•
THEORY OF CONSUMER BEHAVIOUR
•
UNIT ONE
•
MICRO ECONOMICS
•
THEORY OF CONSUMER BEHAVIOUR
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MEANING AND DETERMINANTS
•
MICRO ECONOMICS
• SYLLABUS FOR UNIT 1
a)
THEORY OF CONSUMER BEHAVIOUR
b)
THEORY OF PRODUCTION AND COSTS
c)
THEORY OF MAKING UNDER UNCERTAINTY TOWARDS RISK
d)
THEORY OF NON COOPERATIVE GAMES
e)
MARKET STRUCTURES,COMPETITIVE AND NON COMPETITIVE EQUILIBRIUM AND THEIR
EFFICIENCY PROPERTIES
f)
MICRO ECONOMICS
g)
FACTOR PRICING
h)
GENERAL EQUILIBRIUM
i)
EFFICIENCY CRITERIA : PARETO OPTIMALITY, KALDOR AND HICKS AND WEALTH
MAXIMIZATION
j)
FUNDAMENTAL THEOREMS,SOCIAL WELFARE FUNCTION
k) ASYMMETRIC INFORMATION : ADVERSE SELECTION AND MORALE HAZARD
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THEORY OF CONSUMER BEHAVIOUR
• UNIT 1 MICRO ECONOMICS
• SHASHI AGGARWAL ECONOMICS AND LAW CLASSES
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CONSUMER BEHAVIOUR
a)
STUDY OF PEOPLE AND PRODUCTS THAT HELPS
TO SHAPE THEIR IDENTITIES.
b)
DIVERSITY AMONG CONSUMERS
c) CONSUMER BEHAVIOUR IS AN INTERDISCIPLINARY SCIENCE THAT INVESTIGATES THE CONSUMPTION RELATED ACTIVITIES OF INDIVIDUAL. STUDY OF PROCESSES INVOLVED WHICH INDIVIDUAL OR GROUP SELECT,PURCHASE AND USE PRODUCTS ,SERVICES AND IDEAS TO SATISFY NEEDS AND DESIRES
•
CONSUMER BEHAVIOUR IS DEFINED AS THE BEHAVIOUR THAT CONSUMERS DISPLAY IN
SEARCHING FOR,PURCHASING,USING,EVALUATING AND DISPOSING OF PRODUCT AND SERVICES
THAT THEY EXPECT WILL SATISFY THEIR NEEDS. IT FOCUSES ON HOW INDIVIDUALS MAKE
DECISIONS O SPEND THEIR AVAILABLE RESOURCES ON CONSUMPTION RELATED ITEMS:-
1.
WHAT THEY BUY?
2.
WHY?
3.
WHEN,WHERE,HOW?
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CONSUMER BEHAVIOUR
• CONSUMER IS USED TO DESCRIBE TWO DIFFERENT CONSUMING ENTITIES:
a)
PERSONAL CONSUMER : BUYS GOODS AND SERVICES FOR HIS OR HER USE
b)
ORGANIZATIONAL CONSUMER ARE BUSINESS HOUSES,GOVERNMENT AGENCIES AND
INSTITUTIONS.ALL THE ORGANIZATION PURCHASE THEIR PRODUCTS OR SERVICES IN ORDER
TO RUN THEIR ORGANIZATION
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CONSUMER BEHAVIOUR DEFINITION
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BEHAVIOUR IS A MIRROR IN WHICH EVERY ONE SHOWS HIS OR HER IMAGE
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BEHAVIOUR IS THE PROCESS OF RESPONDING TO STIMULI
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PROF C.G WALTER,” CONSUMER BEHAVIOUR IS THE PROCESS WHERE BY INDIVIDUAL
DECIDES WHEN,WHAT,WHERE ,HOW AND FROM WHERE TO PURCHASE GOODS AND SERVICES
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CONSUMER BEHAVIOR IS ALL THE PSYCHOLOGICAL SOCIAL AND PHYSICAL BEHAVIOUR OF
POTENTIAL. CUSTOMERS AS THEY BECAME AWARE TO EVALUATE ,PURCHASE,CONSUMER AND
TELL OTHERS ABOUT THE PRODUCT AND SERVICES.BY .G.W PAUL
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CONSUMER BEHAVIOR HAS TWO IMPORTANT ASPECTS :
1.
