Module Overview

Modules 02 and 03 told you how to choose a customer and how to position against a competitor. Module 04 opens the customer up. It defines consumer behaviour, names the five roles inside a single purchase, walks the five-stage decision-making process end to end, catalogues the internal and external factors that shape it, and then tests all of it against a single family buying a single car.

Memory hook: The spine is Need recognition, Pre-purchase search, Evaluation of alternatives, Purchase, Post-purchase. Everything else in the module either explains a stage or explains who is playing which part inside it.

4.1 The Concept of Consumer Behaviour

4.1.1 Exploring Consumer Behaviour

Consumer behaviour is the study of how consumers decide to spend their available resources on their consumption. "Consumers" here means all kinds: individual, organisational and business consumers.

Common trap: the consumer and the customer are frequently different people, and marketing must address both. This is the same distinction introduced in Module 01 with the mother buying toothpaste for the family, and it is about to become the five purchase roles in Section 4.2.1.

4.1.2 Defining Consumer Behaviour

"Consumer behaviour is a study of buying units and the exchange process involved in evaluating, acquiring, consuming and disposing of goods, services and ideas."

Unpack the definition:

Three types of exchange:

• Organisation to consumer
• Organisation to organisation
• Consumer to consumer

4.1.3 Influencing Consumer Behaviour: The Pepsodent Case

Pepsodent, introduced in the 1990s, presented a value proposition focused on the idea that germs return to the teeth every time you eat, potentially damaging them. The recommendation that followed was that if you cannot brush after every meal, you should brush twice a day, once in the morning and once at night after dinner.

This is a textbook case of growing a market without adding a single customer.

Worked numerical: doubling consumption without doubling customers

Given: a market of 1 lakh (100,000) people, living in families of two, each family using 1 toothpaste tube per month. Pepsodent then persuades users to brush twice a day, so a tube is exhausted in 15 days instead of 30.

Number of families:

Monthly sales before:

Tubes per family per month after, if a tube lasts 15 days:

Monthly sales after:

Answer: monthly sales double from 50,000 to 1 lakh tubes, driven entirely by increased consumption per family and not by any increase in the number of customers.

Memory hook: This is the usage rate variable from Module 02's behavioural segmentation, converted into a campaign. You can grow by finding new buyers, or by making existing buyers use more. Pepsodent chose the second and did not have to win a single customer from a competitor.

4.2 Making Purchase Decisions

4.2.1 Roles in a Purchase Decision

A single purchase can involve up to five distinct roles, and one person can hold several of them or none.

Memory hook, and the strategic point the whole section exists to make: because the roles are separate, you have the option of targeting the initiator, the influencer, the decision maker, the buyer or the user at different stages of the decision-making process. Choosing which role to attack, and when, makes your strategy better than a strategy that treats "the customer" as one person.

The roles are also not fixed. They vary by product category, and they change over time as the market changes, society changes and people's awareness and knowledge change. What the lecture describes is a standard stereotype, not a law.

4.2.2 Types of Consumers

Consumers are typed by how they make decisions:

4.3 The Consumer Decision-Making Process

The five stages run in order: Need recognition → Pre-purchase search → Evaluation of alternatives → Purchase → Post-purchase.

4.3.1 Need Recognition

Need recognition is driven by the discrepancy between the actual state and the desired state. It depends on two things:

1. Actual state versus desired state. A gap must exist and be noticed.
2. A solution to the problem. Recognising a gap you cannot close does not start a purchase.

Triggers of need recognition:

Purchase intention categories. Not everyone who recognises a need is equally close to buying, so intent is graded:

Common trap: this ladder is a targeting device, not a description. Advertising spend on the "negative" and "not interested" bands is usually wasted; the profitable work is moving "positive but not immediate" to "firm and immediate".

4.3.2 Pre-Purchase Information Search

Search comes in pairs:

4.3.3 Types of Purchase Decisions

4.3.4 Factors Affecting the Pre-Purchase Search

4.3.5 Perceived Risk

Perceived risk is the uncertainty consumers face when they cannot foresee the consequences of their purchase decisions and cannot identify what those consequences will be.

Four types of perceived risk:

How consumers reduce perceived risk themselves. The list is a hierarchy, in descending order of the information available to the buyer:

1. Seek information.
2. If you cannot seek more information, be brand loyal, stay with what you already know works.
3. If you cannot be brand loyal, go for brand image, buy the brand with the best reputation.
4. If you have no information on brand image, rely on store image, trust the retailer instead of the brand.
5. Go for the most expensive brand, using price as a proxy for quality.
6. Seek reassurance: warranties, guarantees, testimonials, return policies.

Memory hook: each rung down the ladder is a weaker signal substituting for a missing stronger one. Price-as-quality is the last resort of a buyer with no other information, which is exactly why premium pricing works in opaque categories.

