Consumer Behaviour & Retail Operations

Consumer Behaviour And Retail Operations
B.B.A . – 8th Sem.
By
Mr. Navin Raj Saroj
M.B.A. (Marketing)
Retail Marketing Management

 The Term consumer behaviour is
defined as the behaviour that
consumers display in searching
of, purchasing, using, evaluating
and disposing of products and
services that they expect will
satisfy their needs.
 Consumer Behaviour focuses on
how individuals make decisions
to spend their available resources
(time, money, offers) on
consumptions – related items.
That includes w/h questions
about buying patterns.

Why Need to Study Consumer Behaviour ?
 Because no longer we take the
customer/consumer for granted,
 Many variables will influence the way
consumption patterns differ. There will change
based upon the different types of retailers in
the market place and the way individuals have
learnt to approach purchase opportunities.

Needs, Wants and Demand Functions For the
Purchase Process
Motivation Characteristics
Needs Basic human requirements. That pre-exit with
consumer i.e. need air, food, water, clothing,
and shelter to survive.
Wants Needs becomes wants when they are directed
to specific objects that might satisfy the needs.
i.e. consumer needs food but may want a
hamburger.
Demands Demands are wants for specific products
backed by an ability to pay.

Purchase Process
The purchase process has been influenced by
marketers to ensure that products and brands
are chosen to create a social comparison
between the purchaser and others.
Retail Service
Merchandise /
Visibility Offer
Other Stimuli
(Marketing / Friends
etc)
Person or Group making
purchase decision (Buyer
characteristics and
evaluation criteria)
Product purchased or
not purchased (buying
roles as to product
choice, brand choice,
timing of purchase, cost
alternative sough

Time taken to Shop:- There are differences in
the type of shopping behaviour embarked upon.
i.e. sometimes a shopping trip is merely a
functional or complex activity whereas at other
times it will be a leisure activity.
Model of Time related shopping expeditions:
Functional (Time Efficient) Complex (Time Required) Leisure (Time rich
activity)
Focused Predetermined ……Pre-planned/researched…….Emphasis on browsing
Routine habitual action higher risk and serendipity

Retail fashion buying process; Snyder and Fromkin (1980):
Humans strive towards individuality (uniqueness) and conformity in
appearance
There are three theoretical approaches that may explain the way by which
adoption processes for fashion occur in retailing:
1. Trickle- down theory: New and innovative fashions and styles originate
for the Higher Classes and passed down through middle classes,
2. Trickle –up theory: A process of fashion and style creation by lower
socio-economic groups which is followed by the upper classes prior to
being adopted by the middle classes.
3. Trickle –across theory: Fashion and style can originate in any one of the
social classes. Opinion leaders of any group can take up the fashion
development then that fashion and style is more likely to be adopted.

Retail Buying Roles
• Choices over purchase are subject to a vast
number of forces acting collectively.
Buyer Role Characteristics
Initiator First individual who suggest product/service should be
evaluated/purchased,
Influencer Provides views and advice which are valued by others and
can subsequently influence the final decision,
Decider The individual who will take the decision in the buying
process as to w/h to buy (Store choice) etc.
Buyer The individual who actually makes the purchase
User The individual who consumes or uses the service/product

Kelly and Stephen (1967) identified Eight
dimensions in Retail store choice:
1. General Store Characteristics (reputation, number of
stores),
2. Physical characteristics of the store (decor,
cleanliness, checkout services),
3. Convenience of reaching the store,
4. Products offered (variety, dependability, quality),
5. Price charged by the store (value, special sales),
6. Store personal (courteous, friendly, helpful),
7. Advertising by the store (informative, believable,
appealing) and
8. Friends perception of the store (well known, liked,
recommended).

COMPARISON OF BEHAVIOURIST AND
COGNITIVIST APPROACHES
Behaviourist (One who study
behaviour of human):-
 Observed behaviour is all
important,
 Behaviour is predictable,
 People are information
transmitters,
 People are all alike,
 Behaviour is rational,
 Human characteristics can be
studied independently,
 Emphasis is on what a person is
and does,
 Behaviour can be understood.
Cognitivist (the part of mental
functions that deals with logic as
opposed to affective which deals
with emotions) :-
 What goes on in a person’s mind
is the key to comprehension,
 Behaviour is not predictable,
 People are information
generators,
 Each person is unique,
 Behaviour is irrational,
 People must be studied as a
whole,
 Emphasis is on what person can
be,
 Behaviour can never be
completely understood.

Consumer Decision Making Process

The Engel – Kollat – Blackwell
(EKB) Model: Perception and
Learning based
 Problem
Recognition/arousal,
 Internal search – Alternative
Evaluation,
 External Search –
Alternative Evaluation,
 Choice /Purchase,
 Outcomes as dissonance or
satisfaction
Leon G shiffman & Lasile L
Kanuk:
• Need Recognition,
• Pre-purchase search,
• Evaluation of Alternatives
• Purchase:
Trail
Repeat Purchase
• Post Purchase Evaluation,
• Experience
Decision Making Process

• The environmental factors such as cultural norms
and values, motives etc. which influence these
stages are important. The model incorporates
influence which moves from the general to the
specific, which is from the macro level (reference
group, social class, norms) to the micro level (belief,
intention, attitude).