FINAL PURCHASE ACTIVITY WHICH IS VISIBLE TO US
2.
THE DECISION PROCESS WHICH IS THE
INTERPLAY OF A NUMBER OF COMPLEX VARIABLES
3.
PURCHASE BEHAVIOUR IS THE NET RESULT
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CONSUMER BEHAVIOR VERSUS CONSUMPTION BEHAVIOUR
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CONSUMER
1.
MICRO IN NATURE
2.
DO WITH INDIVIDUAL PERSON
3.
FOCUS ON DECISION PROCESS
4.
REASON OF BUYING
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CONSUMPTION BEHAVIOUR
1.
DEAL WITH MASS OF AGGREGATE OF SUCH INDIVIDUALS
2. AGGREGATE CONSUMPTION BEHAVIOUR
3.
REASON OF AGGREGATE OF THE CONSUMER
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CONSUMER VS CUSTOMER
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CONSUMER
1.
CONSUMER IS ANY ONE WHO IS ENGAGED IN ANY ONE OR ALL THE ACTIVITIES OF
PURCHASE
2.
WHO CONSUMES GOODS AND SERVICES
3.
MONETARY EXCHANGE EXCLUDING FEW
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CUSTOMER :
a)
MAY BE ORGANIZATION AND PERSONAL
b)
ANY ONE WHO REGULARLY PURCHASE GOODS FROM A STORE OR A COMPANY
c)
A CUSTOMER MAY BE CONSUMER OR NOT CONSUMER
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PROCESS
BUYING PROCESS
- INPUT
- PROCESS
- OUTPUT
- BUYING PROCESS IS PROBLEM SOLVING P,PROCESS.DECISION MAKING LEADING TO
BUYING DECISIONS
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PROCESS
1.
NEED RECOGNITION
2.
INFORMATION SEARCH
3.
EVALUATION AND INTENTIONS
4.
PURCHASE DECISION
5.
POST PURCHASE DECISION
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PROCESS
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NEED RECOGNITION
1.
PERCEIVED WANT OR DESIRE
2.
AWARENESS OF NEEDS AND WANTS
3.
NEEDS OR WANTS ARISE EITHER DUE TO INTERNAL STIMULUS OR EXTERNAL STIMULUS
4.
URGENCY DECIDES THE SPEED AT WHICH IT IS TO BE SATISFIED
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INFORMATION SEARCH
1.
A NEED AROUSED AND RECOGNIZED CAN BE SATISFIED ONLY WHEN THE PRODUCT AND
SERVICE IS AVAILABLE
2.
SEARCHES RELEVANT INFORMATION
3.
SOURCES –FRIENDS,RELATIVES.ON LINE VARIOUS E COMMERCE SITES
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EVALUATION AND INTENTION
1.
STAGE OF THE MENTAL TRIAL OF THE PRODUCT AND SERVICES
2.
CONSUMER ASSIGNS RELATIVE VALUES AND WEIGHT-AGE TO DIFFERENT PRODUCT
3. DEVELOPS THE INTENTION TO ACCEPT OR REJECT A DECISIONS
4.
MANY THINGS : BRAND IMAGE,TRADE OFFS,CONVENIENCE FACILITIES AND CONCESSION
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PURCHASE DECISIONS
1.
DECISION TO PURCHASE IMPLIES CONSUMER COMMITMENT FOR A PRODUCT OR SERVICES
2.
LAST STAGE
3.
TRIAL PURCHASE IS DONE WHEN THE CONSUMER BUYS THE PRODUCT OR SERVICES FIRST
TIME
4.
CONSUMER NON DURABLE ( TRIAL PURCHASE)
5.
CONSUMER DURABLE CAN NOT BE PURCHASED ON TRIAL BASIS
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POST PURCHASE DECISIONS
1.
REACTION STANDS FOR THE BEHAVIOR OF CONSUMER AFTER A COMMITMENT TO PRODUCT
2.
MAY BE POSITIVE FEELING : WILL RESULT IN REPEAT SALES
3.
