Banking Marketing Aptitude Consumer Behaviour Consumer Behavior

Consumer Behavior

Category : Banking


Consumer Behavior


According to Walter and Paul: Consumer behavior is the process whereby individuals decide whether, what, when, where, how and from whom to purchase goods and services".


According to Kurtz and Boone: Consume behavior consists of the acts of individuals in obtaining and using goods and services, including the decision processes that precede and determine these acts. It is the decision making process and physical activity that individuals engage in while evaluating, acquiring and using goods and services. It is the study of how individuals make decision to spend their available resources on consumption related items. It is an attempt to understand and predict human behavior in the buying role. As a discipline or as a field of study it is comparatively new and also multidisciplinary in nature. It has drawn heavily from different disciplines like Economics Psychology, Sociology etc. Different goods and services have varying magnitudes of search, experience and credence (SEC) qualities. The search qualities of a good or a service can be estimated before the purchase, while the experience qualities can be evaluated only after purchase and consumption Paraguayan, Zenithal and Berry in their article "A Conceptual Model of Service Quality and its Implications for Future Research", outlined ten dimensions of service quality and categorized them under the search, experience and credence qualities as shown on.


Dimensions of SEC qualities


Search qualities

Experience qualities

Credence qualities









Understanding the customer






Consumer Decision Making Process: The buying process by a consumer is triggered by his specific needs. The consumer's decision making process basically involves the following steps. For both goods and services, these steps remain the same. Though the order of the steps may differ

1. Need Perception

2. Search for information

3. Evaluation of Alternatives

4. Purchase and Consumption

5. Post Purchase Evaluation


(i) Need perception: Consumer may feel the need to purchase a product or service when there is a difference between the actual state and desired state. For example- a consumer who is hungry feels the need to buy lunch and satisfy his hunger. Further, a particular need may arise due to consumer's perception or due to marketer activities. For example an individual who never thought of buying a car may perceive the need to buy one, when he sees his colleague or neighbor buy a car. The best example is the Marti advertisement, which says that the monthly EMI on a car location from the company is "only Rs. 2599", which gives the customer, a feeling that it is quite affordable.


(ii) Search for Information:  Once a need is felt, a customer decides to purchase a product/service to fulfil his need. In order to make the right product service choice, a customer needs to search for information regarding the product/service that would fulfil his need. Search of information may be called pre-purchase search or on-going search. Pre-purchase search is the typical form of such behavior that is associated "with consumers. Thus if a consumer has recognized a problem and searches for information with an intention to buy the product it is called a pre-purchase search.

   Information can be collected either from internal sources or from external sources. Internal sources include information retrieved by the customer from his memory, pertaining to his previous experiences of buying the product/ service. External sources include personal and non-personal sources. In the case of services, customers opt for external sources of information only if an internal source of information is not available or is not sufficient for him to take a decision. The external (personal and non-personal) sources of information include


Personal sources: Friends, family, neighbors, etc.

Commercial sources: Dealers, salespeople, point of sale displays retailers, advertising, etc.

Experiential: Product-trial, observing, handling, examining, etc.


(iii) Evaluation of alternatives: Search process leads to a set of alternative that consumers evaluate in the next stage of the buying process. Customer use a set of alternatives to compare and evaluate the services offered by various goods/service providers. A consumer compares between different brands based on certain parameters or attributes like reliability, durability safety cost of maintenance etc. The marketers should try to identify the parameters that are taken into consideration by a Consumer


(iv) Purchase and Consumption: This stage involves deciding the purchase timing, store selection, mode of purchase, etc. A purchase may be performed or cancelled due to the following reasons Information about a new bran Changed priorities of the consumer Unexpected financial setbacks. Non-availability of chosen brand for example: If a customer tries the complementary holiday package offered by Club Mahindra and decides to join them, it is termed repeat purchases. Another example After experiencing the hospitality offered by a club for a trial period, a customer might decide to enter into a long term service contract with the club and take a 10 year or 15 year membership with the club. Lifestyle clubs like Country Club offer long term membership of 5, 10, or 15 year?s duration to customers.


(v) Post Purchase Evaluation: After purchasing and using a product or service, the customer evaluates it by comparing its performance with his expectation. A customer is satisfied when the product or service meets or exceeds his expectations


Buying Roles:

(a) Initiators: An initiator is the person who first suggests the idea of buying something.                                                 

(b) Influencer: an innocence is the person whose views affect the purchase decision and choice of brands.

(c) Deciders: A deciders is the person who decides. When, How, from whom to buy

(d) Buyer: A buyer is the person who makes each payment i.e. actually purchases the product.

(e) User: A user is the person who uses or consumes the product.


External Factors Influencing Consumer Behavior Many factors have an impact on consumer behavior. Some of these factors are described below


(i) Culture: Culture consists of the values, norms, roles and customs shared by members of a society. It differs from place to place. The culture of a place plays a vital role in determining the values and attitudes of the people of that place, and in turn their purchase behavior. For example? firm providing dating services' might do well in American culture, but might not win too many hearts in the Indian market.


(ii) Subculture: Subcultures are smaller sections in a society with similar norms, values, and behavior patterns, which make them distinct from the main culture. Age, lifestyle, geography, ethnicity, race, and religion may form the basis for subcultures.


(iii) Social Class: People having similar lifestyles, interests, values, behaviors, and norms are grouped under a social class.


(iv) Reference Groups: An individual uses the perspectives of a reference group as the basis for his actions, judgment and opinion. For example? Sahara group in India uses the Indian Cricket team in its advertisements.


(v) Family: Purchases are often not made by individuals alone, but a whole lot of other people too have a say in the purchase decision. Marketers need to recognize the role played by these various individuals in the purchase decision, in order to target their marketing message at them.






You need to login to perform this action.
You will be redirected in 3 sec spinner