CONSUMER BEHAVIOUR Consumer behaviour Consumer

slide1. CONSUMER BEHAVIOUR<br>
slide2. Consumer behaviour

Consumer behaviour is the behavioral patterns, decision processes, and actions that a consumer follows while making a purchase decision for a product or service for self-consumption. Understanding consumer buying behavior is a psychological study of the series of customers’ behavioral patterns that influence their decision-making before purchasing any products. Being aware of consumers’ behavior is one of the most crucial factors in effective marketing, advertising, or branding campaign. It helps businesses in running a more personalized campaign to convert the target audience to buy products or services.

What is Consumer Behaviour?

Consumer behavior is the thought processes, conditioning, behavioral inclinations, decisions, and actions of focus groups or target audiences that influence or compel them to make a purchase. An example of consumer behavior would be when someone goes to the grocery store and decides what types of food they want. The person is making decisions based on their personal preferences, considering factors such as cost, convenience, nutritional value, and taste. This behavior then influences how much time they spend in the store, which items they purchase, and even if they return later for more items.<br>
slide3. Understanding the psychological factors, as well as social factors of a marketing consumer, helps marketers better understand the elements that influence customers buying decisions.People think several times before purchasing anything from a brand or company. Keeping track of customers’ decision-making processes and decoding them for boosting revenue is a part of the study of Consumer Behavior. So, it is mainly a study of behavioral sciences that concerns each customer’s psychology, behaviors, and motivations individually.<br>
slide4. Consumer Buying Behaviour in Marketing:

Consumer buying behaviour is the process and actions individuals undertake when making purchasing decisions. It begins with the recognition of a need or wants, followed by an information search, evaluation of alternatives, purchase decision, post-purchase evaluation, and potential repurchase or disposal. It plays a vital role in marketing, allowing businesses to comprehend why and how consumers select specific products or services. By studying consumer behaviour, marketers gain valuable insights into the factors that impact purchase decisions, including personal preferences, needs, motivations, and external influences like social, cultural, and economic factors. Armed with this knowledge, businesses can develop effective marketing strategies, customize offerings to meet consumer needs and create targeted campaigns that resonate with their audience.<br>
slide5. Objectives of studying consumer behaviour:

• Understanding consumer needs and preferences
• Predicting consumer buying behaviour
• Exploring decision-making processes
• Segmenting and Targeting markets
• Assessing customer satisfaction and loyalty
• Adapting to changing consumer trends
• Strategizing businesses for grow<br>
slide6. Importance of studying consumer behaviour

• Comprehending consumer needs: Businesses utilize consumer behaviour research to gain valuable insights into the needs, desires, and motivations of their target audience. Consequently, understanding empowers companies to create products and services that successfully cater to consumer demands, resulting in enhanced customer satisfaction.

• Fabricating effective marketing strategies: Leveraging the study, businesses can discern the most efficient marketing techniques and channels to reach their target audience. Furthermore, this knowledge aids in the development of targeted and compelling advertising campaigns, pricing strategies, and promotional activities that connect with consumers and boost sales.
• Identifying market opportunities: By conducting consumer behaviour research, businesses can detect emerging trends, evolving preferences, and untapped market needs. Thereby enabling companies to spot new opportunities for products or services, enhance existing offerings, and maintain a competitive edge in the market.<br>
slide7. • Enhancing customer experience: Through this study, companies can acquire valuable insights into the complete customer journey, encompassing the stages from pre-purchase to post-purchase. This understanding empowers businesses to enhance the customer experience, personalize interactions, and deliver exceptional service. As a result, this fosters customer loyalty and generates positive word-of-mouth.

• Minimizing risks and failures: Understanding consumer behaviour helps businesses minimize risks associated with product failures or unsuccessful marketing campaigns. Through the analysis of consumer preferences, feedback, and behaviour, companies can make informed decisions concerning product design, features, packaging, and marketing strategies, consequently minimizing the likelihood of failure.

• Building strong brand relationships: The research assists in establishing robust, long-term relationships with customers. Through understanding consumer preferences, values, and purchasing behaviours, companies can customize their brand messaging, communication, and offerings, enabling them to forge a powerful emotional bond with consumers.<br>
slide8. Major Factors Influencing Consumer Behaviour
Here is a list of five major factors that shape the way consumers choose and use products:

• Cultural Factors
• Social Factors
• Personal Factors
• Psychological Factors
• Economic Factors

Cultural Factors The biggest and deepest influence on consumer behaviour comes from cultural factors. It impacts consumer behavior by setting expectations and norms that dictate buying habits. This group of factors mostly consists of broad culture, subculture, and social class culture.
a) Broad Culture Culture is a highly complex conception of human activity as it includes human society, the roles that society performs, how society behaves, and its values, traditions, and conventions. Culture must be examined since it has a substantial influence on consumer behaviour.
b) Subculture A subculture is a group that shares the same beliefs, customs, and values. They are the nation, religion, racial groupings, and individuals who live in the same geographical area.
c) Social Class Culture Every culture has a social class, according to society. It is essential to understand what social class is being targeted because, in general, a social class’s purchasing habits are relatively similar. A group of customers‘ social class is determined by their income and other factors. For Example, In India, McDonald’s offers a range of vegetarian and non-beef products to respect the dietary habits and religious beliefs prevalent in the country. Items like the McAloo Tikki burger, a spiced potato-based burger, are specifically designed to appeal to Indian consumers.<br>
slide9. 2. Social Factors
Consumer Behaviour is also influenced by social factors. A number of social factors, including family, reference groups, and roles and statuses, have a significant impact on how consumers respond to products, brands, and businesses. To effectively meet their requirements, marketers must examine these social factors of their target market:

a) Family One of the most significant social elements influencing purchasing behaviour is the family. Where there is a joint family structure, where children live with family for a longer period of time, this is more important. Values, customs, and tastes are innately passed on from parents to their children. The most significant primary reference group is made up of family members. Family is where a person learns their values, including those related to religion, politics, ambition, self-worth, love, and respect. One’s behaviour is influenced by needs, choices, buying habits, consumption rate, and many other factors that are determined by the family.
b) Reference Groups A reference group is a group of individuals with whom a person identifies. The reference group’s members typically have similar purchasing habits and influence one another.
c) Income Level Consumer demands and wants are influenced by income. The preferences of wealthy and poor customers are very different. Between wealthy and less wealthy consumers, there is a significant gap in terms of quality, brand image, novelty, and pricing. It is essential for a marketer to understand the expectations of customers with different income levels and then target them accordingly.<br>
slide10. d) Roles and Status The position a person holds in society has an impact on them. If a person holds a high position, his decision will have a big impact on the purchasing decision. A corporation’s Chief Executive Officer will make purchases consistent with his position; however, a staff member or employee of the same organisation will make purchases differently.

For Example, When a well-known fashion influencer wears a particular brand of sneakers and shares it on their social media platforms, their followers may be more inclined to buy that brand, believing it to be trendy or of high quality based on the influencer’s endorsement.<br>
slide11. 3. Personal Factors The consumers’ own personal factors have an impact on their purchasing decisions. These personal factors differ from person to person, resulting in different opinions and consumer behaviours.

a) Age Individuals’ purchasing decisions are influenced by the age group to which they belong. When compared to youngsters, elderly people’s purchasing behaviour would be completely different.

b) Income The shopping habits of a person are influenced by their income. The purchasing power of customers increases with wealth. When a customer has more money on hand, they have the potential to spend more on expensive products. Whereas, consumers who fall into the low or middle-income bracket spend the majority of their income on necessities like food and clothing.

c) Occupation A consumer’s occupation affects his or her purchasing behaviours. A person prefers buying items that are related to his or her work. A senior corporate executive, for example, might purchase formal apparel, but a creative designer would choose casual clothing.
d) Lifestyle A person’s attitude and manner of life define who they are in society. A consumer’s lifestyle has a significant impact on their buying behaviours. A person who lives a healthy lifestyle will spend more money on healthier food choices.
For Example, Imagine a college student living away from home with a tight budget. Their personal factors—age, life stage, and financial situation—strongly influence their buying behavior. They might look for deals on groceries, prefer affordable fast food over expensive restaurants, and choose second-hand textbooks or digital versions to save money.<br>
slide12. 4. Psychological Factors Understanding consumer behaviour relies heavily on human psychology. Psychological factors are difficult to measure, yet they are powerful enough to affect a purchasing choice. Some of the most important psychological factors are:

a) Motivation Motivation to do something frequently impacts a person’s purchasing behaviour. Individuals have several kinds of needs, including social, basic, and security requirements, as well as esteem and self-actualization needs. The fundamental requirements and security needs take priority over all other wants and these encourage a customer to purchase things and services.
b) Perception Our perception is formed when we receive information about a product and analyse it in order to generate an appropriate image of that product. We build an image of a product whenever we see an advertisement, review, comment, or promotion. As a result, our perception influences our purchase decisions significantly.

c) Attitudes and Beliefs Consumer attitudes and opinions also have an impact on purchasing decisions. The consumer acts in a specific way towards a product based on their mindset. Mindset is very important in developing a product’s brand image. Therefore, a marketer works hard to understand customer attitudes in order to build marketing initiatives.
For Example, If someone is preparing for a marathon and believes that having the right equipment is crucial for success and injury prevention, they might be motivated to invest in a pair of running shoes from a brand that is endorsed by top athletes and marketed as being at the forefront of technology and design.<br>
slide13. 5. Economic Factors The buying behavior of consumers greatly depend on the economic condition of the a country and a market. Counsumers of a prosperous nation with strong economy are more likely to have high purchasing power, as there is greater money supply in its market. However, the market of a weak economy struggles and affects employment and purchasing power of the people.
Some of the economic factors influencing consumer buying behaviour include:

Personal Income This refers to the amount of money an individual earns. The two types of personal income that a consumer has are Disposable Income and Discretionary Income. Disposable Income is the income that remains in the hands of an individual after paying all the necessary payments (including taxes). If the disposable income is more, then the consumer will spend more on purchase, and vice versa. Discretionary Income is the income that remains in the hands of an individual after paying for all the basic necessities of life. This income is used for purchasing durables, luxury products, shopping goods, etc. If this income increases, then the consumer will spend more on purchase, and vice-versa.

Family Income It is the total income of all members of a family. When more members of a family are earning, then there is more money/income available to purchase basic need goods and luxury items.

Income Expectations An individual’s expectations with his expectations for future income level, greatly impacts his buying behavior. If the individual expects his income to increase in future, he will spend more of his money to purchase luxury goods, shopping goods, and durables, and vice-versa.<br>
slide14. d) Consumer Credit The credit facility given to the consumers affects their buying behavior. If they are given good credit terms and better EMI options, then the probability of them buying luxury goods, shopping goods, and durables is more.

e) Liquid Assets These are the assets that individuals can quickly turn into cash. People with more illiquid assets are likely to spend more on durables, luxury goods, and shopping goods, and vice-versa. Some of the examples of liquid assets include cash in hand, securities, and bank savings.

f) Savings It is the amount saved by an individual from his income. If an individual saves more from his income, then his expenditure on other items will reduce, and vice-versa. For Example, During tough economic times, like recession, people often have less money to spend. They might stop buying things they don’t really need or look for cheaper options. A family planning to buy a new car might wait until their financial situation improves. Instead, they will focus on essentials like food and bills.<br>