MAY BE NEGATIVE FELLING :ANXIETY AND DOUBT AND TRIES TO REDUCE BY GOING FOR
ALTERNATIVE PRODUCTS
4.
LEON FASTINGER : THEORY OF COGNITIVE DISSONANCE : CONDITION TOWARDS THE
MENTAL UNEASE WHICH OCCURS WHNE AN INDIVIDUAL HOLD TWO ATTITUDES :WHEN AN
ATTITUDE WHICH IS NOT CONSONANT WITH ONE’S BEHAVIOUR
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DETERMINANTS OF CONSUMER BEHAVIOUR
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DETERMINANTS
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ECONOMIC DETERMINANTS
1.
PERSONAL INCOME
2.
FAMILY INCOME
3.
CONSUMER INCOME EXPECTATION
4.
CONSUMER LIQUID ASSETS
5.
CONSUMER CREDIT
6.
THE LEVEL OF STANDARD OF LIVING
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ECONOMIC DETERMINANTS
§ PERSONAL INCOME : INCOME MEANS PURCHASING POWER
1.
DISPOSAL INCOME IS THE AMOUNT OF MONEY THAT A CONSUMER HAS AT HIS DISPOSAL
FOR SPENDING SAVING OR BOTH
2.
ANY CHANGE IN THE DISPOSABLE INCOME WILL HAVE CHANGE IN CONSUMER SPENDING
AND CAUSES CHANGE IN THE RELATIVE DEMAND FOR DIFFERENT CATEGORIES OF PRODUCT
AND SERVICES
3. DISCRETIONARY INCOME IS THE INCOME WHICH IS AVAILABLE AFTER THE BASIC NEEDS
OF THE LIVING
4.
A RISE IN DISCRETIONARY INCOME IS LIKELY TO CHANGE THE LIFE STYLE OF THE
§ FAMILY INCOME: WHERE A CONSUMER IS THE MEMBER OF JOINT FAMILY THE BUYER
BEHAVIOUR IS INFLUENCED BY THE FAMILY INCOME RATHER THAN INDIVIDUAL INCOME
1.
FAMILY
INCOME IS THE AGGREGATION OF DIFFERENT INDIVIDUALS
2.
RISE IN
ONE INDIVIDUAL IS NEUTRALIZED BY FALL IN THE INCOME OF THE OTHER
3.
SIZE AND TOTAL INCOME OF THE FAMILY DETERMINE
THE BUYING BEHAVIOUR
§ CONSUMER INCOME EXPECTATIONS : FUTURE INCOME EXPECTATION OF THE CONSUMER THAT
INFLUENCE SUCH CONSUMER BEHAVIOUR. PESSIMISM OR OPTIMISM ABOUT CONSUMER INCOME
THAT DETERMINE THE LEVEL OF CURRENT SPENDING
§
CONSUMER LIQUID ASSETS : ASSETS HELD IN THE FORM OF MONEY OR NEAR
MONEY. MORE LIQUID ASSETS MORE SPENDING
§ CONSUMER CREDIT :AVAILABILITY OR PAUCITY OF CONSUMER CREDIT HAS
IMPACT ON CONSUMER BUYING BEHAVIOUR.
§
THE LEVEL OF STANDARD OF LIVING :THE CONSUMER BEHAVIOUR HAS THE IMPACT OF
ESTABLISHED STANDARD OF LIVING TO WHICH HE IS ACCUSTOMED.
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PSYCHOLOGICAL DETERMINANTS
1.
MOTIVATION
2.
PERCEPTION
3.
LEARNING
4.
ATTITUDE
5.
PERSONALITY.
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MOTIVATION
1.
WHY OF BEHAVIOUR ?
2.
MOTIVATION REFERS TO THE URGES,DRIVES,WISHES OR DESIRES WHICH INITIATE THE
SEQUENCE OF EVENTS KNOWN AS BEHAVIOUR
3.
MOTIVATION IS AN ACTIVE.STRONG DRIVING FORCE THAT EXISTS TO REDUCE A STATE
OF TENSION AND TO PROTECT AND SATISFY AND ENHANCE THE INDIVIDUAL AND HIS SELF
CONCEPT.MOTIVES CAN BE CONSCIOUS OR UNCONSCIOUS,RATIONAL OR EMOTIONAL
4.
