differentiation and market segmentation, the background data for which is furnished by a study of consumer behavior.

3. Selection of Distribution Channels

A study of consumer behavior not only includes what consumers buy; but also the source from where they buy’. For example, men of status in society may never buy things from ordinary shops and ordinary markets. They may prefer to buy from prestigious stores and markets; even though they may have to pay a higher price and so on for various categories of consumers.

Thus a study of consumer behavior guides the marketer to select suitable channels of distribution, to provide maximum convenience and satisfaction to different groups of consumers.

4. Designing Promotional Techniques

Promotional techniques include advertising message and media, personal selling approaches and special sales promotional devices. Designing promotional techniques is much facilitated by a study of consumer behavior; which may throw light on the psychology of people as to the factors which affect their buying decisions.

Those factors which affect consumers’ buying behavior may be suitably incorporated into the promotional techniques of the organization.

5. Trade-Off between Price and Quality

A study of consumer behavior is likely to reveal whether target consumers of the enterprise emphasize more on the price of the product or its quality. On this basis, the marketer can device suitable pricing strategies and programs aimed at upgrading the quality of organization’s products to suit the needs, habits and behavior of consumers.