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1. Submitted to- Submitted by-
Priyanka Mam Saksha Sharma
M.Com II
CONSUMER BEHAVIOUR

2. CONTENTS
 Changing Profile of Indian Consumer
 Consumer Buying Process
 Organizational buying Process

3. CHANGING PROFILE OF INDIAN
CONSUMER
 Changes in Indian economy
since 1990:-
 Booming economy
 Changing demographics
 Smaller households
 Increasing awareness
 Westernization
 Organized Retail Stores
 Employment, Saving and
Investment

4. CHANGING PATTERN OF
CONSUMER BEHAVIOUR
DEMOGRAPHICS
TECHNOLOGY
PUBLIC POLICY
CONSUMER
PATTERN

5. DEMOGRAPHICS
 Grey Population- By 2050 in W1 countries
and the major W2 as well world have an
enormous increase in the grey population as
the aging index designates that the 60+ age
group would be bigger than 14 group.
 Fitness on the rise- Lifestyles diseases like
obesity, cardiac, pulmonary problems,
diabetes is on the rise and hence the demand
for health clubs and fitness centers.
Traditional health systems are being a market
with great zeal like that of Patanjali.
 Single Parent Households- The alternative
family arrangement system is on the rise and
there is an increase in the no. of divorced
parents in the world. This forces business
organizations to reassess the family segment
in itself.

6. DEMOGRAPHICS
 Woman in Workforce- With the increasing
no. of working women, time is the most
important factor in households. In India the
share of women in workforce has been
about 25.6%, in 1981, it was 19.7%.
 Rise of middle class in W2 and W3
countries- Middle income group demand
value for money. Increase in this segment
created a large no. of first time buyers.
Study of National Council for Applied
Economic Research shows that while in
2003, India has only 181 million domestic
units of which 46 million were defined as
aspirers.

7. TECHNOLOGY
 Smart products amend the usage pattern,
maintenance and adaptability of the products.
Marketers now regularly involve customers,
suppliers, small specialist business and
independent contractors for developing and
introducing new products across the line and
mix.
 Information technology and information
goods allow decentralized innovation and
permits companies to delegate assignments to
various channel partners. This facilitates the
process of 'value co- creation' with a lot of
innovative attempts in the value chain
 The consumers are also becoming more and
more tech savvy and prefer more of the
complex technologies as their status symbol
and adapt quickly to new launches

8. PUBLIC POLICY
 Economic Pragmatism over Ideology- There is a worldwide
progress from rigidity of government control to the
liberalized one economy, i.e. to a laissez faire ideology.
Indian economy opened up with the economic reforms of
1991 and has received corporate investment to finance its
growth and infrastructure needs.
 Rights of passive consumers- Rights of consumers are
guaranteed through laws, stricter enforcement, financial
incentives for compliance etc. Consumer Protection Act,
Monopolies and Restrictive Trade Practices Act are some
of the examples.
 Regional Economic Integration- Due to shift toward free
market economy and globalization every product would be
available anywhere and everywhere. Free trade permits,
quicker, cheaper and enhanced supply of goods by
companies has also been achieved. Trade blocks like
ASEAN, NAFTA, SAFTA in which geographically close
countries allowed free movement of goods and trade in a
bid to achieve higher growth rates

9. CONSUMPTION PATTERNS
 Indians love to shop- It is a family outing. Window
shopping is part of the experience.
 Price is the market driver- Value for money is an
important criteria for potential shoppers in India.
 Beauty and wellness go together- Double income
families are the main drivers of demand. Women no longer
hesitate to pay hefty prices for wellness services.
 Ethnic Chic is in- Upper income women are adopting the
ethnic chic designer clothes, ethnic fabrics etc.
 Increasing affluence boosts personal vehicle market-
Middle class families use passenger cars. Middle income
young adult aspires to own a car in the future.
 Cell phone capture India’s imagination- The users are
growing but still there are huge untapped potentials in
India’s mobile markets.

10. RURAL CONSUMERS

11. RURAL CONSUMERS
 Classification of Rural consumers-
Category
Affluent
Middle
Class
Poor
Affluent- Rich farmers who have affordability but form too small a demand base for
marketing firms to depend on.
Middle Class- Farmers from resource rich states like U.P., Haryana, Punjab etc. fall in
this category and are a significantly large but very important demand base for marketers.
Poor- They are huge in size and have low purchasing power. If tapped, their huge volume
could turn the profitability for the marketers.

12. CONSUMER BUYING PROCESS

13. PROBLEM RECOGNIZATION
IDEAL
STAGE
ACTUAL
STAGE
TYPES OF PROBLEMS
ROUTINE PROBLEMS- Arise due to difference between actual and desired
sales and for which immediate solution is required.
EMERGENCY PROBLEMS- Arise suddenly and solution has to be found
immediately.
PLANNING PROBLEM- It is expected to occur but immediate solution is not
required.
EVOLVING PROBLEM- Problem may occur unannounced yet it needs no
immediate solution.

14. PROBLEM RECOGNIZATION
 This is often identified as the first and most important step in the
customer’s decision process. A purchase cannot take place
without the recognition of the need. The need may have been
triggered by internal stimuli (such as hunger or thirst) or external
stimuli (such as advertising or word of mouth).

