Consumer Behaviour: Definition, Factors, Importance and Models

The term consumer is used to describe two different types of behaviour. The “personal consumer” and the “organizational consumer.”

According to James F. Engel“, “Consumer behaviour refers to the action and decision process of people who purchase goods and services for personal consumption.”

Consumer behaviour is a key element for any market. In one way it helps in identifying the requirements and needs of the consumer in changing times. The growing complexity due to changing lifestyle has added importance to the subject even more.

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In today’s world, consumers’ tastes are also characterized by frequent changes. To survive in the market, a firm has to be constantly innovating and understand the latest consumer trends and tastes. Consumer behaviour provides invaluable clues and guidelines to marketers on the new technological frontiers which they should explore.

For example, the advent of colour television in India. When we switched over from black and white transmission to colour transmission in the early eighties, the consumers exhibited a desire to purchase colour TV for closer-to-life picture viewing and now consumers have moved on to purchase LCD.

What is Consumer Behaviour

Everybody in this world is a consumer. Each one of us is buying consumer goods and services in our lives. Consumer behaviour is very complex and is determined by social and psychological factors and it is necessary for a marketing manager to understand properly before he plans the marketing strategy. All the customers have different tastes, likes, and dislikes adopt different behaviour patterns, while making purchase decisions.

“Behavior is a mirror in which everyone shows his or her image.” “Consumer behaviour relates to micro behaviour i.e., individual person.”

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“The behaviour of the consumer at the time of purchase is known as consumer behaviour.”

The term consumer is used to describe two different types of behaviour. The “personal consumer” and the “organizational consumer.” The personal consumer purchases goods & other articles for his or her own use e.g., television set, refrigerator, perfumes, shoes etc., as compared to the organizational consumer are institutions or business houses or govt., agencies who purchase the products or provide services to run their organizations. Example – Educational institutions like schools, colleges etc., financial institutions like banks, charitable hospitals etc.

Thus, consumer behaviour is a process through which a consumer purchases goods or services for the satisfaction of his or her need.

Consumer Behaviour Definition

According to “Roger D. Blackwell”, “Consumer behaviour refers to the action and decision processes of people who purchase goods and services for personal consumption.”

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According to James F. Engel”, “Consumer behaviour refers to the action and decision process of people who purchase goods and services for personal consumption.”

Thus, above definitions lead us to conclude that individuals who purchase goods for their final use are known as consumers. Secondly, consumer behaviour-is affected by a number of factors like social, economic, psychological status etc.

Reasons for Understanding Consumer Behaviour

Understanding consumer behaviour is a key element for any market. In one way it helps in identifying the requirements and needs of the consumer in changing times. The growing complexity due to changing lifestyle has added importance to the subject even more.

Understanding consumer behaviour is necessary due to several reasons:
(i) Knowledge of consumer behaviour would serve as the guide in planning and implementing marketing strategies. Consumers’ reactions to a firm’s marketing strategies have a great impact on the firm’s success.

(ii) Marketing mix can satisfy consumers only when it is based on knowledge about their behaviour. Implementation of the marketing concept is not possible without such knowledge.

(iii) By understanding the factors that influence the behaviour of consumers, marketers are in a better position to predict how consumers will react to their efforts.

(iv) Study of consumer behaviour helps in market segmentation and product differentiation. It is also helpful in the evaluation of marketing programmes.

(v) Consumer is the principal or a priori of business. The efficiency with which the free enterprise system operates depends upon how well business understands consumers. A business community that is ignorant of consumer preferences cannot fulfill its obligations in a meaningful and responsible manner.

(vi) The needs and preferences of consumers are changing and becoming highly diversified. Today, consumers prefer differentiated products which reflect their distinctive personalities and lifestyles. Marketers can no longer treat all consumers alike and must understand each and every category of consumers.

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(vii) Study of consumer behaviour is necessary for introducing new products and new technology. A firm which better understands its customers can gain a competitive advantage in the market.

Importance of Consumer Behaviour

Consumer behaviour helps us to understand the purchase behaviour and preferences of different consumers. Consumers differ in terms of sex, age, education, occupation, income, family set-up, religion, nationality and social status. As different background factors have different needs, the consumer buys those products and services which he thinks will satisfy his needs.

In marketing terminology, specific types or groups of consumers buy different products (or variations of the same basic product) represent different market segments. To successfully market to different market segments, the marketing manager needs appropriate marketing strategies which he can design only when he understands the factors which account for these differences in consumer behaviour and tastes.

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For example, the advent of colour television in India. When we switched over from black and white transmission to colour transmission in the early eighties, the consumers exhibited a desire to purchase colour TV for closer-to-life picture viewing and now consumers have moved on to purchase LCD.

Consumer behaviour is a process, and purchase forms one part of this process. There are various environmental factors which influence this process. All these factors and the type of influence which they exert on an individual’s consumption behaviour can be understood and analyzed.