4.3.6 The Marketer's Response to Perceived Risk

The consumer's coping strategies are only half the picture. Here is what the marketer does about it, in four steps:

Memory hook: it is not just a case of identifying who the customer is and what information they want. It is also a case of finding the palatable way of giving them that information, in a form they can digest. Dumping a specification sheet on a buyer who is coping through store image will not reduce their risk.

4.3.7 Evaluation of Alternatives: The Sets

Consumers compare brands on specific criteria such as price, quality, brand reputation and service. The population of brands narrows through a series of nested sets.

How to measure the sets. The traditional method is a survey. More recently, social media supplies the same signal: Google Trends, Answer the Public, and trend data across social platforms.

Marketing implications:

• Awareness and evoked set. The goal for a brand is to get into the consumer's evoked set through advertising and engagement. If consumers are unaware of you, or aware but indifferent, you fall into the inert or inept sets and the sale is already lost.
• The brand's job is therefore two-stage: get into the evoked set, then get chosen out of it.

Common trap: being in the awareness set is not the same as being in the evoked set. A brand everyone has heard of and nobody considers is in the inert set, which is the worst place to spend advertising money.

4.3.8 Decision Rules: Compensatory and Non-Compensatory

From the evoked set, consumers apply a decision rule and select one brand; the rest are rejected.

Compensatory evaluation is a weighted-attribute score. This is the closest the course comes to a formal multi-attribute model.

Marketing implication: tailor the message to the rule. If your buyers evaluate compensatorily, highlight multiple attributes, because a weakness on one can be offset. If they evaluate non-compensatorily, focus everything on the one key feature, because nothing else will be read.

4.3.9 The Purchase Decision

The purchase stage is not a moment, it is an activity sequence, and the sequence differs in a store and in an app.

Why people shop. Buying a product is the outcome, not always the motive. The lecture names seven motives:

Retail therapy refers to the act of shopping to improve one's mood or emotional state. People often engage in it to cope with stress, anxiety or sadness. The act of purchasing items, whether needed or not, can provide a temporary sense of satisfaction or control, making individuals feel happier or less stressed.

Purchase factors marketers can influence:

The bargain-hunter design example. Suppose your customer loves bargaining. You facilitate it with a structure of schemes rather than a single low price. If you are a loyal customer you get this much discount. If you are a member you get that much. If you have previously bought products worth X rupees you get another. Of five shirts, each carries a different discount, or one comes with a buy-one-get-one on three of them but not the fourth.

Memory hook: for a bargain hunter, the price is not the point; the bargaining is the point. Offer a single flat rock-bottom price and the bargain hunter is not excited, even if it is genuinely the cheapest, because you have removed the exercise. Conversely, a status seeker is served by being recognised as a ten-year loyal customer whose opinion is recorded and put on the store website.

4.3.10 Post-Purchase Behaviour

Post-purchase is the most misunderstood stage. Marketers, brands and retailers give it little importance or resource, on the reasoning that once people have purchased, it is done. In the social media era that is indefensible: one unhappy customer can create a viral video that damages the whole business.

The rule, which is the central content of this section:

Memory hook: satisfaction is a comparison, not an absolute. A product can be objectively excellent and still produce dissonance if you promised more, and objectively ordinary and still delight if you promised less.

The Airbnb illustration. Airbnb's entire business model rests on post-purchase behaviour. Guests review properties and hosts review guests. If you had a good stay it becomes your responsibility to say so, because you want others to write reviews too, so that you get a good property next time. If you had a bad stay in a property that looked lovely and sounded lovely on the phone, you warn others so that you never repeat the experience. The same logic runs the other way for hosts. The pre-purchase decision is built entirely out of other people's post-purchase behaviour.

The over-promising versus under-promising problem. If delight requires performance to exceed expectation, the naive conclusion is to promise nothing: commit to nothing in advertising or any communication, and whoever walks in will leave delighted. The flaw is obvious. Nobody will walk in, because if you commit nothing there is no stated value for the customer. Whoever comes will be very happy, but nobody will come.

The opposite failure is to promise the sun and the moon. Many people will come, and 90 percent will be disappointed, because you are not delivering the sun and the moon.

Memory hook: post-purchase management is the question of how much to commit in your positioning and your promotional messaging. It is a thin line between over-promising and under-promising, and finding the right balance is the crucial skill of the stage.

The five-star versus dhaba illustration. In a five-star restaurant, food taking 45 minutes to an hour draws no complaint: there is ambience, you are with friends, you have drinks, and the wait is part of the experience. At a roadside dhaba or a fast-service darshini you expect the food almost before you arrive, and a two-minute delay makes you burst out. The food is not the variable. The expectation that was set is the variable.

How to manage expectations: engage with the customer. Social media, personalised emails and letters, telephone calls, any channel through which you communicate, connect and convey that you care and are there for them. Add testimonials of satisfied customers, so the buyer knows they are not the only purchaser and that others were happy.

