MBA Introduction to Consumer Behaviour and Consumer Decision Short Model Paper
Introduction to Consumer Behaviour and Consumer Decision Short Model Paper:- Introduction to Consumer Behaviour and Consumer Decision-making Introduction to consumot behaviour Applications of consumer behaviour knowledge in marketing Consumers and Customer Consumer Behaviour in the Contemporary Environment introduction Problem recognition Information teach Evaluation of almolive Post-purchase behaviour oibution theory and fusion of innovation
SHORT ANSWER QUESTIONS
Q.1. What do you mean by consumer? Discuss various types of consumers.
Ans. Meaning of Consumer: Consumer may be anyone who is engaged in evaluating, acquiring using or disposing off goods and services. The term is somewhat different from consumer. The term is used with reference to a particular shop or firm. Traditionally, a consumer is used in terms of the economic goods and services but later studies also include free services and philosophies in the definition of consumer.
Types of Consumer
There are two types of consumers!
- Personal Consumers: Personal consumers are individuals who make purchases either for or for the use of family members or some other persons. Purchasing of shaving cream or lipsticks for or her own use or of shirts for the use of one of the members of family or something else for the pure of making a gift by an individual are examples of personal consumers
- Institutional Organisational Consumers: Institutional consumers are those organisations institutions which purchase goods as raw materials for manufacturing equipments and other product for maintaining themselves. This category encompasses business organisation, government agencies (local, state or national) and institutions like schools, colleges, churches, hospitals and politie organisations. All of these purchase goods and services in order to run organisation whether for profis or not. Both personal consumer and organisational consumer have their own importance.
0.2. Consumer and customer are two different terms. Do you agree? Differentiate between the two.
Ans. Yes, consumer and customer are two different terms. The term customer is used to refer to someone who purchases goods and services from a particular store or company. Thus, a customer is defined in terms of a specific firm while consumer is not
On the other hand, consumer may be anyone who is engaged in evaluating acquiring, using or disposing off goods and services.
Difference between Consumer and Customer Basis of Consumer
Customer difference Definition Consumer is the person he or she who Customer is the person who uses the
uses the product for his or her personal product for the selling purpose to other.
consumption Reproduction Reproduction never be present there. Reproduction is always present Nature
Consumer is one who consumes/uses the Customer is one who purchases the products or services
product or services. Example For example, a consumer is the patron ot For example, a customer is the purchasing
a grocery store. The patron purchases department of an organisation. Each groceries from the store so as to eat the department of the organisation places an food. The grocery store bought those food order for goods or services which it needs, items from farmers, manufacturers and such as paper for the administrative other vendors, so that it could sell these department. The purchasing department items to consumers. The grocery store is finds a manufacturer that sells the product the customer of the farmers, and the and orders the product. It is the customer patrons are the consumers of the grocery but the administrative department here is store
0.3. What are the role of different persons involved in purchase decision?
Ans. Persons in Purchase Decision: The following persons are involved in purchase decision:
- Initiator: It is an individual who feels somewhat and authorise a purchase to rectify the situation, e.g. a child may ask his mother or purchase some toys for him and in this way, the child is an initiator
- Influencer: It is a person who by some intentional or unintentional word or action influences the purchase decision, the actual purchase and use of product or services, e.g. one of the friends say that he uses to brush his teeth with Close Up toothpaste and it is proved to be anti-cavity and good for
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freshness. such a situation, he will be an influencer in making purchase decision toothpaste.
- Buyer is an individual who actually maltes the purchase transaction whether for his ow
than whether for his own use or for the use of someone else in the family. A mother may buy the toys for the use of her children. In case, the mother is a buyer.
- User: It is an individual who actually uses the product whether purchase
hvidual who actually uses the product whether purchase is made by himself on someone else. If an individi
an individual purchases a record player on the request of his wife who are actual user and he is one of them, then he is also a buyer.
Q.4. Define consumer behaviour. Why do we study consumer behaviour?
Ans. Consumer Behaviour: Consumer behaviour refers to how a consumer behaves or acts of reacts in making a purchase of goods and services of his choice in a given situation. Thus,
- The consumer behaviour reflects the behaviour of individuals and organisations in making purchase decision.