ABRAHAM MASLOW DEVELOPED FIVE STEPS HUMAN NEED HIERARCHY . FULFILLMENT OF ONE
NEEDS WILL LEAD TO THE FULFILLMENT OF HIGHER MOTIVES
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PERCEPTION
- PERCEPTION LEADS TO THOUGHT AND THOUGHT LEADS TO ACTION
- PERCEPTION ARE THE PROCESS WHERE STIMULI ARE RECEIVED AND INTERPRETED
BY THE INDIVIDUAL AND TRANSLATED INTO RESPONSE
- PERCEPTION IF THE PROCESS BY WHICH THE MIND RECEIVES,ORGANIZES AND
INTERPRETS PHYSICAL STIMULI
- PERCEPTION IS THE SELECTIVE
- PERCEPTION ALSO DEPENDS ON PERSONAL FACTORS : SELF CONCEPT,NEED ,MENTAL
SET UP AND PAST EXPERIENCES.
- PERCEPTION AND COMMUNICATION : 90 % OF STIMULI THAT THE INDIVIDUAL PERCEIVE COME THROUGH SIGHT AND REST HEARING. THAT IS WHY ADVERTISEMENTS
BANK HEAVILY AUDIO AND VISUAL STIMULI
- PRODUCT AND BRAND PERCEPTION :BRAND IMAGE AND BRAND DIFFERENTIATION
THAT PLAY VITAL ROLE IN PERCEPTION IN ADDITION TO THE PHYSICAL
- PRICE PERCEPTION :CONSUMER JUDGE PRODUCT QUALITY ON THE BASIS OF PRICE
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PERCEPTION
STORE PERCEPTION : FIVE MAJOR COMPONENTS OF
STORE IMAGES
a)
LOCATION
b)
DESIGN
c)
PRODUCT ASSORTMENT
d)
SERVICES
e)
PERSONNEL
f)
CONSUMER PERCEPTION OF STORES ARE GREATLY INFLUENCED BY CONSUMER’S OWN SELF
PERCEPTION AND MOTIVES AND SELF IMAGE ALSO INFLUENCE THE PLACES IN WHICH THEY
SHOP
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LEARNING
- LEARNING MEANS ANY CHANGE IN BEHAVIOUR WHICH COMES ABOUT A RESULT OF
EXPERIENCE
- LEARNING IS THE PROCESS OF ACQUIRING KNOWLEDGE
- LEARNING DRIVE—CUE—RESPONSE AND
4.
HAS DEEP IMPACT ON CONSUMER BUYING PROCESS
5.
PRIOR EXPERIENCE AND LEARNING ACTS AS BUYING GUIDE
6.
THE STRONG TENDENCY OF MOST CONSUMERS TO DEVELOP BRANDS LOYALTY DEFINITELY
BENEFITS THE MAKERS OF ESTABLISHED BRANDS
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ATTITUDE
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ATTITUDE OCCUPIES A CENTRAL POSITION IN THE CONSUMER BEHAVIOUR
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ATTITUDE MEASUREMENTS HELP IN UNDERSTANDING AND PREDICTION OF CONSUMER
BEHAVIOUR
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REFERS TO PREDISPOSITION TO BEHAVE IN A PARTICULAR WAY WHEN PRESENTED WITH A
GIVEN STIMULUS AND THE ATTITUDE TOWARDS PEOPLE,PLACES,PRODUCTS AND THINGS
1.
ATTITUDE : COGNITIVE : WHAT AN INDIVIDUAL BELIEVES ABOUT AN OBJECT,THING (
BASED ON REASONING)
2.
AFFECTIVE : EMOTIONAL OR FEELING
3. BEHAVIORAL : AN INTENTION TO BEHAVE IN CERTAIN WAY TOWARDS SOME ONE OR
SOMETHING
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MARKETING MANAGER’S SUCCESS IS DETERMINED PARTLY BY HIS ABILITY TO UNDERSTAND
,PREDICT AND INFLUENCE THE CONSUMER ATTITUDES
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ATTITUDE CHANGING IS MORE DIFFICULT AND ATTITUDE CREATION IS TO MAKE THE
CONSUMER TO FORGET THE OLD PRODUCT OR BRANDS AND TO MAKE THEM TO GO FOR THE NEW
PRODUCTS OR BRANDS
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PERSONALITY
1.
