Consumer Behaviour provides the

answer
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.

So what do we need to know?

How does it affect marketing?
10 Golden Lessons in Consumer Behaviour

Lesson 1:
Consumers are
problem solvers
Purchases are responses

to problems consumers
face.
After realising that they

want to make a purchase,

they go through a series of
steps in order to make it.
It can seem automatic or

natural.
Its normally complicated

by consumer hyperchoice.

Lesson 2: Consumers think differently

a)

b)
c)
d)

Rationally: integrating as much information as possible

with what they already know about a product,
weighing pluses and minuses of each alternative and
arriving at a satisfactory decision.
Externally: buying products based on environmental
cues, such as a sale or promotion.
Experientially: buying products based on totality of
their appeal.
Momentarily: buying beyond satisfaction of their
needs.

Lesson 3: Consumers act

differently
a)Routinely: making decisions with little to no

conscious effort.
b)Partially: not as motivated to search for
information or to evaluate rigorously. They use
simple decision rules to choose.
c)Extensively: feel that eventual decision carries
a degree of risk.

Lesson 4: Consumers
want more stuff
Consumers recognise the

difference between current

state and ideal state.
When the ideal state

moves upward, they

recognise an opportunity.
When the actual state

moves downward, they

recognise a need.

Lesson 5: Consumers search for more info

a) Pre-purchase: involved with the purchase to make
b)
c)
d)
e)

f)

better decisions.
Ongoing: involved with the product to build a bank of
info for the future.
Internal: scanning memory to gather product
alternative information.
External: obtaining information from ads, retailers,
catalogs, friends, family and web sites.
Deliberate: existing product knowledge obtained from
previous information search or experience of
alternatives.
Accidental: exposure over time to observations of

Lesson 6: Consumers are irrational

(sometimes)
Some consumers avoid external search, especially with

minimal time to do so.

Others spend more time doing external search, especially

for symbolic items.

Some consumers select familiar brands when decision

situation is ambiguous (i.e. Brand Switching).

Others have a desire to choose new alternatives over more

familiar ones (i.e. Variety Seeking).

Lesson 7: Consumers are biased

(most of the times)
Consumers frame problems in terms of

gains/losses and this influences their decisions

(i.e. Mental Accounting).
Consumers are reluctant to waste something
they have paid for (i.e. Sunk-cost Fallacy).
Consumers assessment of risk differs when
they face options involving gains versus those
involving losses (i.e. Prospect Theory).

Lesson 8: Consumers try to avoid risk

Examples of perceived risk

Social risk and Physical risk

Lesson 9: Consumers can NOT remember every single brand

Consumer usually dont seriously consider every brand

they know about.

They often include only a surprisingly small number of
alternatives in their choice set (evoked set).
Marketers must focus on getting their brands in
consumers choice set.
Consumers often do not give rejected brands a second
chance.

Lesson 10: Consumers use known knowns to

know about the unknown knowns!
Consumer evaluate products in terms of what they already

know about a (similar) product.

Choice-set products usually share similar features
When faced with a new product, consumers refer to existing

product category knowledge to form new knowledge.

Marketers want to ensure that their products are correctly

grouped in the right category in the knowledge structure.