Sunday, March 19, 2017

Consumer Behaviour - Meaning, Importance and Factors affecting

Meaning of Consumer and Consumer Behaviour
Consumer: Any individual who purchases goods and services from the market for his/her end-use is called a consumer. In simpler words a consumer is one who consumes goods and services available in the market. In other words, consumer is an ultimate user of a product or service.
According to International Dictionary of Management, “consumers are purchasers of goods and services for immediate use and consumption”.

Consumer Behaviour (CB): Human being differs from one to another. It is not easy to predict the human behaviour. Human being differs in their taste, needs, wants and preferences. But one constant thing is that we all are consumers. CB is a vast and complex subject. Understanding CB and “knowing consumers’ are not that simple.
Consumer behaviour explains the reasons and logic that underlie purchasing decisions and consumption patterns; it explains the processes through which buyers make decisions. Consumer Behaviour may be defined as “the interplay of forces that takes place during a consumption process, within a consumers’ self and his environment. This interaction takes place between three elements viz. knowledge, affect and behaviour; it continues through pre-purchase activity to the post purchase experience; it includes the stages of evaluating, acquiring, using and disposing of goods and services”. The “consumer” includes both personal consumers and business/industrial/organizational consumers.

Definitions of CB
In the words of Kotler,”Consumer   behaviour   is   the   study   of   how   people   buy,   what they buy, when they buy and why they buy.”

In the words of Solomon,” Consumer behaviour is the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires”
In the words of Professor Bearden and Associates,”Consumer behaviour is the mental and emotional process and the physical activities of people who purchase and use goods and services to satisfy needs and wants.”
By analysing the above definition, it reveals that the study includes within its purview, the interplay between cognition, affect and behaviour that goes on within a consumer during the consumption process: selecting, using and disposing off goods and services.

Nature/Characteristics of consumer behavior are:
a)      Consumer behavior is the part of human behavior. This cannot be separated. Human behavior decides what to buy, when to buy etc. This is unpredictable in nature. Based on the past behavioral pattern one can at least estimate like the past he might behave.
b)      Learning the consumer is difficult and complex as it involves the study of human beings. Each individual behaves differently when he is placed at different situations. Every day is a lesson from each and every individual while we learn the consumer behavior. Today one may purchase a product because of its smell, tomorrow it may vary and he will purchase another due to some another reason.
c)       Consumer behavior is dynamic. A consumer’s behavior is always changing in nature. The taste and preference of the people vary. According to that consumers behave differently. As the modern world changes the consumer’s behaving pattern also changes.
d)      Consumer behavior is influenced by psychological, social and physical factors. A consumer may be loyal with a product due to its status values. Another may stick with a product due to its economy in price. Understanding these factors by a marketer is crucial before placing the product to the consumers.
e)      Study of consumer behavior is crucial for marketers. Before producing a product or launching a product, he has to go through a clear analysis of the consumer behavior. If the people or prospects reject the product, he has to modify it.
f)       Consumer behavior is a continuous process as it involves the process starts before the buying and continuing after purchasing. Before buying there will be high confusions and expectations about the product. After buying it, if the buyer is satisfied with the product he shows a positive behavior, otherwise negative.
Importance of Consumer Behaviour
The consumer is the focus of marketing efforts. The modern concept spells out the real significance of buyer’s Behaviour. The modern marketing management tries to solve the basic problems of consumers in the area of consumption. To survive in the market, a firm has to be constantly innovating and understand the latest consumer needs and tastes. It will be extremely useful in exploiting marketing opportunities and in meeting the challenges that the Indian market offers. It is important for the marketers to understand the buyer behaviour due to the following reasons.
1. Analyze the environment: The knowledge of consumer behaviour can be applied to help identify opportunities and fight threats. The opportunities could be in terms of newer customers, newer markets, unfulfilled needs and wants. The threats could be fought by developing and implementing appropriate marketing strategies to best fit the environment.
2. Take better marketing decisions: It helps marketers to understand consumer buying behaviour and make better marketing decisions.
3. Future Prediction: The size of the consumer market is constantly expanding and their preferences were also changing and becoming highly diversified. So without studying it, marketers cannot predict the future of their business. 
4. Economic Stability: It is significant for regulating consumption of goods and thereby maintaining economic stability.
5. Effective utilisation of marketing resources: It is useful in developing ways for the more efficient utilisation of resources of marketing. It also helps in solving marketing management problems in more effective manner.
6. Consumers Preference: Today consumers give more importance on environment friendly products. They are concerned about health, hygiene and fitness. They prefer natural products. Hence detailed study on upcoming groups of consumers is essential for any firm.
7. Consumer Protection: The growth of consumer protection movement has created an urgent need to understand how consumers make their consumption and buying decision.
8. Formulation of production policy: Consumers’ tastes and preferences are ever changing. Study of consumer behaviour gives information regarding colour, design, size etc. which consumers want. In short, consumer behaviour helps in formulating of production policy.
9. Market segmentation: For effective market segmentation and target marketing, it is essential to have an understanding of consumers and their behaviour. 
10. Positivists: Marketing managers regarded consumer behaviour discipline as an applied marketing science, if they could predict consumer behaviour, they could influence it. This approach has come to be known as positivism and the consumer researcher who are primarily concerned with predicting consumer behaviour are known as positivists.
As the marketing research began to study the buying behaviour of consumers, they soon realized that many consumers rebelled at using the identical products everyone else used, for example in case of purchase of house, interiors, car, and dress material etc. people prefers unique products. Consumer preferred differential products that they felt reflected their own special needs, personalities and lifestyles.

