CONSUMER BEHAVIOR CHAPTER # 1 ST INTRODUCTION AND OBJECTIVES OF THIS CHAPTER: INTRODUCTION AND OBJECTIVES OF THIS CHAPTER: IN THIS FIRST CHAPTER, WE ARE GOING TO DISCUSS THREE MAIN AREAS, WHICH ARE: IN THIS FIRST CHAPTER, WE ARE GOING TO DISCUSS THREE MAIN AREAS, WHICH ARE: DEFINING THE NATURE OF CONSUMER BEHAVIOR DEFINING THE NATURE OF CONSUMER BEHAVIOR APPRECIATING WHY WE SHOULD STUDY CONSUMER BEHAVIOR APPRECIATING WHY WE SHOULD STUDY CONSUMER BEHAVIOR DEVEOLPING A FRAMEWORK FOR STUDYING CONSUMER BEHAVIOR DEVEOLPING A FRAMEWORK FOR STUDYING CONSUMER BEHAVIOR

DEFINITION OF CONSUMER BEHAVIOR THE DECISION PROCESS AND PHYSICAL ACTIVITY INDIVIDUALS ENGAGE IN, WHEN EVALUATING, ACQUIRING, USING OR DISPOSING OF GOODS AND SERVICES. THE DECISION PROCESS AND PHYSICAL ACTIVITY INDIVIDUALS ENGAGE IN, WHEN EVALUATING, ACQUIRING, USING OR DISPOSING OF GOODS AND SERVICES. NOW WE NEED TO UNDERSTAND SOME BASIC TERMINOLOGIES, WHICH WE WILL BE USING IN THIS SUBJECT: NOW WE NEED TO UNDERSTAND SOME BASIC TERMINOLOGIES, WHICH WE WILL BE USING IN THIS SUBJECT:

CONSUMER & CUSTOMER……….. CONSUMER & CUSTOMER……….. CONSUMER: CONSUMER: A PERSON WHO REGULARLY PURCHASES PRODUCTS,CONSUME IT OR HIRE SERVICES FROM A PARTICULAR STORE OR SERVICE PROVIDER. E.G, YOU DAILY OR SAY AFTER 2 DAYS USE TO FILL YOUR CAR AT SHELL GAS STATION, IN THIS CASE YOU WILL BE CONSIDERED AS CONSUMER OF SHELL COMPANY. A PERSON WHO REGULARLY PURCHASES PRODUCTS,CONSUME IT OR HIRE SERVICES FROM A PARTICULAR STORE OR SERVICE PROVIDER. E.G, YOU DAILY OR SAY AFTER 2 DAYS USE TO FILL YOUR CAR AT SHELL GAS STATION, IN THIS CASE YOU WILL BE CONSIDERED AS CONSUMER OF SHELL COMPANY.

CUSTOMER CUSTOMER: CUSTOMER: TRADITIONALLY CUSTOMERS ARE DEFINED AS THE PURCHASERS OF PRODUCTS AND SERVICES OFFERED FOR SALE. TRADITIONALLY CUSTOMERS ARE DEFINED AS THE PURCHASERS OF PRODUCTS AND SERVICES OFFERED FOR SALE. ULTIMATE CONSUMER/END USER: ULTIMATE CONSUMER/END USER: THOSE PERSONS WHO PURCHASES FOR THE PURPOSE OF INDIVIDUAL OR HOUSE HOLD CONSUMPTION. THOSE PERSONS WHO PURCHASES FOR THE PURPOSE OF INDIVIDUAL OR HOUSE HOLD CONSUMPTION.

INITIATOR/IFLUENCERS/BUYERS THE INDIVIDUAL BUYERS: THE INDIVIDUAL BUYERS: MOST OF THE TIMES AN IDIVIDUAL MAKES PURCHASE DECISION WITH LITTLE OR NO INFLUENCES FROM OTHERS, HOWEVER, IN SOME CASES, A NUMBER OF PEOPLE CAN BE JOINTLY INVOLVED IN A PURCHASE DECISION, IN THIS CASE, DIFFERENT CONSUMER BEHAVIOR ROLES WOULD BE: MOST OF THE TIMES AN IDIVIDUAL MAKES PURCHASE DECISION WITH LITTLE OR NO INFLUENCES FROM OTHERS, HOWEVER, IN SOME CASES, A NUMBER OF PEOPLE CAN BE JOINTLY INVOLVED IN A PURCHASE DECISION, IN THIS CASE, DIFFERENT CONSUMER BEHAVIOR ROLES WOULD BE:

CONT……… INITIATOR: INITIATOR: AN INDIVIDUAL WHO IDENTIFIES A NEED, OR PRACTICALLY INITIATES A PURCHASE DESCISION, E.G, A WIFE MAY ASK HER HUSBAND TO PURCHASE A PACK OF CEREAL, AS THEIR BABY AGE HAS INCREASED TO 6 MONTHS, AND NOW IT’S AN ESSENTAIL FOOD REQIREMENT FOR HIM. AN INDIVIDUAL WHO IDENTIFIES A NEED, OR PRACTICALLY INITIATES A PURCHASE DESCISION, E.G, A WIFE MAY ASK HER HUSBAND TO PURCHASE A PACK OF CEREAL, AS THEIR BABY AGE HAS INCREASED TO 6 MONTHS, AND NOW IT’S AN ESSENTAIL FOOD REQIREMENT FOR HIM.

CONT…………… THE INFLUENCER: THE INFLUENCER: THE PERSON WHO INSPIRES, AFFECT OR GUIDES A PARTICULAR PURCHASING DECISION, E.G, IN PREVOIUS EXAMPLE WIFE ROLE WAS OF BOTH AS AN INITIATOR AND INFLUENCER. THE PERSON WHO INSPIRES, AFFECT OR GUIDES A PARTICULAR PURCHASING DECISION, E.G, IN PREVOIUS EXAMPLE WIFE ROLE WAS OF BOTH AS AN INITIATOR AND INFLUENCER. BUYER: BUYER: THE PERSON WHO ACTUALLY MAKES THE PURCAHSE DECISION. E.G, IN THE PREVIOUS EXAMPLE THE HUSBAND ROLE WAS OF A BUYER. THE PERSON WHO ACTUALLY MAKES THE PURCAHSE DECISION. E.G, IN THE PREVIOUS EXAMPLE THE HUSBAND ROLE WAS OF A BUYER.

USER: USER: THE PERSON WHO REALLY OR PRACTICALLY USES THE PRODUCTS OR CONSUME THE SERVICES. THE PERSON WHO REALLY OR PRACTICALLY USES THE PRODUCTS OR CONSUME THE SERVICES. THE DECISION PROCESS: THE DECISION PROCESS: CONSUMER BEHAVIOR INVOLVES A MENTAL DECISION PROCESS AS WELL AS PHYSICAL ACTIVITY,i.e, ACTUAL PURCHASE CONSUMER BEHAVIOR INVOLVES A MENTAL DECISION PROCESS AS WELL AS PHYSICAL ACTIVITY,i.e, ACTUAL PURCHASE

CONT…….. IS JUST ONE STAGE, IN SERIES OF MENTAL AND PHYSICAL ACTIVITES THAT OCCUR DURING A PERIOD OF TIME. SOME OF THESE ACTIVITES TAKE PLACE BEFORE ACTUAL BUYING WHILE OTHER FOLLOW IT. IS JUST ONE STAGE, IN SERIES OF MENTAL AND PHYSICAL ACTIVITES THAT OCCUR DURING A PERIOD OF TIME. SOME OF THESE ACTIVITES TAKE PLACE BEFORE ACTUAL BUYING WHILE OTHER FOLLOW IT. WHY STUDY CONSUMER BEHAVIOR: WHY STUDY CONSUMER BEHAVIOR: SIGNIFICANCE IN DAILY LIVES: SIGNIFICANCE IN DAILY LIVES: CONSUMER BEHAVIOR HAS GOT SO MUCH IMPORTANCE IN OUR DALIY LIFE, MOST OF CONSUMER BEHAVIOR HAS GOT SO MUCH IMPORTANCE IN OUR DALIY LIFE, MOST OF