Moreover, some of these factors can be further influenced by specific elements of the marketing strategy, so that the consumer behaviour process results in a definite purchase decision. To the extent that the marketer can understand and manipulate the influencing factors, he can predict the behaviour of consumers.

Though prediction can never be absolutely accurate, it certainly reduces the risk associated with different marketing strategies. Thus, the importance of consumer behaviour lies in the fact that behaviour can be understood and influenced to ensure a positive purchase decision. The marketing manager’s interest lies exactly here, i.e., to ensure that marketing strategy results in purchase of the product.

Consumer Behaviour Models

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The models of consumer behaviour are as follows:

Economic model of Consumer Behaviour
Psychoanalytic model of Consumer Behaviour
Learning model of Consumer Behaviour
Sociological model of Consumer Behaviour
Howard-Sheth model of Consumer Behaviour
Nicosia model of Consumer Behaviour
Webster and Wind model of Consumer Behaviour
Engel-Kollat Blackwell model of Consumer Behaviour

1. Economic Model of Consumer Behaviour:

In economics, the people evaluate all the alternatives in terms of cost and value received. This product and service gives full satisfaction. Consumers follow the principle of maximum utility based on the law of diminishing marginal utility. Consumers will allocate his needs, tastes and experience according to the purchasing of the consumers, also the consumer utilizes his expenditure for different products in order to maximize utility.

Usually the economic model is un-dimensional. Here the buying decisions of a person are concerned with utilization of the resources. The consumers make the purpose in the hope of utilizing his resources at most.

The economic model will be emphasized by buying behaviour.

They are:

(i) Price Effect

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If the price of the product is reasonable, the quantity of the product purchased is more.

(ii) Product Effect

Lesser the price of the substitute product the original product purchased will be less.

(iii) Income Effect

If the purchasing power of the consumer is more and sound, the purchase of the product will be more.

This model emphasizes the behaviour of the consumer about a certain product. According to some of the scientists, the economic model is incomplete. The market is homogeneous according to the economics and the consumers behave according to the income level. Here perception, motivation, learning, attitude and personality are considered very important.

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But on the contrary, it is very important to possess a multi-disciplinary approval to understand consumer behaviour. Apart from all those factors, the consumer is also influenced by product, place, promotion etc. These all factors help the consumers in taking a decision.

2. Psychoanalytic Model of Consumer Behaviour:

This theory is developed by Sigmund Frued. He thought about human needs and sub-conscious levels.

According to Sigmund Frued, personality is the outcome of:

Id
Super ego
Ego.

1. Id:

The id controls the individual’s most basic needs and urges such as hunger, sex and self – preservation. The id is the part of the unconscious mind consisting of a person’s basic inherited instincts, needs and feelings. The id operates on one principle, directing behaviour to achieve pleasure and to avoid pain. It seeks immediate satisfaction ex – A new born baby’s behaviour is governed totally by the id. Hence, in simple terms Id was conceptualized as a centre of primitive and impulsive drives, which seeks immediate satisfaction e.g. – Basic physiological needs such as thrust, hunger etc.

2. Ego:

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Ego is the person’s sense of self-esteem. It is the individuals’ self-concept and is the manifestation of objective reality as it develops in interaction with the external world. It acts as an internal force to control and re-direct the id-impulses and the socio-cultural restraints exercised by the superego. Finally, Ego is the person’s conscious control. It functions as an internal monitor that attempts to balance the impulsive demands of the id and socio-cultural constraints of the superego.

3. Super Ego:

Superego is reflecting social standards that have been learned. Superego does not manage the id but restrains it by punishing UN acceptable behaviour through the certainty of guilt. The superego operates unconsciously and sees that the individual satisfies his needs in a manner which is acceptable to the society. The superego represents the ideal rather than the real. It motivates us to act in a moral way. So, Superego is conceptualized as an individual’s internal expression of society’s moral and ethical codes of conduct. It acts as a restraint for the impulsive forces of the id.

So, the behaviour of a consumer is being influenced by a complex set of deep motives and also by the product, price, place and promotion. Also research has been done in order to understand the consumers’ needs and wants and therefore can develop products which will definitely suit the consumer’s needs.

3. Learning Model of Consumer Behaviour:

Psychologists are very much interested and concerned about the formation and satisfaction of needs and tastes. These psychologists always give attention to one of two aspects, the primary needs and the learned needs. The primary needs are lounger; sex etc., and the learned needs are fear and guilt. The internal stimulus when directed towards a drive becomes a motive. The products and services will act as stimuli in order to satisfy drives.

According to cognitive theorists, the consumers not only learn to link stimulus with responses but also in the formation of other cognitive aspects such as attitudes, values, beliefs, motivation etc. Ultimately, the consumer’s behaviour/responses change according to the needs and wants for a particular product. Consumers can choose from the various alternatives available and therefore can take the right decision in buying the right product which satisfies the needs and wants of the customers.

