Consumer Behaviour

• Definition of Consumer Behavior

• Consumer behavior can be defined as the study of psychological, physical
and social actions when individuals buy, use and dispose of products,
services, ideas, and practices. In other words, consumer behavior is the
study of how consumers will make their buying decision and what those
factors which support or influence these decisions.
• According to marketers, by understanding the compelling reason for
which a consumer buys a particular product or service over the other, it
becomes easier to identify which product is in demand and which is
obsolete so that marketing strategies can be designed accordingly.

• “The buying behavior of final consumers – individuals and households

who buy goods and services for personal consumption” Philip Kotler
• Factor affecting Consumer Behavior
• Understanding how consumer behavior impacts marketing renders it vital to
understand those factors which affect consumer behavior and which include:
• Cultural Factors
• Consumer behavior is influenced by cultural factors like social class, buyer’s
culture, and subculture. There are three types of cultural factors include social
class, culture, and subculture. Culture can be different by region, different
groups and even countries.
• Cultural shifts are always important for marketers whether marketing new
products or existing products with new features and attributes. For examples
nowadays cultural shift towards health and fitness has created a huge demand
for exercise equipment, low calories and organic food and other fitness
services. This cultural shift greatly influenced the consumer behavior
throughout the world i.e. America, England and Europe and many parts of the
world. People go to Gym and love organic and healthy food.
• Culture is the combination of subcultures. If you are a Muslim,
Hindu or Christian, your buying behavior will be influenced by
different subcultures. It will affect your choice and preferences
like your food, clothing, career goals and recreational activities.
• Another cultural factor is the social class that can affect the
consumer buying behavior in different parts of the world. For
example, in the western world, both the lower class and upper
might show the same buying behavior. But in other countries
like India upper class have a tendency to buy luxury cars,
gadgets, and personal care products. But people from the
lower class are unable to spend money on these purchases.
• Social Factors
• Social factors greatly influence the purchasing behavior of consumers. Social influencers are
diverse and include family, school or work communities, social interaction or any group with
which an individual interacts. It also includes an individual’s social class which comprises of
education level, living conditions, and income.
• Social Reference. For example, Last month I was eagerly needed a laptop. I went to a nearby
market and purchased a MacBook Pro laptop. What factors affect my buying decision and
why I purchased MacBook Pro. It was because my closest friend already having the same
brand and he is quite satisfied with this product.
• Family. Family plays an important role in the decision-making process. For example, if you are
a married person, you will always prefer those products that would benefit both husband and
wife.
• Social Role and Status. Let us understand social role and status and how it affect consumer
behavior. For example, you are a Chief Financial Officer in a leading organization, you are
someone’s son, husband and father. your role can also affect the buying tendency of many
people.
• Personal Factors
• Personal factors impact buying decisions and include
age, economic situation and occupation. In considering
personal factors, buying behavior is also influenced by
habits, opinions and interests along with other personal
issues.
• Human Life Cycle Stages is another example, here
marketers target markets based on the human life cycle.
They will target teenagers with bright colors, loud music
and fast food. A young couple will prefer to buy a
retirement plan and secure their future.
• Occupation and Economic Circumstances. A person occupation
affects the consumer decision while buying goods and services. For
example, if you are a blue-color worker you will prefer to buy more
work-related clothes. On the other hand, if you are an office worker
you will tend to buy smart clothes. Different types of companies
specialize in making products based on occupational group. For
example, a software house will develop different software for
accountants, lawyers, retailers and engineers.
• Marketers closely observe buyer personal income, saving and
interest rate. Their marketing mix decisions are based on economic
indicators. For example, The price of Nikon D-5 professional camera
is over $6000, you can only purchase this camera if you enough
disposable income, savings or borrowing power
• Lifestyle means how a person lives in a society. For example, you are
living in a posh area and people have expensive watches, branded
clothes and luxury cars. You have to maintain your status and image.
• Psychological Factors
• Psychological factors that impact buying decision includes perception,
motivation and beliefs and attitudes. Every consumer will respond to
marketing message based upon their attitudes and perceptions.
• Motivation. People have different needs at a time. Some needs are
biological i.e. hunger, thirst and some are psychological i.e.
recognition, self-esteem and belonging. When a need reaches a
certain level of intensity it becomes a motive. According to Philip
Kotler, a motive is a need that has the power to direct the person to
seek satisfaction.
• Maslow’s Hierarchy of Needs also known as Maslow’s theory of motivation was
developed by Abraham Maslow in 1943. This Maslow’s theory is based on
human motivation. It is shaped like a pyramid and have a bottom to top
approach. According to this hierarchy, there are five levels of human needs.
• ADVERTISEMENT
• Physiological needs consist of basic human needs like water, food and sleep.
• Safety needs consist physical safety of humans like personal, emotional,
financial security
• Social Belonging and needs consist of love, friendship needs
• Self-Esteem are those needs looking for self-respect, recognition and social-
status
• Self-actualization is the need for personal growth, development and realization.
• Freud Theory of Motivation. This theory tells us that the unconscious
psychological forces such as emotions and desires shape an individual behavior.
These are three factors are Id, superego and ego.
• Consumer Behavior Models
• Through observation and research, there have been developed several
models which further explains the buying behavior of consumers and
which includes black box, personal variables as well as complex models.
• Black-box model: This model is based upon external stimulus-response
which means that a point triggers the consumer’s mind to make a
purchasing decision which is influenced by different factors like sampling,
marketing message, promotions, product availability and price.
• Personal variables: When a consumer is influenced by personal-variable
model, decisions are based upon internal factors. Internal factors may
include belief systems, goals, goals, traditions, personal opinions or any
other similar internal motivator.
• Complex model: Complex model includes both external and internal variables.
• How to Study Consumer Behavior
• Several factors affect the consumer behavior and there are some methods
that are used to study consumer behavior. These methods include:
• Surveys: Surveys can be conducted on the phone, internet or in-person.
Surveys should avoid the open-ended question and should include multiple-
choice questions so that answers are given easily.
• Focus groups: This involves hosting a group of different type of customers to
discuss over a product type and to understand the reasons why customers will
buy certain brands. This should include open-ended questions and allow
participants to try a new brand and write down their views about it.
• Point-of-sale: This requires obtaining statistics from stores or corporate
headquarters. Companies should focus upon a particular type of product and
determine whether the product is purchased more than often in a certain
time
Buying behavior and involvement
• Dissonance Reducing Buying Behaviour
• Customer involvement in the purchase activity is
high and customers cannot find a substantial
differentiation among the alternatives.