Factors affecting consumer behaviour
The study of consumer behaviour indicates how individuals, groups, and organisations select, buy, use of dispose goods, services, ideas or experiences to satisfy their needs and desires. The various factors influencing buyer behaviour are as following:
I. Marketing Factors: Each element of the market mix – product, pricing, promotion and place (distribution) – has the potential to affect the buying process at various stages.
A. Product: The uniqueness of the product, the physical appearance and packaging can influence buying decision of a consumer.
B. Pricing: Pricing strategy does affect buying behaviour of consumers. Marketers must consider the price sensitivity of the target customers while fixing prices.
C. Promotion: The various elements of promotion such as advertising, publicity, public relations, personal selling, and sales promotion affect buying behaviour of consumers. Marketers select the promotion mix after considering the nature of customers.
D. Place: The channels of distribution, and the place of distribution affects buying behaviour of consumers. Marketers make an attempt to select the right channel and distribute the products at the right place.

II. Personal Factors: The personal factors of a consumer may affect the buying decisions. The personal factors include:
A. Age Factor: The age factor greatly influences the buying behaviour. For instance, teenagers may prefer trendy clothes, whereas, office- executives may prefer sober and formal clothing.
B. Gender: The consumer behaviour varies across gender. For instance, girls may prefer certain feminine colours such as pink, purple, peach, whereas, boys may go for blue, black, brown, and so on.
C. Education: Highly educated persons may spend on books, personal care products, and so on. But a person with low or no education may spend less on personal grooming products, general reading books, and so on.
D. Income Level: Normally, higher the income level, higher is the level of spending and viceversa. But this may not be always the case in developing countries, especially in the rural areas.
E. Status’ in the Society: Persons enjoying higher status in the society do spend a good amount of money on luxury items such as luxury cars, luxury watches, premium brands of clothing, jewellery, perfumes, etc.
F. Other Personal Factors: The other personal factors such as personality, lifestyle, family size, etc., influence consumer behaviour.