4. Sociological Model of Consumer Behaviour:

This model reflects individuals as a part of an institution called society. The development of society reflects the development of an individual. The individual can play an important role in the development of the society. Through his contribution, he can be a part of formal and informal organizations and employees of a firm, on any part of an organization which contributes to the development of the society. The interactions of such a member of an organization reflect in the change of the buying behaviour of an individual.

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The individual also gets influenced by the suggestions of family members, friends, colleagues etc. The individual gets maximum influence by the lifestyles and buying behaviour of its peer group. The individual can be ranked to which social class it belongs by the way of income, occupation and place of residence. Here, each class has its own lifestyle and status and therefore the individual can enjoy the benefits according to its class etc.

5. Howard Sheth Model of Consumer Behaviour:

The Howard-Sheth model usually serves two purposes:

a. It reflects how complex the whole question of consumer behaviour really is.

b. It provides the framework for including various concepts like learning, perception and attitudes etc. which play a role in influencing consumer behaviour.

In this theory, the most significant stimulus affecting the buying behaviour is the information cues about the characteristics of the product. These cues can play a very important part when the buyer is involved in shopping activity and therefore referred to as significant. Other cues can be useful for information sources which are depicted through symbols. Both the significant and symbolic cues are very useful tools from a marketing perspective. The product emphasizes quality, price, distinctiveness, service and availability.

The media communication and advertising sources are very important which the firm has no control over. The marketing efforts of the firm are controlled by sales and service personnel. Another source/factor which influences the buying behaviour includes family, friends, colleagues etc. This is a social source of personnel where the company has no control over it.

Perceptual Constructs:

This is a complex state or psychological processes and how the individual deals with the information cues received from various sources. Sometimes the information is not attested properly. Therefore ends up with incomplete outcomes. The individual receives a lot of information but the individual interprets only the information which is useful to him and therefore neglects the unwanted information.

Learning Constructs:

Here, the theory is much more complex and numerous. The buying behaviour of an individual is reflected by the motives. The buyer’s intention is always towards the product’s brand, whether the buyer forms a positive attitude or not. Though the attitude does not change, it can be changed by the factors influencing the product/brand.

The way includes ‘brand comprehension’ i.e. knowledge/ awareness about the brand characteristic features which forms the basis for the buyers. This buying behaviour is characterized by a set of alternatives, choice criteria etc.

6. Nicosia Model of Consumer Behaviour:

This is also called a systems model, because here the human being is a system, where the stimuli is regarded as an input to the system and the human behaviour as an output of the system. This model was developed by Francesco Nicosia in 1966, who was an expert in consumer motivation and behaviour.

Here he tries to explain buying behaviour through a link between the organization and the consumer. The model concentrates on the messages which are coming out from the firm which again is focused on the product or service. Based on the situation, the consumer will have a certain attitude towards the product. The consumer always looks for features in a product.

It emphasizes on four basic areas:

(a) The consumer attributes and the firm’s attributes. The advertising message is aimed to reach the masses. The consumer will react depending on the intensity of the message received.

(b) The search and evaluation results received by the consumer on the advertised product are being compared on the available alternatives. This factor is related to product/service.

(d) The items purchased are emphasized by the utilization of the items.

7. Webster and Wind Model of Consumer Behaviour:

This model is developed by F.E. Webster and Y. Wind. They tried to explain the multifaceted nature of organizational buying behaviour. This model reflects the environmental organizational, interpersonal and individual buying determinants which influence the organizational and group decision making and therefore reflects in the buying process. The determinant of the environment consists of physical and technological factors, economic, political, legal and socio-cultural environmental factors.

These factors are uncontrollable but an understanding of these factors may be very crucial in the success of a decision-making. The organizational determinant is based on Harold Leavitt’s four elements: buying and those are people, technology, structure and task. These all factors can be seen in the process of buying the centre. The buying process takes from both the aspects individual and organizational from the various functional areas. The individual may be involved in one more buying role during organizational buying.

These roles are as follows:

(a) Users

The end and the ultimate users who help in the buying process.

(b) Influences

The influencers may or may not be directly corrected with the decision, but their view point of judgement of a product or a supplier contains a lot of weightage.

(c) Buyers

The people who negotiated the purchase.

(d) Deciders

The people who take the actual decision in buying.

(e) Gate-keeper

The person who regulates the flow of information.

8. Engle- Kollat-Blackwell Model of Consumer Behaviour:

The model reflects consumer behaviour as a decision-making process in the form of five steps which takes place over a period of time.

Besides the core steps, the model also explains other related variables grouped into five categories:

Information input.
Information processing.
Product-brand evaluation.
General motivating influences.
Internationalized environmental influences.