- It involves not only how and why consumers make buying decision but also focuses on the use of the goods and services.
- It also notices how.consumers dispose off their once new purchases. Do they store it, throw give it away, sell it, rent it or lend it
- Consumer behaviour involves the whole buying decision process.
- Consumer behaviour is a subset of human behaviour.
Importance of Studying Consumer Behaviour
Consumer behaviour is studied for the following reasons:
- To Consumer: We all are consumers and spend most of our time in purchasing. We take interest in advertisements of consumer related items, talking about things we need to purchase. We need in sight into our own consumption related decisions.
- To Student and Scientists: As students and scientists of human behaviour, we should understand the various internal and external motives which impel us to purchase, because consumer behaviour is nothing but a subset of human behaviour.
- As Marketeers or Producers: The study is important to marketeers. He must know why and how individuals make consumption decisions so as to make a competitive strategy
A marketeer studies consumer behaviour at two levels–macro level and micro level. At macro level, he studies the collective behaviour of consumers at national level.e.g. what is to be produced, for whom to be produced, what resources to be used to produce. At micro level, he studies consumer behaviour at individual firm or industry level such as decision by advertising or production managers for different activities related to firm.
Q.5. What are the reasons responsible for developing the field of consumer behaviour?
Ans. Reasons to Develop Consumer Behaviour: Recently, the consumer behaviour has developed as a separate marketing discipline. There are a number of reasons for this development. Some of them are as follows:
- Diversified Preference of Buyers: As we know that the actions or reactions of the consumer were always not the same as suggested by different economic theories. The size of the consumer market in this country was vast and constantly expanding. Also, consumer preferences were changing and becoming highly diversified
- Special Needs, Lifestyles and Personality of the Buyer: Research in buying behaviour of consumer revealed that despite overriding similarities all consumers were not alike. Many consumers preferred differentiated products not used by common consumers. This will reflect their own special needs, personalities and lifestyles.
3.Technological Development: The technological development in the country resulted in introduction of a number of new products. Most of them proved successful because of the information about the consumer behaviour. A few who succeeded were those whose product an to consumer needs, their wishes or preferences
4.Shorter Product Life Cycle: Fast pace of product introduction made the life cycle of N g products shorter because of modification, improvement or replacement in the existing to replace them by the new and substitute product Recause of the shorter life cycle of the ides need constant supply of new product Ideas to satisfy the needs of their target som
- Consumer Protection Management: The growth of consumer protection movement created an urgent need to understand how consumers make their buying decisione in order to identi Sources of consumer confusion and deception, consumer advocates have sought to understand how Consumer perceive and interpret various marketing and promotional information, promotion appeals package levelsete
- Public Policy Concerns: With the growth of public protection movement, the public policy makers at all levels in local state and central became aware of their responsibility to protect the consumer interest and their welfare
0.6. What are the characteristics of consumer behaviour?
Ans. Characteristics of Consumer Behaviour. The various characteristics of consumer behaviour are:
- Systematic Process Consumer behaviour is a systematic process that is related to buying decisions of the customers. The buying process consists of the following steps:
(a) Need Identification to buy the product,
(b) Information search relating to the product,
(c) Listing and evaluating the alternative. Le cost-benefit analysis,
(d) Purchase decision
(e) Post-purchase evaluation by the marketer
- Vital for Marketers: Marketers are required to have a good knowledge of consumer behaviour They need to study the various factors which influence consumer behaviour of their target customers The knowledge of consumer behaviour enables marketers to take appropriate marketing decisions
- Reflects Status: Consumers buying behaviour is not only influenced by status of a consumer, but It also reflects it. The consumers who own luxury cars, watches and other items are considered by others as the persons of higher status.
- Influenced by Various Factors: Consumer behaviour is influenced by various factors. The factors which influenced consumer includes marketing personal, psychological situational, social, cultural factors, etc
- Different for Different Customers: All consumers do not behave in the same manner but different consumers behave differently. This difference in consumer behaviour is because of individual factors such as nature of the consumer’s lifestyle, culture, etc.
