Module 1. Introduction to Consumer Behaviour: Meaning, definition, and need for Consumer Behaviour, consumer and customer, Buyers and users, Industrial buyers v/s organization buyers and consumer (features only),
1. Meaning of Consumer Behaviour
Consumer Behaviour is the study of how individuals, groups, or organizations select, purchase, use, and dispose of products, services, ideas, or experiences to satisfy their needs and wants.It examines the decision-making process before, during, and after purchasing a product or service.
Simple Meaning
Consumer Behaviour refers to the actions and decisions of consumers while purchasing, using, and evaluating goods and services.
Example: A student wants to buy a laptop. Before purchasing, the student compares different brands, checks online reviews, asks friends for suggestions, compares prices, and finally purchases the laptop. This entire process is Consumer Behaviour.
2. Definitions of Consumer Behaviour
Definition 1
According to Leon G. Schiffman and Joseph Wisenblit, "Consumer behaviour is the behaviour that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs."
Definition 2
According to Engel, Blackwell and Miniard, "Consumer behaviour refers to the activities people undertake when obtaining, consuming, and disposing of products and services."
Definition 3
According to Solomon, "Consumer behaviour is the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires."
3. Need (Importance) of Studying Consumer Behaviour
Understanding consumer behaviour helps businesses satisfy customers better and remain competitive.
1. Understand Consumer Needs
Businesses can identify what customers actually need and expect.
Example: Many consumers today prefer healthy snacks. Companies introduce low-fat and organic food products.
2. Helps in Product Development
Companies design products according to customer preferences.
Example: Mobile companies introduce better cameras because customers prefer taking high-quality photographs.
3. Better Marketing Strategies
Consumer behaviour helps businesses decide
* Product
* Price
* Place
* Promotion
These are known as the Marketing Mix (4Ps).
4. Customer Satisfaction
Satisfied customers are more likely to purchase again and recommend the product to others.
5. Competitive Advantage
Understanding customers better than competitors gives firms a competitive edge.
6. Market Segmentation
Businesses divide customers into different groups based on
* Age
* Income
* Gender
* Lifestyle
* Occupation
This helps in better targeting.
7. Predict Consumer Trends
Consumer behaviour helps companies predict future buying patterns.
Example: Growing demand for electric vehicles encouraged companies like Tata Motors and MG to launch more EV models.
8. Increase Sales and Profit
When products match customer expectations, sales and profits increase.
4. Consumer and Customer
Many people use these words interchangeably, but they are different.
Consumer
A consumer is the person who actually uses or consumes the product or service.
Example
A mother buys chocolates for her child.
* Mother = Customer
* Child = Consumer
Customer
A customer is the person who purchases the product or service.
The customer may or may not use the product.
Example
A father buys a bicycle for his daughter.
* Father = Customer
* Daughter = Consumer
Difference Between Consumer and Customer
| Basis | Consumer | Customer |
|---|---|---|
| Meaning | Person who uses the product | Person who purchases the product |
| Payment | May not pay | Pays for the product |
| Ownership | Uses the product | Purchases the product |
| Example | Child eating biscuits | Parent buying biscuits |
5. Buyers and Users
Buyer
A buyer is the person who makes the purchase decision and pays for the product.
Example
A college purchases computers from Dell.
The purchase manager is the buyer.
User
A user is the person who actually uses the product.
Example
Students use the computers purchased by the college.
Students are the users.
Difference Between Buyer and User
| Buyer | User |
|---|---|
| Purchases the product | Uses the product |
| Makes payment | May not make payment |
| Makes purchase decision | Consumes or utilizes the product |
| May or may not use the product | May not purchase the product |
6. Industrial Buyers vs Organizational Buyers vs Consumers
| Feature | Industrial Buyers | Organizational Buyers | Consumers |
|---|---|---|---|
| Purpose | Purchase for production | Purchase for organizational use | Purchase for personal use |
| Quantity | Large quantity | Medium to large quantity | Small quantity |
| Buying Decision | Technical and professional | Formal and systematic | Personal and emotional |
| Frequency | Regular purchases | Periodic purchases | Depends on individual needs |
| Number of Buyers | Few | Limited | Large number |
| Relationship with Seller | Long-term | Long-term | Short-term or occasional |
| Negotiation | High | Moderate | Low |
| Demand | Derived demand | Organizational demand | Direct demand |
| Price Sensitivity | High | Moderate | Varies |
| Example | Tata Steel buying machinery | St Joseph's College buying computers | Student buying a laptop |
Key Terms to Remember
* Consumer – Person who uses the product.
* Customer – Person who purchases the product.
* Buyer – Person who buys the product.
* User – Person who uses the product.
* Consumer Behaviour – Study of buying, using, and disposing of products and services.
* Industrial Buyer – Buys goods for production or manufacturing.
* Organizational Buyer – Buys goods for institutional or organizational use.
* Consumer Market – Market where products are purchased for personal consumption.
Classroom Examples
1. A mother buys milk for her family.
* Customer: Mother
* Consumers: Family members
2. St Joseph's College purchases projectors.
* Buyer: College Administration
* Users: Teachers and Students
3. Tata Motors buys steel from Tata Steel.
* Industrial Buyer
4. A hospital purchases MRI equipment.
* Organizational Buyer
5. A student purchases a notebook for personal study.
* Consumer Purchase
Quick Revision
* Consumer Behaviour studies how, why, when, what, where, and how often consumers buy products and services.
* A consumer uses the product, while a customer buys it.
* A buyer purchases the product, while a user actually uses it.
* Industrial buyers purchase goods for production.
* Organizational buyers purchase goods for institutional or business use.
* Consumers purchase goods for personal or household consumption.
Short Review Questions
1. Define Consumer Behaviour.
2. Explain the need for studying Consumer Behaviour.
3. Distinguish between a consumer and a customer.
4. Differentiate between a buyer and a user.
5. Compare industrial buyers, organizational buyers, and consumers based on their features.
6. Give two real-life examples where the customer and consumer are different.
7. Why is understanding consumer behaviour important for marketers?
8. What is derived demand in the context of industrial buyers?
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