The steps which are involved in the decision making are as follows:

(a) Problem Recognition:

The consumers will be able to locate the difference between the actual and ideal state. This occurs as a result of contact with the external stimuli. The consumer should definitely perceive the difference between the actual and ideal states in order to be activated, recognize a problem and therefore find a way to solve it.

(b) Information Search:

The information available with the consumer will be consistent with the beliefs and attitudes. Here in this stage, the consumers are always on the lookout for more information about the product from the various sources available. The sources could be salespeople, personal or friends or neighbors or mass communication media. The individual gets exposed to the various stimuli which either may or may not catch the attention, which may be again either stored or not stored in the memory. This stage is very selective and therefore the consumer will accept the information which is result oriented.

(c) Alternative Evaluation:

The consumers always evaluate the alternatives available in the market. The methods used for evaluating the products will again depend on goals, motives and personality. The consumer also has certain beliefs about certain brands. So, accordingly the consumers select which will satisfy their needs and wants.

(d) Choice:

The choice will definitely depend on her intention and attitude. The choices made will again depend on normative compliance and anticipated circumstances. Normative compliance relates to the extent to which the consumer is influenced by friends, family members, colleagues etc. Thus these two factors will definitely help in influencing and determining the dependent on the sensitivity of the individual to handle unanticipated circumstances.

(e) Outcome:

The end result will either be positive or negative. If the end result is positive, the outcome will definitely be positive. If there is a doubt about the choice made, the outcome will be positive but the consumer will further go for information search to support his or her choice made.

Factors Affecting Consumer Behaviour

1. Demographic Factors:

Demographic factors are unique to a person. It involves identification of who is responsible for the decision-making or buying and who is the ultimate consumer. All outlets have focused themselves on respective segments based on factors such as age, income, family, size, gender, occupation, etc.

2. Psychological Factors:

Psychological factors refer to the inner aspects of an individual. An understanding of consumer’s psychology guides the retailers’ segmentation strategy. Consumers respond differently towards the same retail marketing due to their respective motives, personality, level of involvement, and attitude.

i. Motives:

Motivation is a prerequisite for any action which includes buying. It stimulates the need for buying.

ii. Perception:

Perception is the process by which consumers attach meaning to incoming stimuli by forming mental pictures of persons, place, and objects. Stimulus reception is accomplished through the five senses, that is, sight, sound, taste, touch, and smell. A consumer feels that what he or she sees, hears, feels, tastes, and smells is what he or she gets.

iii. Learning:

Learning is the process of acquiring knowledge through past experience. When a consumer visits an outlet and the treatment he or she receives will be a decisive criterion for repeat visits to that outlet. If the experience with the sales team was better, then the consumer may visit the outlet even if the goods are slightly expensive.

3. Environmental Factors:

Environmental factors include both physical and social factors. This includes physical objects (goods and outlets), spatial relationship (location of shopping centers and merchandising outlets), and social factors (reference groups and opinion leaders). The environmental factors influence consumers’ attitude, learning motives, etc., which in turn influence affective and cognitive responses and therefore shopping behaviour of the individual concerned.

i. Social Class:

Social class is referred to as the classification of members of society into a scale of distinct status and class. Social class is measured by variables such as education, occupation, wealth, and ownership of assets. Market research has established a link between social class and consumer attitudes concerning shopping behaviour. Upper middle class and higher sections of society prefer outlets for grocery items once a month from a particular outlet.

They usually prefer outlets offering variety and range of choices. They are even concerned about their pets. This section spends a substantial amount of revenue for their pets’ food and well-being. Social status of an individual plays an important role even in determining the frequency of purchase. It has been observed that the majority of the middle class prefers to buy vegetables in the morning for their consumption to ensure freshness and reduce the need for refrigeration.

Sometimes for some people price plays an important role but for others it does not. For example people who prefer to buy fresh vegetables buy it in the morning when prices are high but few people who are price conscious buy the product in the evening when the prices are lower.

ii. Life Style:

Lifestyle is the way of someone’s way of living and it is determined by the interest, opinion and the activities of their way of living. Lifestyle is seen as highly correlated with individuals’ values and personality. A persons’ lifestyle very much belongs to his or her occupation and culture.

Consumer Behaviour in India

Behaviour of a consumer in the Indian subcontinent is changing; however, the main reasons for these changes are good amount of earnings (disposable), lifestyle changes, urbanisation and so on. The spending of consumers and the behaviour of a consumer is projected to improve three times at the end of 2019.

The retail giants in the Indian subcontinent are also moulding their plans and strategies to protect their base of consumers which are loyal and also attracting new customers. The customers of the Indian subcontinent have increasing awareness, as they now cross check the other viable options via the internet.