Seth’s Family Model of Behaviour for Decision
Making
Mass Media
Word of
Mouth
Display
Sources of Information
Overt Search
Sensitivity Of
Information
Perceptual
Bias Evaluative
Beliefs
Buying
motives
Pre
disposition of
Father
Pre
disposition of
Mother
Pre
disposition of
Other
members
Members
Family Buying
Decisions
Joint Decision
Autonomous
Decision
Family
Household
Unit

Retail Buying Process : Eight - Stage Model
1. Need Arousal
2. Recognition of the Need
3. Level of Involvement
4. Search of Information and
Identification of Alternatives
5. Evaluation of Alternatives
6. Decision
7. Purchase Action
8. Post Purchase feeling /
Behaviour

Kind of Risk at Retail Products :
 Economic Risk : i.e. Value of Product, Financial risk
 Physical Risk: i.e. Fear through products (electrical,
Medicines)
 Psychological Risk: i.e. Product image which reflects
personality
 Performance Risk: i.e. Desired Expectations from Retail
products

Influences on the Consumption Process
 Energizers of Demand: Forces of motivation that lead a
potential consumer to decide upon a shopping visit or to
seek out a product.
 Filterers of Demand: Factors which affects for buying i.e.
Economic factors (social class and disposable income),
sociological factors (reference group) and psychological
factors (perception of risk, personality, attitudes).
 Effecters: an effecter could be the position, display and type
of merchandise which creates an impulse purchase.
 Roles: (family influence, cultural influence)

Energizers or motivational forces (Tauber, 1972:
utilize six categories of personal behaviour)
1. Role Playing: Shopping may be learned and expected
behaviour pattern,
2. Diversion: shopping may provide an escape from the
daily routine,
3. Self-gratification: Helps to afford pleasure, satisfaction,
enjoyment, delight etc.
4. Learning about new trends: i.e. fashion
5. Physical Activity: i.e. Physical exercise
6. Sensory stimulation: i.e. light, color, sounds, scents etc.

Social Motives behind Shopping
1. Social Experience Outside the Home:
2. Communication with others having a similar interest:
3. Peer group attraction:
4. Status and authority:
5. Pleasure of Bargaining:
Patronage of Retail Outlet:
 Convenience,
 Reputation,
 retail Environment Characteristics,
 Service encounter expectations,
 Expectations of the merchandise,
 Expectations of Value.

The Motivation Process
• Motivation refers to the process that leads people
to behave as they do
• It occurs when a need is aroused
• The ad shows desired state and suggests a solution
(purchase of equipment)

Market Segmentation
Geographic Region, City, Rural and Semi urban areas
Demographic Age, Family size, Gender, Income,
Occupation, Education
Psychographic Socio Economic Classification (SEC),
Lifestyle, Personality
Behavioral Occasions, Benefits, User status, Usage rate,
Loyalty status, Readiness stage, Attitude
toward product

SOCIO – ECONOMIC CATEGORIES
A. Upper middle class : higher managerial/administrative or
professional e.g. doctor, director
B. Middle Class : Intermediate manager / administrative or
professional
C1. Lower Middle Class : Supervisory / clerical / junior
managerial / administrative
C2. Skilled working Class: Skilled Manual worker
D. Working Class: Semi skilled or unskilled worker
E. Lowest level of subsistence: Pensioners, casual worker,
widows and others

Role and Family Influence
As the fundamental social unit of
group formation in society, the
influence on retail demand is
extremely important.
The concept of family life cycle
(FLC) helps to understand how
situation specific life stage
condition exert a great influence
on buying behaviour. The FLC is
not just a progression by phase or
age but represents likely
fluctuations in disposable income
and changes in social
responsibilities.

Wells and Gubar (1966) conceptualized the Life
Cycle of Families in USA
1. Bachelor Stage,
2. Newly married couples,
3. The Full Nest - 1,
4. The Full Nest – 2,
5. The Full Nest – 3,
6. The Empty Nest – 1,
7. The Empty Nest -2,
8. The Solitary survivor – 1,
9. The Solitary survivor – 2,

The role of children in the consumer
behaviour process
The child eventually becomes
a dominant force in certain
purchasing decision.
Companies target children at
an early age so as to build
brand loyalty. i.e. Teeth
related product, their TV Ad,
Noodles, Biscuits Ad etc.

Social Influence / Reference Group
The family may introduce political ideas and consumer
attitude to purchasing to the children. However, the
reference group of the individual is just as important.
Purchases take place on the basis of thinking about the way
purchase may help provide status within the group, how
the purchaser may need to consider other members and
what messages the purchase communicates to those from
whom and individual wants recognition and acceptance.

Types of Reference Group
1. Primary Reference Group: i.e. family, close friends, co-
workers,
2. Secondary Reference Group: i.e. Formal contact but
less continuous – Club members
3. Aspirational Group: i.e. Influence with personality and
consider a member,
4. Dissassociative Group: i.e. individual does not want to
be associated.

Consumer Behaviour & Retail Operations

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