• The consumer is highly involved and sees little

difference among brand alternatives. The
consumer is highly involved and sees little
difference among brand alternatives.
• Complex Buying Behaviour
• Consumer is highly involved but he finds a substantial difference among the
available brands.
• In this case, the buyer develops beliefs about the product or service, then he
develops a set of attitude towards the product and finally, he makes a deliberate
choice. This is a case when products are expensive, bought infrequently, risky and
highly self-expressive.
•
Variety Seeking Buying Behaviour
• This kind of behaviour is shown in some situations where the consumer shows low
involvement behaviour but there is a significant brand difference.
• Consumers show a high level of brand switching behaviour.
• Habitual buying Behaviour
• This kind of behaviour is shown in some situations where the consumer shows low
involvement behaviour but there is no/few significant brand difference.
• Consumer Buying Process
• In consumer buying process, generally, the purchaser passes
through five distinct stages in consumer buying process
namely need or problem recognition, information search,
alternative evaluation, purchase decision and post-purchase
behaviour.
• Stage of Problem Recognition
• Stage of Information Search
• Stage of Alternative Evaluation
• Stage of Purchase Decision
• Stage of Post Purchase Behaviou
Decision making stages
• Participant in Buying Process
• Consumer behaviour is influenced not only by consumer personali- ties and
motivations, but also by the various participant in the buying process.
Consumer decision making is an intricate process.
• To understand how consumers actually take the decision to buy a product, it
is important for marketers to identify who makes and has input in the
decision-making process. In a buying process there are various participants
involved, their roles are explained as follows:
• Initiator
• Influencer
• Gatekeeper
• Decider
• Buyer
• Users
• Occupants: Who is the Consumer
• Object of Purchase: What does the Consumer
Buy
• Objective: Why is the Consumer Buying
• Occasion: When do they Buy or How Often do
they Buy and Use
• Outlets: Where do they Buy
• Operations: How do they Buy
• Organisation: Who is Involved
Factors affecting consumer behaviour
Scope of consumer behaviour
Importance of consumer behaviour
Scope
• Scope of consumer behaviour
• Consumer behavior is a crucial aspect of marketing that involves understanding the
needs, preferences, and decision-making processes of consumers. The scope of
consumer behavior is broad and encompasses various aspects of marketing, such as
product development, pricing, promotion, and distribution.
• Product Development
• By understanding consumer behavior, businesses can develop products that meet
the needs and preferences of their target customers. This includes identifying the
features and benefits that are most important to customers and designing products
that align with these preferences. Consumer behavior research can also help
businesses identify gaps in the market and opportunities for innovation.
• Pricing
• Effective pricing strategies require an understanding of consumer behavior. By
analyzing consumer behavior data, businesses can identify the price points that are
most likely to be accepted by their target audience. This includes considering factors
like consumer demographics, purchasing habits, and perceptions of value.
• Promotion
• Advertising and promotion techniques are developed based on the behavior of the
target audience. By analyzing consumer behavior data, businesses can identify the
most effective communication channels and messaging strategies for their
products. This includes considering factors like consumer demographics, media
consumption habits, and purchasing behavior.
• .
• Distribution
• Identifying the best distribution channels for their products is another key aspect
of consumer behavior. By analyzing consumer behavior data, businesses can
identify the most effective distribution channels for their tarScope of consumer
behaviour
• Consumer behavior is a crucial aspect of marketing that involves understanding
the needs, preferences, and decision-making processes of consumers. The scope
of consumer behavior is broad and encompasses various aspects of marketing,
such as product development, pricing, promotion, and distribution.
Importance of CB
• Importance of consumer behaviour
• Consumer behavior is an important aspect of marketing that helps businesses understand their
target customers. By studying consumer behavior, businesses can identify what motivates
customers to buy their products or services, which can help them develop effective marketing
strategies. There are several reasons why consumer behavior is important for businesses:

• Understanding Customer Needs

• One of the primary reasons why consumer behavior is important is because it helps businesses
understand the needs and preferences of their target customers. By analyzing consumer behavior
data, businesses can identify the features and benefits that are most important to customers,
which can inform product development and marketing strategies.

• Developing Effective Marketing Strategies

• Effective marketing strategies require an understanding of consumer behavior. By analyzing
consumer behavior data, businesses can identify the most effective communication channels and
messaging strategies for their target audience. This can help businesses develop advertising and
promotion techniques that resonate with their target audience, leading to increased sales and
profitability.
• Identifying Opportunities for Growth
• Analyzing consumer behavior data can also help businesses identify
opportunities for growth. By identifying gaps in the market and understanding
consumer needs and preferences, businesses can develop innovative
products and services that meet the needs of their target audience. This can
help businesses stay ahead of their competitors and increase their market
share.

• Enhancing Customer Satisfaction

• By understanding consumer behavior, businesses can also enhance customer
satisfaction. By identifying the features and benefits that are most important
to customers, businesses can develop products and services that meet their
needs and preferences. This can lead to increased customer loyalty and
positive word-of-mouth, which can help businesses attract new customers
and increase their customer base.
Applications of consumer behavior

• Analyzing market opportunity

• Consumer behavior study help in identifying the unfulfilled needs and wants of
consumers. This requires examining the friends and conditions operating in the
Marketplace, consumer’s lifestyle, income levels, and energy influences. This may
reveal unsatisfied needs and wants. Mosquito repellents have been marketed in
response to a genuine and unfulfilled consumer need.
• Selecting the target market
• Review of market opportunities often helps in identifying district consumer
segments with very distinct and unique wants and needs. Identifying these groups,
behave and how they make purchase decisions enable the marketer to design and
market products or services particularly suited to their wants and needs. For
example, please sleep revealed that many existing and potential shampoo users did
not want to buy shampoo fax price at rate 60 for more and would rather prefer a
low price package containing enough quantity for one or two washers. This finding
LED companies to introduce the shampoos sachet, which become a good seller.
Marketing mix and consumer behaviour
• Marketing-mix decisions
• Once unsatisfied needs and wants are identified, the marketer has to determine
the right mix of product, price, distribution, and promotion. Where too, consumer
behavior study is very helpful in finding answers to too many perplexing questions.
The factors of marketing mix decisions are: i) product ii) price iii) promotion iv)
distribution
• Use in social and nonprofits marketing
• Consumer behavior studies are useful to design marketing strategies by social,
governmental, and not for profit organizations to make their programs more
effective such as family planning, awareness about AIDS.
• Conclusion
• Consumer behavior is a vital aspect of marketing that helps businesses develop
effective strategies to attract and retain customers. By understanding the nature
and scope of consumer behavior, businesses can identify opportunities for growth
and develop products and services that meet the needs and preferences of their
target customers
Goals of consumer behaviour
Decision making process
Inter stimuli to influence decision process
• Internal stimuli, which can trigger off a problem recognition
situation are:
• I. The company decides to launch a new product and requires
new equipment and materials for manufacturing the new
product.
• II. The breakdown of a machine which requires replacement or
new parts immediately.
• III. The material purchased from a vendor proves to be
unsatisfactory and the company is urgently looking out for
another vendor.
• IV. The purchase department head notices an opportunity to
obtain better prices or quality materials.
External influence
• The various factors which can act as external stimuli are:
• The buyer comes to know or gets new ideas at an exhibition or trade show or
by seeing an advertisement in a technical magazine or from a sales
representative who offers a better product at a lower price etc., the buyer
becomes aware of the availability of a better product at a reasonable price.
• So the industrial marketer has to act as the stimulant for problem recognition
by developing informative and attractive advertisements, mail literature to
industrial buyers about the availability of technical products, direct their sales
personnel to call upon the buyers/prospects and so on.
• 2. General Need Description:
• Product Specification:
• 4. Supplier Search:
• Proposal Solicitation:
• 6. Supplier Selection:
Digital journey for customer decision
making
• The Digital Customer Journey (DCJ) is the
process carried out by a user. It goes from the
moment the user identifies they have a need,
to the moment they acquire a product or
service to satisfy or solve it. This process or
journey comprises five different phases:
awareness, consideration, purchase, retention
and customer advocacy.
Why optimizing your Digital Customer Journey is a good idea?