Consumer behaviour in the Indian context is very complex as the whole economy is going through a transformation. Consumer behaviour in an emerging economy is generally not simple. This complexity is due to the mixture of three classes in different proportions. The lower class is moving to middle class and middle class to upper middle class. In such a situation a retailer should be very much intelligent to grab the opportunities of the Indian retail market.

Customers of the present generation do not believe completely in the promotions or marketers’ words. Today, they are highly informed. Moreover, in the present situation with the help of smartphones, social media spread far and wide with the help of which information of a product moves round and round among buyers as well as prospects.

An adage says – old habits die hard. Retailers have to understand this if they want to be successful in the Indian market, the age old habits of buying from the kirana store and having a nice time with the shopkeeper has been a practice for a long time. In addition the shopkeeper sells on credit basis also and even delivers the goods to the consumers’ place. All this would not go away instantly. The large retail players have to be patient with regard to the loyalty of the consumers.

The organised retailer has to understand that both the practices of the mall and kirana will have to co-exist. Maybe a new methodology has to be devised which would discard the thought process of a zero sum game (zero sum game is a philosophy where one’s loss is another’s gain keeping the sum always constant).

The retailer needs to understand the factors that could affect the lifestyle of the consumer such as psychographics, behavioural, demographical, etc. The Indian social diaspora has been evident that retailing in India was mostly to those family run kirana stores and Haats, Mandis, and Melas were the places where the Indians have been making their purchase and sales for generations.

It has been only recently that this old age tradition has got side-lined through the new retailing methods. The Indian market saw tremendous change in the form of liberalisation, privatisation, and globalisation and the debacle of the license raj system. It led to a more faithful, progressive, and family approach towards business and industrialisation. The market opened up improving the currency conditions and welcoming new international players to the Indian soil.

This led to the beginning of the modern era of retailing in India. India’s social fabric has changed for sure. Indian families have also seen a change, as now there is an emergence of the dinks (double income no kids) generations and high pay masters in the way of multinational corporations. This has led not only to a higher income disposal for Indians but also a hectic lifestyle. All these added with a large population and opportunity led to the rise of modern retailing in the Indian subcontinent.

Factors Influencing Consumer Behaviour in Retail Outlets

Understanding consumer behaviour is very vital for any retail outlets’ survival, and the following are some of the factors which play a vital role in consumer decision-making:

1. Product Range:

The product range available with a retail outlet is the most important criteria for the consumer to shop. The curiosity may attract the consumer to go and visit an outlet but for long term shopping decisions the consumer sees the outlet and the range of products an outlet is offering. The number of products offered has a very significant role for products like electronics; entertainment like avenues devalues, books, etc.

2. Convenient and Quick Shopping:

For any consumer, convenient shopping is a must. Shopping should be very easy. For example medicine should be sold at medical stores because consumers prefer to buy it from the medical store instead of a supermarket.

3. Shopping Time:

The time spent in shopping and the time required to reach a retail outlet are very critical for an outlet’s success. Because the lifestyle of people has been changing quickly in India so people have less time to shop. Therefore, the shopping experience should be less time-consuming and that is how a retailer should plan his or her outlet.

4. Socio-Economic Factors:

These factors are deciding factors of development. Social and economic conditions of a country decide the growth of a country and its citizens. India is a nation having a very fast economic and GDP growth. Businesses are flourishing and foreign investors are investing heavily. So, peoples’ lifestyles are also changing. Their purchasing power is increasing; so, their product demands are also changing. Apart from economic conditions the social status also determines what a consumer is going to buy and consequently the retail market is largely influenced by the prevailing culture.

The culture of Latin America is vertically different from the culture of Asia and so does consumption of products.

In this regard, following are some of the pertinent examples:

Indians love home-made food and fresh ones which is one of the reasons for making it difficult to sell fully prepared items like idli, vada, etc.
The concept of free gifts and items is hugely successful in India.
Products like agarbatti (scented sticks), and slokas (a Hindu prayer book) are sold in the market.

A retailer needs to understand that the need hierarchy is different for each market. It is important for the retailer to consider socio-economic change in a geographic region over a period of time as it is indicative of the facilities available at various levels and the quality of life of the population and this would indirectly be related to the spread of organised retail.

5. Family Life Cycle, their Steps and Stages:

Step of the life cycle of a family to which a consumer belongs also largely influences his or her needs. For example, the needs of a young bachelor will be different from the needs of an elderly retired couple. Therefore the retailers need to be clear about the market that he or she is catering to as he or she cannot be everything to everybody.

There are five steps or stages in a life cycle of a family and they include the following:

Stage I Bachelorhood:

This is a step or stage of life where an adult (single) who lives away from his or her parents. The burden of responsibilities (financial as well as non-financial) is less as his or her income is less. They are at the threshold of beginning a career. Therefore, they have very large disposable earnings. Bachelors try to waste (spend) their earnings in kitchen equipment, furniture as well as rent (house). Bachelors tend to spend on tourism, sports (adventure), clothes, fun, and entertainment and so on.