- Result in Spread-effect: Consumer behaviour has a spread-effect. The buying behaviour of one person may influence the buying behaviour of another person such as a customer may always prefer to buy premium brands of clothing, watches and other items, etc. which may influence some of his friends. neighbours, colleagues
- Varies Acress Regions. The consumer behaviour vary across various states, regions and countries. For instance, the behaviour of urban consumers is different from that of rural consumers Generally, rural consumers are conservative or traditional in their buying behaviour
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- Under goes a Change The consumer i n derdor a change over a period of time Lepending upon changes in age, education, Income level, etc.
- Improves Standard of Living Consumer hun behaviour may result in higher standard of living. The more a person buys the goods and services, the higher will be the standard of living
- Different for Different Products: Consumer behaviour is different for different product There are some consumers who may buy more quantity of certain items whereas very low/no quantity of some other items.
0.7. Discuss in brief the contribution of Anthropology In consumer behaviour.
Ans. Anthropology: Anthropology is concerned with the interactions between people and the environment, especially their cultural environment. Culture is a major influence on the structure on organisations as well as on the behaviour of people within organisations. Anthropo’ is a Greek word which means ‘man’ and ‘logy’ means ‘Science Aristotle defined anthropology as a science of man’s self understanding. It particularly studies civilisation forms of cultures and their impact on individuals and groups, biological features of man and evolutionary pattern, speech and relationship among language
Anthropology contributes in understanding the cultural effects on organisational behaviour, effects of value systems, norms, sentiments, cohesion and interaction. Socialisation involves spreading of values and missions of organisation among employees. Anthropology influences the employees behaviour through motivation, interaction, goal setting decision-making.coordinating and controlling
Q.8. ‘Attributes vary with consumer and are determined by consumer needs. Elaborate and explain the statement.
Ans. Product-bundle of benefits is expressed through its attributes as desired by its target consumer. These attributes vary with customers and are determined by their needs, eg, the desired attributes for a female lipstick buver are range of shades, packaging, price and the prestige factor. SO, It can be said that attributes vary with consumer and they are determined by consumer needs. For example, car styling, low maintenance, fuel economy, price are the desired attributes.
Information provided by these attributes are as follows:
- Importance of Weights: All attributes are not equally important to different buyers of the similar products.
- Brand Belief: The brand image helps consumers, i.e. believing which brand is more likely to have a particular attribute on the basis of consumer perception and may be at variance with reality
- Utility: Consumers can determine utility and make-up called an ideal brand by combining the performance levels of salient attributes.
0.9. ‘Marketing of any product requires knowledge of consumer behaviour.’ Explain with suitable example.
Ans. It is true that marketing of any product requires knowledge of consumer behaviour. Knowing how consumers behave while searching edge for purchasing and evaluating goods and services and ideas they expect will satisfy their needs, creates strong and effective marketing The ability of strategies. Studying consumers provide clues for improving or consumers to make introducing products and services, setting prices, devising channels, good choices depends on crafting messages and developing other marketing activities.
their capacity to read and Consumer behaviour focuses on how individuals make
understand detailed decisions to spend their available resources like time, money, effort
information on items related to consumption. All this includes what they buy it, why they buy it, where they buy it how often they buy it, how often they use it, how they evaluate it after the purchase, the impact of such evaluations on future purchases and how they dispose off it, etc.
- Discuss the concept of ‘Consumer Behaviour’ and Its Importance in marketing.
Ans, Concept of Consumer Behaviour: The study of consumer behaviour is the study of individuals make decisions to spend their available resources (time, money, effort) on consum related items. It includes the study of what they buy, why they buy it, when they buy, where they bu how often they buy it and how often they use it.
Thus, consumer behaviour refers to the decision process and physical activity individual enga when evaluating, acquiring, using or disposing off goods and services.
Importance of Consumer Behaviour
The field of consumer behaviour holds great interest for others as a consumer, as marketeer anda student of human behaviour.
- Importance of Consumers: As consumers, we benefit from insight into our own consumption related decisions, what we buy, why we buy and the promotional influences that persuade us to buy The study of consumer behaviour enables us to become better, that is, wiser consumer.
- Importance of Marketeers: As marketeers and future marketeers, it is important for us to recognise why and how individuals make their consumption decision so that we can make better strategies, marketing decisions. If marketeers understand consumer behaviour, they are able to predict how consumers are likely to react to various informational and environmental cues and are able to shape their marketing strategies accordingly. Without doubt, marketeers who understand consumer behaviour have great competitive advantage in the market place.