• The focus on customer experience has surpassed the price and the product as a
brand differentiator. The strategy’s success is based on the communication of
different areas within an organization. But, mainly, on understanding the
importance of their role in digital customer experience.
• Today, the main trends that stand out in the management of relationships between
companies and clients are: a more informed, hyper-connected, self-sufficient,
demanding and much more emotional consumer. Similarly, the transformation of
the opening of multiple channels and their correct integration to the contact, self-
service and customer experience channels regarding a product or service.
• Here lies the importance of the Digital Customer Journey. While the purpose of any
marketing strategy is to execute a purchase, the process the customer goes
through is now as relevant as the purchase itself. In other words, if the customer
does not have a pleasant, frictionless experience during their purchase journey,
they will most likely not reach their destination.
• The five stages of the Digital Customer Journey
• Awareness (pre-sale)
• The customer awareness or discovery phase is where the user
realizes they have a need. Keep in mind that “the need” is a broad
concept in the customer journey.
• A need may be, for example, that you want to try the new flavor of a
brand of candies. You didn’t know that flavor existed, and suddenly,
you discover it. Or, for example, you feel like getting a massage
based on a post you saw on your Instagram feed.
• Discovery can be offline, for example, in a conversation with friends,
in a shop window, or in a TV commercial, before going online. In
general, the entire customer journey can start offline and go digital.
• n this case, where we’re talking about a 100% digital process,
the most common way to get to the awareness phase is through
advertising, whether on social networks, websites, or search
engines or even through sponsored articles in the media.
• It is also possible to discover it through recommendations on
social networks, where influencer marketing strategies come
into play.
• Be that as it may, this first stage is passive for the user, requiring
no effort from the user’s standpoint. They discover they have a
need based on observing Ads or by listening to a friend talk
about a specific brand, for instance. If they decide to investigate
further, we move on to the next phase.
• Consideration (pre-sale)
• Digital consideration is the second phase of the
digital customer journey. At this point, the user
begins to think about what they have discovered
and consider if and where to buy it.
• Here it begins the search process. The brand can
reach the user through SEO and SEM content
strategy by sending out email campaigns, reviews
on third-party websites or sponsored articles, etc…
• Consideration is perhaps the stage where most companies invest
more money since it is where everything is at stake. The business
needs to attract the user with various digital marketing strategies in
order to compete and win the first spot in the mind of the consumer.
• At this point is when the potential client has to understand what you
offer that the competition does not give. And as we have already
mentioned, it is not only an informative process but also an
emotional one.
• At the consideration stage, it is crucial to differentiate from the
competition and offer the added value of your brand. It is not only
about solving the need once but about truly understanding the
user persona that is targeted so that later down the line, they
become loyal customers.
• Purchase (post-sale)
• Finally, it’s time to buy. We cannot express enough how the shopping experience in a
digital customer journey is crucial. For instance, if the website usability is poor, you
leave. In case there are too many steps or you can’t pay with your preferred payment
method, you also leave.
• Cart abandonment is a crucial problem in many e-commerce. Within the company’s
digitization strategy, optimizing the sales process is essential to not lose all previous
work.
• Your potential client is lost because they instead go to an alternative where the
process is more accessible. For this, it is necessary to make the purchase as easy and
frictionless as possible for the customer. If they feel that it is becoming a hassle to
purchase something at your online commerce, they turn around to your competition.
• You can make the purchase process easier by offering alternatives such as data
autofill, having different transaction payment methods or providing competitive
shipping options, for instance. These actions are essential, so the purchase is not lost
at the last moment.
• Retention (post-sale)
• Once the purchase is over, we move on to retention. If your experience in customer
service has been positive, it will be much easier to convince your customers to stay.
• How do you do that? It could be a telephone after-sales service, reaching out to the
customer through a digital channel and touching base with them to offer extra
support with their purchase. Responding promptly to the customer will aid to get a