Stage II Honeymooners:

This is the second stage and generally called honeymooners’ stage. When a couple gets married, then starting from that period to the period of birth of their first child is called honeymooners’ stage. However, there is no limitation on the working nature of spouses as it may happen that one spouse is working or both of them are working. With both the couple working, the earnings rise and when the earnings rise, they have more disposable income in their hands that permits a good lifestyle, and provides for purchases or savings.

They tend to spend on creating a home for themselves. They spend on cars, furniture, curtains and upholstery, electronic appliances, kitchen appliances, and utensils, and also on vacations. They form an attractive segment for the marketer as they provide the basis for the highest purchase rate amongst segments. The highest average purchase of durables takes place in this stage.

Stage III – Parenthood:

At this stage, a married couple has children. This stage generally has a tenure of 20-25 years and can be further divided into three stages, that is, full nest I, full nest II, and full nest III. At every stage, the size and structure of the family keeps changing along with income and expenses. The financial burden of the family increases swiftly after birth of children in full nest I and decreases gradually as children become adults, self-supporting, and independent as one reaches the last stage (full nest III).

Full nest I – The youngest child of the family is less than seven years old.

Full nest II – The youngest child of the family is seven years or above. Generally, this stage includes children between the age of 7 and 12 years.

Full nest III – This stage comprises older married couples with independent and/or dependent children staying together at home. Children attain higher education levels; however, one of them may also be earning sufficient income.

Stage IV – Job Parenthood:

This is the stage when the children leave their home for education, and then for a job. After completing their education and finding a job, they slowly leave their home one after another, thus, leaving the nest eventually. This stage is also divided into two more stages, that is, empty nest I and empty nest II. Similar to the parenthood stage, the size and structure of the family changes as one passes through empty nest stages I and II.

Empty nest I – At this stage, at least one child has left home. He or she must have completed education, done a job and has left his or her home to start his or her own home. He or she is independent and thus can manage on his or her own. When children are managing to stand up on their own, parents may still be working.

Empty nest II – On reaching this stage, all the children would have left their home, and the parents might have retired. They are living on pension and other investments. Occasionally, if health permits, they can take up part-time jobs.

Some Peculiar Indian Traits:

Indians still believe in the joint family concept. Decision is taken by the head of the family which is highly unlikely in the Western world.
Marriage is mostly arranged in nature.
Preference for gold purchase.
Most of the purchases are impulse-based.
Credit plays a pivotal role in deciding purchasing behaviour.

Indian Retail Sector and Changing Consumer Behaviour

As India’s GDP is constantly growing at a higher and constant speed, the middle – class families are growing rapidly and the income of the families are growing as the per capita income has increased. Hence, the people of India are spending more. It has provided the opportunity for the retailers to flourish their business. The demand for modern organised retailing has increased.

There are two types of countries – one in which the economy has been fuelled by the heavy foreign borrowings and the other category of countries in which growth is fuelled by a balance of debts and exports and who are flourishing in growth perspectives. We will see a tremendous amount of change in the upcoming years because now the developing countries are becoming the export houses. Countries like India, China and Brazil are now becoming the export hub and reducing their debts by increasing their foreign reserves.

Organised retailing in these countries is growing at a very faster pace. And as the consumer is more emotionally driven the trust will be the success factor for the companies. In India retailing has seen a major change as the kirana stores are replaced by the superstores and due to the omnipresence of information technology the e-retailing concept is gaining popularity.

In the case of the Indian subcontinent, the main transformation that is observed in the upcoming years is transforming the shape of retail sector of the Indian subcontinent; therefore, in the format (retail), they are getting customised in meeting the wants and needs of consumers of the Indian subcontinent and for liberalising the foreign investment in the retailing area mainly in multi-brand category, as this would significantly procure capital investment in the supply (back end) as well as reduce unemployment by creating employment opportunities, especially rural (employment) as well as units of small scale employment that supplies to big supplier to retailer.

Dimensions of Consumer Behaviour in the Context of Indian Consumer

Consumer behaviour is an interdisciplinary science and relatively emerged as a new field of study in the mid to late 1060s. This new discipline is borrowed heavily from concepts developed in other scientific disciplines such as applied psychology, social psychology, cultural anthropology, economics and econometrics.

Therefore, it is crucial to discuss various dimensions of consumer behaviour in the context of Indian consumer:

1. Consumer Needs and Motivation:

Consumer needs are the basis of all modern marketing. The key to a company’s survival, profitability and growth in a highly competitive environment is its ability to identify and satisfy unfulfilled consumer needs. Marketers do not create needs though in some instances they may make consumers more keenly aware of unfelt needs. Motivation can be described as the deriving force within individuals that impels them to action.