15. INFORMATION SEARCH

16. INFORMATION SEARCH
 Having recognized a problem or need,
the next step a customer may take is the
information search stage, in order to find
out what they feel is the best solution.
 This is the buyer’s effort to search
internal and external business
environments, in order to identify and
evaluate information sources related to
the central buying decision.
 Your customer may rely on print, visual,
online media or word of mouth for
obtaining information

17. PRE- PURCHASE EVALUATION OF
ALTERNATIVES
 As you might expect, individuals will
evaluate different products or brands
at this stage on the basis of
alternative product attributes – those
which have the ability to deliver the
benefits the customer is seeking.
 A factor that heavily influences this
stage is the customer’s attitude.
Involvement is another factor that
influences the evaluation process.
 For example, if the customer’s
attitude is positive and involvement is
high, then they will evaluate a number
of companies or brands; but if it is low,
only one company or brand will be
evaluated.

18. PURCHASE
 The penultimate stage is where the purchase
takes place. Philip Kotler (2009) states that the
final purchase decision may be ‘disrupted’ by
two factors: negative feedback from other
customers and the level of motivation to accept
the feedback.
 For example, having gone through the
previous three stages, a customer chooses to
buy a new telescope. However, because his
very good friend, a keen astronomer, gives him
negative feedback, he will then be bound to
change his preference.
 Furthermore, the decision may be disrupted
due to unforeseen situations such as a sudden
job loss or relocation.

19. POST CONSUMPTION
EVALUATION
 Customers will compare products with their previous expectations
and will be either satisfied or dissatisfied. Therefore, these stages
are critical in retaining customers.
 This can greatly affect the decision process for similar purchases
from the same company in the future, having a knock-on effect at
the information search stage and evaluation of alternatives stage.
 If your customer is satisfied, this will result in brand loyalty, and
the Information search and Evaluation of alternative stages will
often be fast-tracked or skipped altogether.

20. POST CONSUMPTION
EVALUATION

21. DIVESTMENT
OPTIONS
DISPOSAL
OF
PRODUCT
RECYCLING
RE-
MARKETING
When a consumer finished his use age with his or her computer, he has to
dispose of it somehow. He can choose to set it to another person called Re-
marketing or exchange it to another computer, or take it to junkyard. With
other products consumer dispose of packaging and product literature as well
as the product itself.

22. ORGANIZATIONAL BUYING
PROCESS

23. PROBLEM RECOGNIZATION
 The purchasing/buying process begins when someone in the
company recognizes a problem or need that can be met by
acquiring goods or services.
 The common events that lead to this phase could be:
 i. The company decides to develop a new product and needs new
equipment and materials to produce this product.
 ii. It decides to diversify or expand and hence requires a multitude
of new suppliers. Etc.

24. DESCRIPTION OF THE NEED
 This phase involves determination of the characteristics and
quantity of the needed item. The general characteristics could be
reliability, durability, price etc. and the marketer along with the
purchasing manager, engineers and users can describe the
needs.
 The questions that could be posed are:
 i. What performance specifications need to be met?
 ii. What types of goods and services should be considered?

25. PRODUCT SPECIFICATION
 The buying organization has to develop the technical
specifications of the needed items. In this phase, the product is
broken down into items. The items in turn are sorted into standard
ones and new ones which need to be designed.
 The specifications for both are listed. As a marketer, he must
involve himself and his technical and financial counterpart to
determine the feasibility and also to elaborate the services they
can offer to develop and supply the product.

26. SUPPLIER SEARCH
 This phase only involves making a list of qualified suppliers. The
buyer now tries to identify the most appropriate vendor. The buyer
can examine trade directories, perform a computer search, or
phone other companies for recommendations.
 Marketers can participate in this stage by contacting possible
opinion leaders and soliciting support or by contacting the buyer
directly. Personal selling plays a major role at this stage.

27. PROPOSAL SOLICITATION
 Based on the specified criteria, some firms are asked to come over for
formal presentations.
 The proposal must include product specification, price, delivery period,
payment terms, taxes of experts and duties applicable, transportation
cost, cost of transit insurance and any other relevant cost or free
service provided.
 For purchase of routine products or services, phases 4 and 5 may occur
simultaneously as the buyer may contact the qualified suppliers to get
the latest information on prices and delivery periods.

28. SUPPLIER SELECTION
 At this stage, the various proposals are screened and a choice is
made. A significant part of this selection is evaluating the vendor.
 One study indicated that purchasing managers felt that the
vendor was often more important than the proposal. Purchasing
managers listed the three most important characteristics of the
vendor as delivery capability, consistent quality, and fair price.
 Another study found that the relative importance of different
attributes varies with the type of buying situations.
 For example, for routine-order products, delivery, reliability, price,
and supplier reputation are highly important. These factors can
serve as appeals in sales presentations and in trade ads.

29. ROUTINE ORDER
SPECIFICATIONS
 After the suppliers have been selected, the buyer negotiates the
final order, listing the technical specifications, the quantity
needed, the expected time of delivery, return policies, warranties
etc.
 In case of maintenance, repair and operating items, buyers are
increasingly moving towards blanket contracts rather than
periodic purchase orders.
 The buyer now writes the final order with the chosen supplier,
listing the technical specifications, the quantity needed, the
warranty, and so on.

30. PERFORMANCE REVIEW
 The final phase in the purchasing process
consists of a formal or informal review and
feedback regarding product performance as
well as vendor performance.
 The buyer may contact the end user and
ask for their evaluations which are in turn
given to the supplier or he may rate the
supplier on several criteria using a weighted
score method or the buyer might also
aggregate the cost of poor supplier
performance to come up with adjusted costs
of purchase including price.
 The performance review might lead to the
buyer to continue, improve or drop a
supplier.

32. THANKYOU