Ill. Psychological Factors: A person’s buying behaviour is influenced by psychological factors such as follows:
A. Learning: It refers to changes in individual behaviour that are caused by information and experience. For example, when a customer buys a new brand of perfume, and is satisfied by its use, then he/she is more likely to buy the same brand the next time.
B. Attitude: It is a tendency to respond in a given manner to a particular situation or object or idea. Consumers may develop a positive, or negative or neutral attitude towards certain product or brands, which in turn would affect his/her buying behaviour.
C. Motives: A motive is the inner drive that motivates a person to act or behave in a certain manner. The marketer must identify the buying motives of the target customers and influence them to act positively towards the marketed products. Some of the buying motives include:
- Pride and possession
- Love and affection
- Comfort and convenience
- Sex and romance, etc.
E. Perception: It is the impression, which one forms about a certain situation or object. A motivated person is ready to act. But the way or the manner in which he acts is influenced by his/her perception of the situation.
F. Beliefs: A belief is a descriptive thought, which a person holds about certain things. It may be based on knowledge, opinion, faith, trust and confidence. People may hold certain beliefs of certain brands/products. Beliefs develop brand images, which in turn can affect buying behaviour.

IV. Situational Influences: Major situational influences include the physical surroundings, social surroundings, time, the nature of the task, and monetary moods and conditions.
A. Physical Surroundings: The physical surroundings at the place of purchase affects buying behaviour. For instance, when a customer is shopping in a store, the features that affects buying behaviour would include the location of the store, the decor, the layout of the store, the noise level, the way merchandise is displayed, and so on.
B. Social Surroundings: The social surroundings of a situation involve the other people with the customer that can influence buying decision at the point of purchase. For instance, a bargain hunter shopping with an impatient friend may do quick purchases, and may not haggle over the price, so as to please the impatient friend.
C. Time Factor: Customers may make different decisions based on when they purchase – the hour of the day, the day of the week, or the season of the year. For instance, a consumer who has received a pay cheque on a particular day may shop more items, than at the end of the month when he is short of funds.
D. Task: A customer may make a different buying decision depending upon the task to be performed by the product. For instance, if the product is meant as a gift rather than for personal use, then the customer may buy a different brand/product depending upon to whom the gift is purchased.
E. Momentary Conditions: The moods and condition of the customer at the time of purchase may also affect the buying decision. A customer who is very happy would make a different buying decision, as compared to when he is not in a happy mood

V. Social Factors: The social factors such as reference groups, family, and social and status affect the buying behaviour:
A. Reference Groups: A reference group is a small group of people such as colleagues at work place, club members, friends circle, neighbours, family members, and so on.
B. Family: The family is the main reference group that may influence the consumer behaviour. Nowadays, children are well informed about goods and services through media or friend circles, and other sources. Therefore, they influence considerably in buying decisions both FMCG products and durables.
C. Roles and Status: A person performs certain roles in a particular group such as family, club, organisation, and so on. For instance, a person may perform the role of senior executive in a firm and another person may perform the role of a junior executive. The senior executive may enjoy higher status in the organisation, as compared to junior executive. People may purchase the products that conform to their roles and status, especially in the case of branded clothes, luxury watches, luxury cars, and so on.

VI. Cultural Factors: Culture includes race and religion, tradition, caste, moral values, etc. Culture also include subcultures such sub-caste, religious Sects, language, etc.
A. Culture: It influences consumer behaviour to a great extent. Cultural values and elements are passed from one generation to another through family, educational institutions, religious bodies, social environment, etc. Cultural diversity influences food habits, clothing, customs and traditions, etc. For instance, consuming alcohol and meat in certain religious communities is not restricted, but in certain communities, consumption of alcohol and meat is prohibited.

B. Sub-Culture: Each culture consists of smaller sub-cultures that provide specific identity to its members. Subcultures include sub-caste, religious sects (Roman Catholics, Syrian Catholics, Protestant Christians, etc), geographic regions (South Indians, North Indians), language (Marathi, Malayali, Tamilian, Guajarati) etc. The behaviour of people belong to various sub-cultures is different. Therefore, marketers may adopt multicultural marketing approach, i.e., designing and marketing goods and services that cater to the tastes and preferences of consumers belonging to different sub-cultures.

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