- Importance for Students of Human Behaviour : As students of human behaviour, we are concerned with understanding consumer behaviour, with gaining insight into why individuals act in certain consumption related ways and with learning what internal and external influences impel them to act as they do indeed. The desire for understanding consumption related human behaviour has led to a diversity of theoretical approaches to its study.
- Application to Decision-making : Consumers are often studied because certain decisions are significantly affected by their behaviour or expected action. For this reason consumer behaviour is said to be an applied discipline. Such application can exist at two different levels of analysis. The micro perspective seeks application of this knowledge of problem faced by the individuals, firms or organisations. The societal perspective applies knowledge of consumer to aggregate level problem faced by large group or by society as a whole.
Q.11. Write an explanatory note on attribution theory.
Ans. Attribution Theory: Attribution theory was introduced by Fritz Heider in 1958. The theory discusses how people describe events and experiences in their lives and how they adapt to the results of those actions.
Features: 1. The rationale is to recognise why a situation happened so that future events can be anticipated and controlled.
- The theory proposes that people’s actions are attributable to internal and external factors. 3. 3 3. People state that they are able to explain or attribute the causes of someone’s or their own
behaviour or actions.
Types: The attribution theory is classified into two types:
- Internal Attribution: When a person is motivating for a certain action and questioned about it the person needs to explain the reason for the question or action. In internal attribution, a person always wants to show him as much as positive Internal attributions are driven by motives and emotional attitudes of an individual.
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- External Attribution: A person wants to understand the world through events which happen around him and a person seeks reason for that particular event by using external events.
Strengths: 1. The attribution theory can be used to explain the difference in motivation between high and low doers.
- High achievers will attempt rather than evade responsibilities related to prospering
- High achievers believe that failure is considered to be caused by bad luck and is not their fault
weaknesses. 1. The theory can be used for people to blame others and avoid personal conviction
- Low achievers avoid activities that lean towards success because they tend to doubt their
abilities or skills
- Low achievers presume accomplishments are related to luck or other factors beyond their control not themselves.
Q.12. What do you mean by adopter categories? Explain them.
Ans. Adopter Categories: Adopter categories refer to a classification scheme amongst members of the target segment(s), which illustrates where one consumer stands in relation to another consumer with respect to time, that has lapsed between the introduction of the new product and service and the adoption by a consumer (s).
When citing the diffusion of innovation, economists place consumers into five different adopter categories, as follows:
- Innovators (2.5%): Innovators are the first individuals to adopt an innovation. Innovators are willing to take risks, youngest in age, have the highest social class, have great financial lucidity, very social and have closest contact to scientific sources and interaction with other innovators. Risk tolerance has then adopting technologies which may ultimately fail, Financial resources help absorb these failures.
- Early Adopters (13.5%): This is the second fastest category of individuals who adopt an innovation. These individuals have the highest degree of opinion leadership among the other adopter categories. Early adopters are typically younger in age, have a higher social status, have more financial lucidity, advanced education and are more socially forward than late adopters. More discrete in adoption choices than innovators. Realising judicious choice of adoption will help them maintain central communication position.
- Early Majority (34%): Individuals in this category adopt an innovation after a varying degree of time. This time of adoption is significantly longer than the innovators and early adopters. Early majority tend to be slower in the adoption process, have above average social status, contact with early adopters and seldom hold positions of opinion leadership in a system
- Late Majority (34%): Individuals in this category will adopt an innovation after the average member of the society. These individuals approach an innovation with a high degree of skepticism and after the majority of society has adopted the innovation. Late majority are typically skeptical about an innovation, have below average social status, very little financial lucidity, in contact with others in late majority and early majority, very little opinion leadership.
- Laggards (16%): Individuals in this category are the last to adopt an innovation. Unlike some of the previous categories, individuals in this category show little to no opinion leadership. These Individuals typically have an aversion to change-agents and tend to be advanced in age. Laggards typically tend to be focused on traditions, likely to have lowest social status, lowest financial fluidity, be oldest of all other adopters, in contact with only family and close friends, very little to no opinion leadership.