The deriving force is produced by a state of tension that exists as the result of an unfilled need. Motivation is a need-induced tension which exerts a “push” on the individual to engage in behaviour that he expects will gratify needs and thus reduce tension. Individuals strive both consciously and subconsciously to reduce this tension through behaviour that they anticipate will fulfill their needs. Consumer motivation is dynamic in nature because their wants are frequently changing.

2. Consumer Psychographics:

Marketing practitioners and consumer researchers refer to Psychographics and lifestyle analysis or AIO (activity, interest and opinions) research. Consumer specific psychographics research is related to consumer personality, buying motives, interests, attitudes, beliefs and values. Services specific psychographics research are related to product attributes such as consumer responses about products, brands or a specific consumption situation.

i. Consumer Perception:

Perception is defined as the process by which an individual selects, organises and interprets stimuli into a meaningful and coherent manner. Stimuli are sensory inputs that include services, packages, brand names, advertisements and commercials. Sensory receptors are the human organs that receive sensory inputs. Sensation is the immediate and direct response of the sensory organs to simple stimuli.

ii. Learning and Consumer Involvement:

Consumer learning is the process of acquiring the knowledge related to purchase and consumption information.

iii. Consumer Attitudes:

Attitudes are expressions of inner feelings that reflect whether a person is favourably or unfavourably predisposed to some object, person or event. As an outcome of psychological processes attitudes are not directly observable but must be inferred from what people say or do.

3. Demographic Factors:

Demographics describe a population in terms of its size, distribution and structure. Demographics influence buying behaviour both directly and indirectly by affecting other attributes of individuals such as their personal values and decision styles. There are contradictory conclusions about the effect of age, income and gender for a particular service.

Age, age-groups, education level, income, occupation etc. serves as various dimensions of demographics. In India additional factors such as religion, social denominations, caste, age, family background, regional disparities in stales, linguistic difference, regional perception of class factor and the degree of impact of these factors in affecting social status, all play crucial roles in determining the social status of an individual.

4. Economic Factors:

Wealth, home ownership, number of earning members in a family, household income, expenditure, and rate of interest, inflation, economic conditions and investment patterns are some of the economic factors that have a strong influence on consumer purchase decisions.

5. Communication and Consumer Behaviour:

Communication is the transmission of messages from a sender to a receiver by means of signals of some sort sent through a channel. There are four basic components of all communications- a source, a destination, a medium and a message. There are two types of communication to which a consumer is exposed- interpersonal communication and impersonal (or mass) communication.

6. Socio-Cultural Factors:

Consumer in a group and consumer reference groups- A group may be defined as two or more people who interact to accomplish similar goals. Consumer relevant groups are family, friends, formal social groups, shopping groups, consumer action groups, work groups, references groups etc. Four basic functions provided by the family are relevant to consumer behaviour. These include economic well-being, emotional-support, suitable family lifestyles and family-member socialization.

Sociologists and researchers have strongly favoured the concept of Family Life Cycle (FLC) – a way to classify family units into significant groups. FLC is a strategic tool for marketers to segment families in terms of a series of stages spanning the life course of a family unit. Traditional family life cycle stages are bachelorhood, honeymooners, parenthood, post parenthood and dissolution.

i. Consumer and their Social Classes:

Social class is defined as the division of members of a society into a hierarchy of distinct status classes so that members of each class have relatively the same status and members of all other classes have either more or less status.

Social class is measured in terms of social status of its members and comparison of members of each social class with other social classes. Some of the variables of the social class are occupation, income, educational level and property ownership etc.

ii. Culture and Consumer Behaviour:

Culture is a sum total of learned beliefs, values and customs that serves to direct the consumer behaviour of a particular society. Subculture can be thought of as a distinct cultural group that exists as an identifiable segment within a larger and more complex society.

7. Consumer and Consumerism:

The word consumerism has many expressions depending on who is using the term government, business, consumer groups, academicians and researchers. Consumerism is defined as a social movement of citizens and government to enhance the rights and powers of buyers in relation to sellers.

Buying Motives of Consumers

A buying motive means what induces a customer to buy a product. There is a buying motive behind every purchase. But the motive may differ from one buyer to another. For example, one person may buy a watch to keep time while another may buy it as a gift for his beloved. A marketer must understand the buying motives of different kinds of customers in order to develop an effective marketing mix.

Buying motives may be classified as follows:

1. Internal and External Motives:

Internal buying motives are inherent in the minds of consumers. They arise from the basic needs like hunger, safety, comfort, pleasure, etc. Internal buying motives may be rational or emotional.

External buying motives are those which a customer learns or acquires from his environment. Social status, social acceptance, achievement, etc. are examples of such motives. Income, education, occupation, religion, culture, family and social environment influence external motives.

2. Rational and Emotional Motives:

Rational buying motives are those which are based on logical reasoning and consideration of economic consequences. They include the cost, durability and dependability of the product/service.