PERSONALITY CONSISTS OF MANNERISM,HABITS AND ACTIONS THAT MAKE A PERSON AN
INDIVIDUAL AND SERVE TO MAKE HIM DISTINCT FROM OTHERS
2. PERSONALITY IS THE INTERPLAY ID,EGO AND SUPEREGO.
3.
PERSONALITY MAY BE EXPRESSED IN TRAITS
–AGGRESSIVE,HONESTY,DEPENDABILITY.\ETC. MAY BE INTROVERT OR EXTROVERT
• SOCIOLOGICAL DETERMINANTS
•
EXPLAIN THE BEHAVIOUR OF GROUP OF INDIVIDUALS AND THE WAY AND IN WHICH IT
AFFECTS AND CONDITIONS AND INDIVIDUAL’S BEHAVIOUR IN MARKETING OR PURCHASE
DECISIONS,
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GROUP OF INDIVIDUAL DETERMINE :
1.
FAMILY
2.
REFERENCE GROUPS
3.
OPINION LEADERS
4.
SOCIAL CLASS
5.
CASTE AND CULTURE
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FAMILY
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MANY OF THE DECISIONS MADE BY THE
CONSUMERS ARE TAKEN WITH IN THE ENVIRONMENT OF THE FAMILY AND ARE AFFECTED BY
DESIRES ,ATTITUDES AND VALUES OF THE OTHER FAMILY
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FAMILY CAN BE NUCLEAR AND EXTENDED FAMILY
•
FAMILY BASE ON FAMILY LIFE CYCLE: HOME MAKING
PHASE FROM MARRIAGE
TO BIRTH OF THE FIRST CHILD TO THE MARRIAGE OF THE FIRST CHILD TO THE MARRIAGE OF THE LAST CHILD TO DEATH OF
ORIGINAL
•
FAMILY INFLUENCE ON THE INDIVIDUAL PERSONALITY CHARACTERISTICS ,ATTITUDES AND
EVALUATIVE
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THE FAMILY INFLUENCE IN DECISION MAKING PROCES
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ROLES :
1. INITIATORS THE PERSON WHO SENSE THE NEED FOR PURCHASE
2. INFLUENCER : PROVIDES INPUT INTO THE PURCHASE DECISION
3.
DECIDER : FINAL SAY OVER THE DECISION
4.
USER : THE PERSON WHO IS MOST DIRECTLY INVOLVED IN USING THE PURCHASE
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SOCIOLOGICAL DETERMINANTS
•
REFERENCE
GROUPS: REFERENCE GROUPS ARE THOSE GROUPS WHICH AN INDIVIDUAL IDENTIFIES
WITH TO THE EXTENT THESE GROUPS BECOME A STANDARD OR NORM:
1.
SERVE AS COMPARISON POINTS
2.
GROUPS TO WHICH A PERSON ASPIRES TO BELONG
3.
GROUP WHOSE SOCIAL PERSPECTIVES ARE ASSUMED BY THE INDIVIDUALS AS A
FRAMEWORK OF REFERENCE OF HIS ACTION
•
OPINION LEADERS : PLAYS KEY ROLE
•
THE INDIVIDUAL TO WHOM SUCH REFERENCE IS MADE BY A PERSON IS THE OPINION
LEADERS
• SOCIAL CLASS AND CASTE : SOCIAL CLASS IS A RELATIVELY PERMANENT AND
HOMOGENEOUS DIVISION OF A SOCIETY INTO WHICH INDIVIDUALS OR FAMILIES SHARES
SIMILAR VALUES AND IT IS DETERMINED BY
INCOME.AUTHORITY,POWER AND ONWERSHIP AND LIFE STYLE AND EDUCATION.
RICH,MIDDLE AND POOR
•
CULTURE :REFERS TO AL THOSE SYMBOLS AND BEHAVIORAL PATTERN PASSED FROM ONE GENERATION TO THE OTHER
• CULTURAL AND SUBCULTURE HAVE THEIR UNIQUE
CONSUMPTION PATTERN THAT PROVIDES IMPORTANT BASES TO THE MARKETER.
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