better impression of your business and, most importantly, increase the customer’s
lifetime cycle rate.
• There are different strategies your marketing and customer success team can
implement to build longstanding customer relationships. That could be sending out
additional resources to add more value to the purchase, creating a customer online
community, and keeping the CX experts following up with online surveys to learn
more about their current experience with the brand, to name a few.
• In the Retention phase, the key is to make the client feel that they’re important to
the business.
• Advocacy (this is where every business wants customers on)
• Lastly, we need these satisfied customers to recommend us to other
potential customers. In this sense, the voice of the customer (VOC)
must be listened to. As we explained in our article on what VOC
means, this methodology puts the customer and their impressions at
the center.
• If you find it interesting reading about the voice of the customer, you
might want to review these VOC survey questions and templates.
• We can know what our NPS is and what we need to change to
achieve these recommendations through customer satisfaction
surveys. Considering that retaining a customer is much more
profitable than getting a new one, profitability will most likely
skyrocket if our retained customers recommend us.
Example of digital journey
• Example of Digital Customer Journey: Purchasing a guitar online
• Now that every stage of the digital customer journey is explained let’s go over all of the phases in a simple
example.
• Let’s say you want to purchase a guitar. In the awareness phase, you discover you’d like to learn to play a
musical instrument. Maybe the mobile phone “heard you” speak with your friends about your interest to
learn to play the guitar, and now your social media and every website you visit are bursting with Ads of
companies wanting to sell you the “best guitar in the market.” The awareness or discovery stage doesn’t
require any effort from the user other than reading the Ads that show up on your digital channels.
• The next stage, consideration, is when you start to notice you might ponder on the idea of the
purchasing process of a guitar. Now the search process has begun, and you’re actively looking for the best
guitar that fits you. In this stage, you could be doing things like watching YouTube reviews, reading a blog
post about “the top 10 best guitar alternatives for beginners,” and even comparing prices from different e-
commerces such as Amazon, Best Buy, or an official musical instruments online store.
Once it’s decided where you want to purchase your product, you go to their website to order it. But then
you get a couple of unpleasant surprises. The website user experience is terrible because the pages take a
lot of time to load. Even when you manage to overcome such inconvenience with a lot of patience, the site
marks an error whenever you’re trying to do the transaction with your card. Given your e-shopping
experience got stuck, now you go to your second online shop website of preference. This time you can
navigate through the website quite faster, and the payment transaction with your card gets through with
ease.
•
• The second option you had to go for instead of the first one continues bringing in a great
customer experience. What happens in the retention stage? Well, they said the
approximate delivery date was going to be in a week, but you got your guitar within 3
days! Plus, it comes in a nice box with a personalized note from the business thanking you
for the purchase and offering flexible return policies. Besides, you’ve also received
downloadable resources and provided customer access to an online community portal
where you can connect with other users and get support from the company’s Customer
Success team. All of these actions may seem like a bonus, but they aim to make the client
feel special, so the next time you need to purchase any other instrument or an extra set
of new strings, you buy with them.
• Finally, if you’re happy with the guitar and the service they continually provide post-sale,
you might start recommending them to other people, be it in person or by writing a
review on their website.
• This may take some time to get here, so the sum of what the business does in all the
previous stages (especially retention) is critical.
• This is the part where you, as their customer, are so happy with the product and their
service that you start genuinely advocating for them.
Conlusion
• conclusion…
• The Digital Customer journey is the process carried out by a user
when interacting with your brand to satisfy a need with your product
or service.
• There are 5 stages the user goes through Discovery, consideration,
purchase, retention, and advocacy.
• Touchpoints are a critical part of a DCJ because they are your
company’s points of customer contact, end to end.
• The success of your company relies on the optimization of your DCJ.
Remember, the customer’s process is as relevant as the purchase
itself.
• Great customer experiences can be obtained through the use of a
powerful customer experience management platform.