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Concept of Consumer Behaviour

Importance of Resources in Consumer Behavior

Resources refer to:

  • Time: How much time a consumer spends on decision-making.
  • Effort: The cognitive and physical effort in making choices.
  • Money: The financial expenditure on consumption items.

Consumer vs. Customer: Key Difference

Consumer

  • Definition: Anyone who consumes goods or services.

Customer

  • Definition: Someone who has a specific and regular association with a brand, store, or company.

Illustrating Consumer Behavior Through Purchasing Patterns

Let’s examine how price-conscious consumers may behave when buying a TV.

Four Consumer Archetypes Based on Price Sensitivity

  1. Price Limit-Oriented:

    • Sets a strict budget (e.g., under ₹50,000).
    • Considers only TVs within this budget.

  2. Filtered Quality-Oriented:

    • Considers multiple factors (brand, quality, store reputation).
    • Narrows down options and then chooses the lowest-priced TV.

  3. Store Loyalty-Oriented:

    • Always shops at a specific store (e.g., Croma).
    • Buys the TV with the best discount in that store.

  4. Sale Event-Oriented:

    • Waits for major sales (e.g., Amazon’s Independence Day sale).
    • Buys the lowest-priced TV during the event.

Insight

  • All four are price-conscious but approach purchasing differently.
  • This highlights the diversity in consumer behavior even within a single target group.

Implications for Strategy Development

Identifying Gaps

  • Knowing how consumers make decisions allows businesses to refine their strategies.
  • Understanding how and why consumers purchase helps address gaps in the marketing approach.

Importance of Consumer Behavior Study

  • Provides actionable insights for:
    • Improving targeting.
    • Refining positioning.
    • Enhancing the 4Ps/7Ps of marketing.

Broader Scope of Consumer Behavior

Marketing borrows concepts from disciplines like:

  • Psychology: Understanding individual behavior.
  • Sociology: Understanding group dynamics.

Types of Consumers

Focus: Individual or Personal Consumers

  • Purchase for personal use (e.g., toothpaste, cooking oil).

Other Types of Consumers

  1. Organizational Consumers:

    • Entities like hotels, schools, hospitals, or jails purchasing for operational purposes.

  2. Industrial Consumers:

    • Businesses buying raw materials to produce final products (e.g., oil for soap manufacturing).

4.1.2 Delving Deeper into Consumer Behaviour: Understanding the Definition

Definition of Consumer Behavior

Consumer behavior is the study of buying units and the exchange process involved in evaluating, acquiring, consuming, and disposing of goods, services, and ideas.

While the definition may seem complex, let’s break it down into simpler components for better understanding.

Key Components of Consumer Behavior

1. Buying Units

Buying units refer to the individuals or groups involved in the purchasing process.
Examples:

  • Individuals: A person buying a shirt for themselves.
  • Groups:
    • A family purchasing clothes for a wedding.
    • A group of friends shopping together for similar items.

2. Exchange Process

The exchange process involves interactions between buyers and sellers, where both parties have the freedom to choose.
Types of exchanges include:

  • Organization to Consumer (B2C): Example - Procter & Gamble selling toothpaste to you.
  • Organization to Organization (B2B): Example - A company buying raw materials from a supplier.
  • Consumer to Consumer (C2C): Example - Selling products through social media or live-streaming platforms.

In the context of this discussion, the focus is on organization to consumer (B2C) exchanges.

Activities in Consumer Behavior

The study of consumer behavior examines four key activities:

1. Evaluating

How consumers compare different options before making a purchase.
Example: Choosing a toothpaste brand.

  • Factors considered:
    • Price
    • Size
    • Taste
    • Color
    • Brand reputation
    • Availability (supermarket, online platforms, local stores).

2. Acquiring

Where and how consumers purchase goods.
Examples:

  • Physical stores: Kirana shops, supermarkets.
  • Online platforms: Amazon, Flipkart, BigBasket.
  • Quick commerce: Blinkit, Swiggy Instamart.

3. Consuming

How consumers use the product after purchase.
Example: Toothpaste usage.

  • Brushing habits:
    • Once in the morning.
    • Twice a day (morning and night).
    • Three times a day.

4. Disposing

What consumers do with the product after use.
Examples:

  • Squeezing the last bit out of a toothpaste tube before disposing of it.
  • Disposing of products before they are fully used.

Why Understanding These Activities is Important

Case Study: Pepsodent Toothpaste

In the 1990s, Pepsodent introduced a unique marketing proposition:

  • Message: Germs return to teeth after eating, so you should brush twice a day (morning and night).

Impact:

  • Previously, families used one toothpaste tube per month.
  • By encouraging brushing twice a day, consumption doubled to two tubes per month.
  • Result:
    • Sales increased from 50,000 tubes to 1,00,000 tubes per month.
    • Market size and usage rate expanded without increasing the customer base.

This highlights how consumer behavior—especially consumption patterns—influences marketing strategy, market size, and market share.

Implications for Marketing Strategy

Influence on Marketing

Understanding consumer behavior allows businesses to:

  1. Identify factors that influence purchasing decisions.
  2. Create strategies to optimize product usage.
  3. Tailor marketing efforts to match consumer preferences.

Broader Impact

Consumer behavior not only determines how consumers interact with products but also shapes:

  • Product design.
  • Distribution strategies.
  • Marketing messages.
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