Why involvement matters here. Post-purchase becomes more important the more expensive and high involvement the product is. If a soap or shampoo disappoints you throw it away and buy another; it is effectively perishable. A TV, a car or a washing machine ties you in for five or ten years, so a bad decision haunts you for a long time. That is precisely why brands, marketers, manufacturers and retailers must engage post-purchase in durable categories.

4.4 Factors Influencing Consumer Behaviour

4.4.1 The Four Factor Groups

The consumer decision-making process does not stand alone. It sits inside a set of influences, which split cleanly into internal and external.

Formally, four factor groups:

4.4.2 The Causal Chain: Personality to Lifestyle to Need Recognition

This is the elaboration the professor spends the most time on, and it links Module 04 back to psychographics in Module 02.

The chain runs: Personality → Lifestyle → Need recognition and search intensity → Consumption.

Personality gives rise to lifestyle. Lifestyle is the manifestation of personality. You display your personality through your lifestyle.

Worked through two personalities:

Memory hook: the identical product generates a completely different need recognition and a completely different search intensity in two people, purely because of personality working through lifestyle. That is why demography alone never explains purchase, and it is the same argument used to justify psychographic segmentation in Module 02.

4.5 Case Study: The Kapoors Buy a Car

The case was written by Prof. Viola Murthy and is unusual in this course in that the text was distributed to students. It is not a diagnostic case but a descriptive one: its purpose is to link a lot of theory to practice. It is designed as a conversation between the members of the Kapoor family, in which each member holds their own opinion about which attributes matter in a car and each has a different reason for wanting one.

4.5.1 The Case Facts

4.5.2 The Segmentation Framing

This is a case of group purchase behaviour, because a car is a high-ticket item. The analytical move that opens the case is this:

Memory hook: Each member of the family represents a different target segment. They are one household and four segments.

Run the four bases from Module 02 across the family:

The analytical sequence the case demands: identify the target segments, establish their characteristics, define the decision-making process for each of them, then identify the factors influencing each. Once you have that, you know the input to the marketing strategy for each one.

4.5.3 Characteristics of the Family Members

The professor's own characterisation:

The professor's own caveat: this is a deliberate stereotype case. Do not read the traits as claims about fathers, mothers, men or women.

Brand loyal versus brand image conscious. This is the distinction the professor draws explicitly between the father and the son, and it is examinable.

4.5.4 My Characterisation of the Family

Based on my observation of the case study, here is a detailed analysis of the characteristics of each member.

Father:

1. Conservative: he is resistant to change and hesitant to try a different brand, which is why he prefers the tried and tested Humberland's Compere over the two cars that are relatively newer in the market.
2. Practical decision maker: his focus on mileage and reliability rather than style and design shows this.

Mother:

1. Passive consumer: she has no real preference or need-recognition driver of her own, and is willing to listen to the others and let their reasoning lead. Her post-purchase doubt about whether they made the right decision by buying the expensive option reflects her cost consciousness rather than an independent position.
2. Mediator: because she has no preference of her own, she ensures all family members share their thoughts and that the decision rests on facts rather than impulses or trends.

Son:

1. Cognitive consumer: he focuses on analysis and trends, comparing the three options using sales data, reviews and JD Power ratings, which is the signature of a cognitive consumer.
2. Strong influence: visible in his repeated attempts to persuade his father. He even uses status as a way to differentiate the Crusader from the other cars.

Daughter:

1. Emotional consumer: even though she recognises some of the practical aspects of the car, her preference for the Falcon is mostly an emotional one.
2. Style-focused and socially influenced: she is attracted to the Falcon primarily for its sleek design and social approval. Her friends' ownership of the car and its stylish appearance strongly influence her opinion.

4.5.5 Need Recognition, Member by Member

The single most important table in the case. Note that all four have different reasons for wanting the same car.

Memory hook: all four types of consumer taught in Section 4.2.2 appear in one family: economic (father), passive (mother), cognitive (son), emotional (daughter), and each has a different need-recognition trigger. That is why this is complex buying behaviour.

Common trap: the mother is the passive consumer, not the economic one. She is cost conscious, but her defining feature is that she is the one member with no real need-recognition driver of her own. The economic consumer in this family is the father.

4.5.6 Pre-Purchase Information Search

All four searched. Search can be active (going out to get information) or passive (gathering what comes to you), and external (outside memory) or internal (inside memory).

Information sought across the family:

mileage, cost, inner space, ratings, smooth ride, ease of handling, dealer network and service facility, boot space, looks and style, air conditioning, type of handling (whether the vehicle can take rough handling or needs delicate handling), pickup, speed, other customers' opinions, and celebrity endorsement.

