CB: Session 1 Introduction to Consumer Behaviour

Youth is crazy about denims!! Aren't they? They like them brand new, they wear them rugged, they like them faded and what not. All jeans companies are targeting youth and the advertisement show young, vibrant, liberated youth. However, over the years, there has been a significant change in the product line of well know jeans brand. Pepe, Levis, wrangler, and most of others have started including semi formals and formals in their product line. Why? Answer is simple, they studied their consumers well. There is a lot of demand for semi-formal and formal outfit these day as young generation is working as soon as they complete their graduation. There are also internships in between. Casual wear is restricted to Fridays, Saturdays and Sundays. These companies realised that denim market is not growing much. Hence, to sustain in the changing environment they had to come up with the products that suit current demand.

For the Formal wear markets also the trend is changing. A recent report in Economic Times, highlighted that the fact that many companies are ok with the formal and the semi-formal culture when it comes to dressing in office. Dressing to work

People as consumers are not very consistent in their buying behaviour. They also behave differently from each other. As individual they have different income, tastes, preferences, needs, situations, cultures and beliefs. Like Pepe, Levis, for others also, it is imperative to study consumer behaviour as they offer product and services to these individuals. Over the period of the time, the same individual may change in terms of his/her needs. A person may prefer more casual and less of formals when in college and may prefer more formals when he starts working in corporate. A girl may go to a different family after marriage and hence may change her belief about certain products!

Times have also changed. This is an era which is highly technology driven and consumers are highly affected and influenced due to the information boom. Use of internet and e-commerce has completely changed the outlook towards markets and marketers. Today’s consumers are more knowledgeable, demanding and vulnerable at the same time.

Defining Consumer Behaviour

According to Schiffman and Kaunk, “Consumer behaviour is defined as the behaviour that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs”

As per American Marketing Association, “Consumer Behaviour is the dynamic interaction of affect and cognition, behaviour, and the environment by which human beings conduct the exchange aspect of their lives"

While the definitions are given to define consumer behaviour, it is largely understood as the mental and emotional process, that consumers go through when they spend their limited hard earn resources to purchase product and services that can satisfy some predetermine goals. It is a process rather than phenomena. It involves analysis, deliberations, pre and post behaviour learnings and functional and emotional appeal attached to the product or service.

Internet has enabled consumer to look for number of options from where they can buy products and services and it is also a strong medium to inform consumers about product and services. As per the research reports, the number of online shoppers are increasing very rapidly in Indian cities. 

Scope and Applications

Consumer Behaviour is a relatively new field of study. It has emerged as a result of researches in the field of human psychology, sociology, cultural anthropology, economics and management. Hence the scope involves all the above and the most important to us, marketing field. Study of consumer behaviour is adopted by many companies to understand consumer needs and wants.

Consumer Behaviour is applied in all the areas of marketing defined by AIMs

A	Assessing Value Proposition	Assessment of marketing opportunity by understanding consumer perception of value proposition.	Practo.com
I	Identification of Marketing Strategy	Selecting and targeting consumer segments with effective differentiation and positioning strategies.	Scooty – a college bike!
M	Managing Marketing Mix	Consumer oriented product offerings, pricing, promotion and distribution strategies.	No Frills flights
S	Social and Ethical Marketing	Designing socially responsible marketing strategies.	Ching’s Hunger ki bajao campaign

Why Study Consumer Behaviour

Study of consumer behaviour intents to read people’s mind! In the past, researchers in the field of human psychology and individual behaviour have attempted to identify typical behavioural trends. These studies substantiate the study of consumer behaviour. While successful companies attribute their success to the understanding of consumer behaviour, newer companies are thriving very hard to get consumer data right. According to Joan Schneider and Julie Hall, most revolutionary products fail in their first year due to the intransigence of consumer shopping habits. Why Most Product Launches Fail

Therefore, it is really important to know your consumer. In the context of marketing studies, understanding of consumer behaviour involves a larger frame. According to Phillip Kotler, “Marketing is about identifying and meeting human and social needs”. The internet revolution and online shopping, has changed the way the consumer decide on buying products and brands. The latest report in Financial Express indicates that the consumer has now more excess to information and at the same time the marketers can also provide plenty of useful information.

With the study of consumer behaviour, marketers’ aims at analysing important factors related to buying behaviour. These factors can be understood as SPECIAL for different segments:

Consumers are SPECIAL
S	Sources of Information and Buying	Consumers have an access to an abundance of information about products and services these days. The choice of dealer (or may be e-tailer), frequency of purchase and quantity per purchase are also important parameters.
P	Perception	Consumers assume a product is good or bad by the manufacturer label. These perceptions are associated with country of origin also.
E	Economic status	Consumers are rational by default. Yet, various economic classes are targeted with different appeals.
C	Consumption Habits	A two-way process of marketing the product as per the consumers’ consumption habits and educating the consumers for new uses.
I	Influences	Consumers get influenced by lot of personal and non-personal factors in the process of deciding for products and services
A	Adaptation	New revolutionary products may be good but many a times the consumer is not willing to adapt to new technology or it may require a huge investment.
L	Levels of Needs and Satisfaction	Consumer willingness to purchase is related to utility aspect and the satisfaction is related to the customer value of the product.

Evolution of Consumer Behaviour

Study of consumer behaviour is evolved from the theory of human behaviour. Anthropology is a field of study deals with human origin and current cultural trends and psychology studies their typical behaviour. Researchers identified that the human behave typically as consumers. They have different needs and hence their outlook towards marketing offers is completely different from one another. They tend to display all the theories of culture, psychology and sociology when deciding for the purchases.

In order to analyse this behaviour, researchers have developed theories related to this buying behaviour, study of which is now known as Consumer behaviour. Consumer Behaviour as a discipline is classified into individual consumer behaviour and organizational consumer behaviour.

Consumer behaviour study is interdisciplinary in nature. Think about your last purchase! On one hand, your own thinking process made you evaluate the alternatives; at the same time you might have discussed with others and also you would have thought about your pocket !

Hence consumer behaviour involves the knowledge of human studies such as, psychology and anthropology, social studies such as sociology and social psychology and environment such as economics. 

Consumer Behaviour and Marketing Management

Study of consumer behaviour provides an excellent base for segmentation, which is an important aspect of marketing strategy. Marketers aim at researching needs of the consumer to build product or service around it. When they realise that there are variety of needs and not one product can satisfy that, they think of segmenting the market and target them accordingly. Study of consumer behaviour also helps them identify the right strategy to position their product. They communicate their offerings to the right market through a right channel carrying the right message.

Like consumers, consumer behaviour is ever evolving field of study. With the advent of internet and mobile technology, the consumer behaviour studies have also gone to a new paradigm shift. For marketers, it is now very easy to be in touch with the consumers to understand their needs and wants. Consumers, on the other hand, are getting product and services from all around the world and became a lot demanding and powerful.

A Forbes study gives following prediction for 2015. Meet your consumer in 2015