THE TIMES WE AS AN INDIVIDUAL HAVE TO DECIDE ABOUT VARIUOS PURCHASE DECISIONS, THINKING ABOUT VARIOUS PRODUCTS AND SERVICES, TALKING TO FRIENDS ABOUT THEM, SEEING OR HEARING ADVERTISEMENTS, SO IT PLAYS A VERY VITAL ROLE IN UNDERSTANDING THE BUYING BEHAVIOR OF INDIVIDUALS. THE TIMES WE AS AN INDIVIDUAL HAVE TO DECIDE ABOUT VARIUOS PURCHASE DECISIONS, THINKING ABOUT VARIOUS PRODUCTS AND SERVICES, TALKING TO FRIENDS ABOUT THEM, SEEING OR HEARING ADVERTISEMENTS, SO IT PLAYS A VERY VITAL ROLE IN UNDERSTANDING THE BUYING BEHAVIOR OF INDIVIDUALS.

2. APPLICATION IN DECISION MAKING: 2. APPLICATION IN DECISION MAKING: COSUMER BEHAVIOR SUBJECT IS ALWAYS VIEWED AS A AN APPLIED DISCIPLINE, WHICH MEANS THAT IT HAS APPLICATION BOTH TO PERSONS IN INDIVIDUAL CAPACITY, AND TO WHOLE SOCIETY.PEOPLE USED TO APPLY THIS WHILE MAKING A PURCHASING DECISIONS INDIVIDUALLY OR SOCAILLY. COSUMER BEHAVIOR SUBJECT IS ALWAYS VIEWED AS A AN APPLIED DISCIPLINE, WHICH MEANS THAT IT HAS APPLICATION BOTH TO PERSONS IN INDIVIDUAL CAPACITY, AND TO WHOLE SOCIETY.PEOPLE USED TO APPLY THIS WHILE MAKING A PURCHASING DECISIONS INDIVIDUALLY OR SOCAILLY.

A. MICRO PERSPECTIVE: A. MICRO PERSPECTIVE: IT REFERS TO UNDERSTANDING THE CONSUMERS FOR THE PURPOSE OF HELPING A FIRM OR ORGANIZATION TO ACCOMPLISH ITS OBJECTIVES, E.G, ADVERTISING MANAGERS, PRODUCT DESIGNERS ARE INTRESTED TO UNDERSTAND CONSUMERS IN ORDER TO BE MORE EFFECTIVE AT THEIR TASK. IT REFERS TO UNDERSTANDING THE CONSUMERS FOR THE PURPOSE OF HELPING A FIRM OR ORGANIZATION TO ACCOMPLISH ITS OBJECTIVES, E.G, ADVERTISING MANAGERS, PRODUCT DESIGNERS ARE INTRESTED TO UNDERSTAND CONSUMERS IN ORDER TO BE MORE EFFECTIVE AT THEIR TASK.

B. SOCIETAL PERSPECTIVE: B. SOCIETAL PERSPECTIVE: WE NEED TO KNOW THE ECONOMIC, AND SOCIAL CONDITIONS WITH IN A SOCIETY, OR WE NEED TO KNOW THE CULTURE, RELIGION, BUYING PATTERNS, PREFERENCES OF INDIVIDUALS LIVING IN A PARTICULAR SOCIETY, AND KEEPING WHICH IN MIND WE FORMULATE AND IMPLEMENT OUR STRATEGIES ACCORDINGLY. WE NEED TO KNOW THE ECONOMIC, AND SOCIAL CONDITIONS WITH IN A SOCIETY, OR WE NEED TO KNOW THE CULTURE, RELIGION, BUYING PATTERNS, PREFERENCES OF INDIVIDUALS LIVING IN A PARTICULAR SOCIETY, AND KEEPING WHICH IN MIND WE FORMULATE AND IMPLEMENT OUR STRATEGIES ACCORDINGLY.