Sources of information used, and this is the general taxonomy the course teaches:

Factors that affected the search in this case:

The four perceived risks in the car purchase:

4.5.7 Evaluation of Alternatives: Criteria by Family Member

The professor's instruction is explicit: make a box with father, mother, son and daughter down one side and all the criteria across the top, and tick which criteria each member actually uses. The point of building it is to discover that even inside one family, people are not looking for the same things.

Here is that box, built from the case:

The evaluation rule the family used: compensatory decision making. No single attribute vetoed a car. Strength on some criteria offset weakness on others, which is exactly what allowed a car that lost on mileage and cost to still win overall.

Worked numerical: compensatory evaluation of the three cars

Given: the family's importance weights are mileage 0.25, cost 0.20, space 0.15, style 0.20 and brand and performance 0.20. Each car is rated out of 10.

Answer: the Crusader wins at 7.55, ahead of the Falcon at 6.80 and the Compere at 6.60.

Memory hook: the Crusader loses on mileage and on cost, the father's two favourite criteria, and still wins, because its space, style and performance more than compensate. That is compensatory evaluation in one line. Had the family evaluated non-compensatorily on mileage alone, the Compere would have won on a score of 9 and the case would have had the opposite ending.

4.5.8 The Purchase Decision and the Outcome

They chose Milton's Crusader.

The five roles in this case:

Post-purchase behaviour. It is too early in the case for a full evaluation, but overall the family is happy, because performance met or exceeded what they expected: they expected better looks, better boot space, higher speed and a better driving experience, and they got them. That is the expectation less than or equal to performance condition from Section 4.3.10.

The exception is the mother. She does not know whether it is good value for money, whether the cost is justified, whether it will prove more expensive over time, or whether more maintenance will be required. Those questions are open, and the case stops there.

Memory hook: the mother's open questions are textbook cognitive dissonance risk on the financial dimension. She was the passive consumer who never had a driver of her own, and she is therefore the member most exposed to post-purchase doubt about the expensive option.

4.5.9 Why the Crusader Won: The Conclusion

This is the analytical payoff of the entire five-clip case.

The Crusader was better than the Humberland Compere on performance, and the case text shows in what ways. But that is not the answer. The answer is about positioning and about which role Milton attacked.

Memory hook, the case's conclusion in one sentence: Milton's Crusader won because they could influence the son.

The son was the key influencer in the Kapoor family. Milton identified that if this kind of family is the target segment, the person to target is not the payer but the influencer. They won over the son, and the son in turn became the brand ambassador, the brand advocate. He gathered the information, and he created the ecosystem inside the family in which everybody agreed with his choice.

In modern terms, the son was the influencer, and Milton ran influencer marketing by winning him.

Why Amanda's Falcon lost. The Falcon did have the daughter as its influencer, and she did speak up for it. But:

• She was not organized.
• She did not gather enough information.
• She was not passionate or convincing enough.
• And on experience, the Crusader was simply much better than the Falcon.

The lesson: having an advocate is not enough. The advocate has to be credible, informed and persistent, which the son was and the daughter was not.

Why Humberland's Compere lost, and this is the case's sharpest lesson.

And it still lost.

Memory hook: Humberland had the strongest position on paper anywhere in the case. The person paying for the car, who was also the decision maker, was already a loyal current user, and Humberland still lost the sale. The reason is that Humberland defended its relationship with the buyer and never contested the influencer. Milton attacked the influencer and, through him, captured the decision maker. Owning the payer is not the same as owning the purchase.

The open strategic question the professor sets: what could Amanda's Falcon and Humberland's Compere each have done differently to win over the Kapoors? There is no single right answer. The associated question is what the positioning strategy of Milton's Crusader was, and what its point of parity and point of difference were against the other two.

4.5.10 What the Case Ends With

The case analysis ends when you can:

1. Develop the profile of the customers through the segmentation variables.
2. Identify the target segment, or in this case the four target segments in one household.
3. Link that to the consumer decision-making process, stage by stage: need recognition, pre-purchase information search, evaluation of alternatives, purchase and post-purchase, saying what each target segment did at each stage.

4.5.11 Discussion Response: Groceries versus a TV

The purchase of monthly groceries is a routine behaviour which does not need active information search. The decision-making process is quick, often based on brand loyalty or price sensitivity.

But purchasing a TV is an investment for a longer period of time, five to ten years, and it is more expensive. This makes it a high-involvement purchase which needs thorough research, comparing different brands, features and prices. A consumer will often seek reviews, product specifications and possibly in-store demonstrations before making a final decision, which is not the case for monthly grocery purchases.

Extension: in the module's own vocabulary, groceries are routine problem solving with internal, passive search and low perceived risk, while a TV is extended problem solving with external, active search and high functional, social and financial risk. That is also why post-purchase engagement matters far more for the TV: a disappointing soap is thrown away, a disappointing TV is lived with for a decade.

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