Emotional buying motives are based on personal feelings. These motives include ego, prestige, love and affection, status, pride, etc.

3. Product and Patronage Motives:

Product motives are of two types-primary and secondary. Primary buying motives are the reasons due to which consumers buy one class of products rather than another. These motives arise directly from human needs and wants. These include the desire for health, beauty, knowledge, relaxation, recognition etc.

Secondary or selective buying motives induce consumers to buy certain kinds of products. These include desire for convenience, dependability, durability, economy, versatility, etc. Patronage motives refer to factors that induce consumers to buy from certain outlets and not from other outlets.

Customer Buying Behaviour

Situation in the context of shopping is that a buying behaviour of a customer occurs at a specific time and at a specific shopping space. We can understand this concept with some very good examples. Let us say that a shopper is looking for facial massage services at an executive class boutique beauty parlour; however, this parlour opens for customers on every day of the week from 9 am to about 9 pm, the internal decoration gives it a boutique beauty parlour with the effects of soft lights and musical instruments like sarod and sarange are played smoothly to ease the psychological status of the consumer.

All these arrangements are just behaviour settings for the consumer. The above situation of the parlour acts as an interface between the customer and the service (facial massage). And all these factors are situational variables which are creating a perfect atmosphere between consumer and retailer. So, the situational variables are the ones which do not fall in the knowledge of a customer (intra-individual) and choose alternatives, that is, outlet location, layout opening, and closing hours.

1. Physical Setting:

It refers to the situational variables which covers the geographical location. These variables may be seen as the environment in which the customer goes to a shopping complex or reads a catalogue of the retail outlet.

Customers in this regard are categorised as follows:

The customers who travel for more than 30 minutes to reach the shopping complex are called for customers.
The customers who travel for less than 30 minutes to reach the shopping complex are called near customers.
The customers who prefer shopping before 3 pm are called early customers.
The customers who prefer shopping after 3 pm are called late customers.

Customer behaviour influences are based on the environmental conditions, for example, climatic conditions or the background music played in the retail store and the placement of the commodities.

2. Social Setting:

It is defined as the presence or absence of others together with their social attributes, opportunities for interaction. Social settings include almost everything in the shopping centre which is the mode of interaction with the customer. For example, a security person in the shopping centre is also a part of a social setting because a customer can interact with him or her.

A customer representative at a retail outlet is also a part of the social setting as well as the relatives and friends accompanying the customer to the retail outlet for shopping. The shoppers who come with other people for shopping to an outlet are called social shoppers and the shoppers who prefer to shop alone are known as solitary shoppers.

a. Temporal Aspects:

These aspects directly affect the situational variables of the shopping environment because the shopping time of the shopper and the time available to him or her for shopping are critical variables with positive effects on shoppers’ behaviour. Timings are very important in shopping, for example, dairy products like milk are sold by dairy retail outlets and the peak time for selling is early morning hours and evening hours only.

Household women prefer to shop at day time when their children are out there at the school and the family members are out for their job. The retailer has to set their shop timings while keeping these; factors in mind. Shoppers who take less than an hour for their shopping are known as quick customers. Shoppers who take more than an hour for their shopping are known as slow shoppers.

b. Task Definition:

This factor is a cognitive one and is more specific to the individual shopper and defines the motivational and experiential shopping situation. In a traditional shopper decision-making model information search and evaluation and effective situational influence on the definition of task are mentioned and play a critical role in decision-making.

The information processing time varies for every shopper and the time taken depends on whether a shopper is planning to purchase a practical or hedonistic product. For example, if a shopper has to buy a gift he or she will take more time to decide what to buy as compared to buying a personal care product.

So, it can be concluded that managing situational variables effectively in retail marketing mix may ensure profitability for the retailer. It is also very vital to know and understand the factors which create and affect the image of the retail shop.

C. Growing Market:

In a country like India, which has 450 million child populations and 8 million being added annually, the retail sector is set to grow more.

A study undertaken by the Associated Chambers of Commerce and Industry of India, which is one of the apex trade associations of India, says the Indian kids wear market is expected to reach Rs.95,000 crore by 2015. The kids’ fashion has infiltrated into tier-II and III cities like Dehradun, Chandigarh, Pune, Nashik, Indore, Varanasi and so on, the report adds.

This report finds that the growth of kids’ wear is at the rate of 17%, making it one of the most attractive categories. The report is based on children in the age group of 3-13 years. The study reasons that increased media exposure, double-income parents and peer pressure for children becoming more fashion and brand conscious are the major factors in this regard.

With a population of 1.2 billion, any subsequent numbers are bound to be staggering. However, we go beyond just high-level numbers and identify where the real demand lies in this vast and diversified geography. A brand conscious lot, consumers from the middle-class segment want to buy or consume iconic brands.