APPLYING CONSUMER BEHAVIOR KNOWLEDGE THE UNDERSTANDING OF CONSUMER BEHAVIOR PROVIDES A BROADER OUTLOOK, IN UNDERSTANDING OTHER SUBJECTS AS WELL, LETS DISCUSS: THE UNDERSTANDING OF CONSUMER BEHAVIOR PROVIDES A BROADER OUTLOOK, IN UNDERSTANDING OTHER SUBJECTS AS WELL, LETS DISCUSS: CONSUMER BEHAVIOR AND MARKETING MANAGEMENT: CONSUMER BEHAVIOR AND MARKETING MANAGEMENT: MARKETING MANAGEMENT AND UNDERSTANDING CONSUMER BEHAVIOR, THEY ARE TWO VERY CLOSELEY CONNECTED THINGS, A MARKETING MANAGER NEEDS TO UNDERSTAND CONSUMER BEHAVIOR IN OREDER TO: MARKETING MANAGEMENT AND UNDERSTANDING CONSUMER BEHAVIOR, THEY ARE TWO VERY CLOSELEY CONNECTED THINGS, A MARKETING MANAGER NEEDS TO UNDERSTAND CONSUMER BEHAVIOR IN OREDER TO:

UNDERSTAND CONSUMERS NEEDS AND WANTS: UNDERSTAND CONSUMERS NEEDS AND WANTS: SPECIFYING COMPANY OBJECTIVES: SPECIFYING COMPANY OBJECTIVES: MAKING AN INTEGRATED STRATEGY, KEEPING IN MIND THE CONSUMER PREFERENCES AND BEHAVIOR AND OVERALL COMPANY RESOURCES AND OBJECTIVES: MAKING AN INTEGRATED STRATEGY, KEEPING IN MIND THE CONSUMER PREFERENCES AND BEHAVIOR AND OVERALL COMPANY RESOURCES AND OBJECTIVES:

MARKET OPPORTUNITY ANALYSIS: MARKET OPPORTUNITY ANALYSIS: TARGET MARKET SELECTION: TARGET MARKET SELECTION: MARKETING MIX DTERMINATION: MARKETING MIX DTERMINATION: PRODUCT PRODUCT WHAT PRODUCTS TO PRODUCE? WHAT PRODUCTS TO PRODUCE? WHERE TO PRODUCE? WHERE TO PRODUCE? HOW TO PRODUCE? HOW TO PRODUCE? WHEN TO PRODUCE? WHEN TO PRODUCE?

FOR WHOM TO PRODUCE? FOR WHOM TO PRODUCE? PRICE PRICE WHAT SHOULD BE THE PRICING STRATEGY? WHAT SHOULD BE THE PRICING STRATEGY? PLACE PLACE WHAT AND HOW SHOULD BE THE DISTRIBUTIONAL SET UP? WHAT AND HOW SHOULD BE THE DISTRIBUTIONAL SET UP? PROMOTION PROMOTION

HOW THE PROMTIONAL EFFORTS BE DESIGNED, THE ADVERTISING CAMPAIGN?. HOW THE PROMTIONAL EFFORTS BE DESIGNED, THE ADVERTISING CAMPAIGN?.

CONCLUSION IN THIS ERA OF COMPETITION, UNDERSTANDING THE CONSUMER IS A NECESSITY FOR MARKETERS. CONSUMER NEEDS AND PREFERENCES ARE CONTINUOUSLY CHANGING, GIVEN THE CHANGES IN FACTORS LIKE DEMOGRAPHICS AND LIFESTYLES. THESE CHANGES CAN BECOME GREAT BUSINESS OPPORTUNITIES FOR ALERT MARKETERS AND THREATS FOR MARKETERS WHO FAIL TO ADAPT. IN THIS ERA OF COMPETITION, UNDERSTANDING THE CONSUMER IS A NECESSITY FOR MARKETERS. CONSUMER NEEDS AND PREFERENCES ARE CONTINUOUSLY CHANGING, GIVEN THE CHANGES IN FACTORS LIKE DEMOGRAPHICS AND LIFESTYLES. THESE CHANGES CAN BECOME GREAT BUSINESS OPPORTUNITIES FOR ALERT MARKETERS AND THREATS FOR MARKETERS WHO FAIL TO ADAPT.

CONSUMERS ACQUIRE, CONSUME, AND DISPOSE OFF THE PRODUCTS AND SERVICES CREATED BY ORGANIZATIONS. THEY GO THROUGH SEVERAL COGNITIVE AND BEHAVIORAL PROCESSES WHILE MAKING THEIR PURCHASE AND CONSUMPTION DECISIONS. THE KNOWLEDGE OF HOW THEY DECIDE ON ONE BRAND INSTEAD OF ANOTHER AND WHAT FACTORS INFLUENCE THEIR DECISION-MAKING IS CRUCIAL FOR MARKETERS, NOT ONLY TO CATER TO THE EXISTING CONSUMERS ACQUIRE, CONSUME, AND DISPOSE OFF THE PRODUCTS AND SERVICES CREATED BY ORGANIZATIONS. THEY GO THROUGH SEVERAL COGNITIVE AND BEHAVIORAL PROCESSES WHILE MAKING THEIR PURCHASE AND CONSUMPTION DECISIONS. THE KNOWLEDGE OF HOW THEY DECIDE ON ONE BRAND INSTEAD OF ANOTHER AND WHAT FACTORS INFLUENCE THEIR DECISION-MAKING IS CRUCIAL FOR MARKETERS, NOT ONLY TO CATER TO THE EXISTING

NEEDS OF THEIR CONSUMERS BUT ALSO TO PREPARE FOR THEIR FUTURE NEEDS. THIS KNOWLEDGE IS ALSO ESSENTIAL TO MAKE VARIOUS BUSINESS DECISIONS RELATED TO PRODUCT DEVELOPMENT, PACKAGING, PRICING, DISTRIBUTION, PROMOTIONS, COMMUNICATION, ETC. NEEDS OF THEIR CONSUMERS BUT ALSO TO PREPARE FOR THEIR FUTURE NEEDS. THIS KNOWLEDGE IS ALSO ESSENTIAL TO MAKE VARIOUS BUSINESS DECISIONS RELATED TO PRODUCT DEVELOPMENT, PACKAGING, PRICING, DISTRIBUTION, PROMOTIONS, COMMUNICATION, ETC.

CONSUMER BEHAVIOR HELPS STUDENTS UNDERSTAND THE INTERNAL VARIABLES LIKE MOTIVATION, PERSONALITY, PERCEPTION, LEARNING, AND ATTITUDE, AND EXTERNAL VARIABLES LIKE REFERENCE GROUPS, FAMILY, SOCIAL CLASS, AND, CULTURE, AND THEIR INFLUENCE ON CONSUMER DECISION- MAKING PROCESS. IT ALSO DISCUSSES THE CONSUMERS’ ACCEPTANCE OF INNOVATION, AND THEIR PURCHASE AND POST-PURCHASE CONSUMER BEHAVIOR HELPS STUDENTS UNDERSTAND THE INTERNAL VARIABLES LIKE MOTIVATION, PERSONALITY, PERCEPTION, LEARNING, AND ATTITUDE, AND EXTERNAL VARIABLES LIKE REFERENCE GROUPS, FAMILY, SOCIAL CLASS, AND, CULTURE, AND THEIR INFLUENCE ON CONSUMER DECISION- MAKING PROCESS. IT ALSO DISCUSSES THE CONSUMERS’ ACCEPTANCE OF INNOVATION, AND THEIR PURCHASE AND POST-PURCHASE

BEHAVIOR. THE IMPACT OF MARKETING COMMUNICATION ON CONSUMERS, AND THE NEED FOR ITS REGULATION HAVE ALSO BEEN DISCUSSED IN THE BOOK. BEHAVIOR. THE IMPACT OF MARKETING COMMUNICATION ON CONSUMERS, AND THE NEED FOR ITS REGULATION HAVE ALSO BEEN DISCUSSED IN THE BOOK. “WE CAN BELIEVE THAT WE KNOW WHERE THE WORLD SHOULD GO. BUT UNLESS WE'RE IN TOUCH WITH OUR CUSTOMERS, OUR MODEL OF THE WORLD CAN DIVERGE FROM REALITY. THERE'S NO SUBSTITUTE FOR INNOVATION, OF COURSE, BUT INNOVATION IS NO SUBSTITUTE FOR BEING IN TOUCH, EITHER”. “WE CAN BELIEVE THAT WE KNOW WHERE THE WORLD SHOULD GO. BUT UNLESS WE'RE IN TOUCH WITH OUR CUSTOMERS, OUR MODEL OF THE WORLD CAN DIVERGE FROM REALITY. THERE'S NO SUBSTITUTE FOR INNOVATION, OF COURSE, BUT INNOVATION IS NO SUBSTITUTE FOR BEING IN TOUCH, EITHER”.