Unit 1: Introduction to consumer behaviour
Consumer Behaviour notes · PTU syllabus (MBA 921-18)
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Unit summary
Understanding why consumers buy is the foundation of marketing strategy. This unit covers the scope, importance and interdisciplinary nature of consumer behaviour, qualitative and quantitative consumer research, the uses and bases of market segmentation, consumer behaviour in the online space, and the use of IT and AI in consumer profiling.
After this unit you can
- Explain the scope, importance and interdisciplinary nature of consumer behaviour
- Compare qualitative and quantitative consumer research
- Apply bases of market segmentation
- Explain online consumer behaviour and IT and AI in consumer profiling
PTU syllabus topics
- Scope
- importance and interdisciplinary nature
- qualitative and quantitative consumer research
- market segmentation uses and bases
- consumer behaviour in the online space
- IT and AI in consumer profiling
Demographic
Age, income, gender
Geographic
Region, urban or rural
Psychographic
Lifestyle, values, personality
Behavioural
Usage rate, loyalty, benefits sought
Digital
Online behaviour, device, AI-built profiles
Topic 1
Scope and importance of consumer behaviour
Consumer behaviour is the behaviour that consumers display in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs (Schiffman and Kanuk). It is interdisciplinary — drawing on psychology, sociology, anthropology and economics — and covers individuals and organisations. Importance: designing products, segmenting markets, positioning brands, setting prices, choosing channels and creating effective promotions.
Topic 2
Interdisciplinary nature of consumer behaviour
Psychology
Motivation, perception, learning, personality, attitudes
Sociology
Groups, family, social class
Social psychology
Influence of others, opinion leadership
Cultural anthropology
Culture, rituals, symbols
Economics
Income, prices, utility
Neuroscience
Brain responses to brands (neuromarketing)
Topic 3
Qualitative and quantitative consumer research
Purpose
Explore motives, feelings and meanings
Measure and predict behaviour
Methods
Depth interviews, focus groups, projective techniques, ethnography
Surveys, experiments, observation, panel and scanner data
Sample
Small, purposive
Large, probability
Analysis
Interpretation by trained researchers
Statistical analysis
Output
Ideas, hypotheses, ad themes
Numbers that can be generalised
- Projective techniques: word association, sentence completion, picture (thematic apperception) tests, role-playing — reveal motives consumers cannot or will not state.
- Consumer research process: define objectives, collect secondary data, design primary research (qualitative or quantitative), collect data, analyse, report.
- Mixed methods: qualitative research generates ideas that quantitative research tests.
Topic 4
Market segmentation: uses and bases
- Uses: identify profitable segments, design products and messages for them, position brands, choose media, allocate budgets.
Geographic
Region, city tier, urban or rural, climate
Demographic
Age, gender, income, education, occupation, family life cycle
Psychographic
Lifestyle (AIO — activities, interests, opinions), values, personality
Behavioural
Usage rate, occasion, benefits sought, loyalty, readiness stage
Socio-cultural
Culture, religion, social class
Hybrid
Geodemographic, VALS
- Criteria for effective segments: measurable, substantial, accessible, differentiable, actionable.
Topic 5
Consumer behaviour in the online space
- Features: information-rich search, price comparison, peer reviews and ratings, social proof, impulse buying through one-click and flash sales, omnichannel journeys (research online, buy offline and vice versa).
- 1
Trigger
Ad, social post, need
- 2
Search and explore
Search engines, marketplaces, reviews
- 3
Compare and evaluate
Prices, ratings, delivery
- 4
Purchase
Payment options, UPI, cash on delivery
- 5
Experience
Delivery, returns
- 6
Advocate or complain
Reviews, social media
- Influences: website design and usability, trust and security, reviews and influencers, convenience, return policies, cash-on-delivery preference in India.
- Concerns: privacy, fraud, information overload, dark patterns.
Topic 6
IT and AI in consumer profiling
- Data sources: CRM and loyalty programmes, website and app analytics, cookies and device IDs, social media, transaction data.
- Techniques: clustering for segments, predictive models for churn and propensity to buy, recommendation engines (collaborative filtering), natural-language analysis of reviews (sentiment), lookalike audiences.
- Applications: personalised offers and content, dynamic pricing, next-best-action, chatbots and voice assistants.
- Ethics and law: consent and purpose limitation under the DPDP Act 2023, transparency, avoiding discriminatory profiling, data security.
Example
Streaming and e-commerce platforms recommend products based on viewing or purchase history of similar users — a large share of what people watch or buy comes from such recommendations.
Key terms
- Consumer behaviour
- Behaviour in searching for, buying, using and disposing of products
- Projective technique
- Indirect method revealing hidden motives
- Psychographic segmentation
- Segmenting by lifestyle, values and personality
- Omnichannel
- Seamless experience across online and offline channels
- Recommendation engine
- System suggesting products based on data about users
Quick revision
- Scope: individuals and organisations; importance for marketing decisions.
- Interdisciplinary: psychology, sociology, anthropology, economics, neuroscience.
- Qualitative (depth, focus groups, projective) vs quantitative (surveys, experiments).
- Segmentation bases: geographic, demographic, psychographic, behavioural.
- Online journey; AI profiling; DPDP Act.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.Define consumer behaviour.
- Q2.Why is consumer behaviour called interdisciplinary?
- Q3.Name two projective techniques.
- Q4.What is psychographic segmentation?
- Q5.State two features of online consumer behaviour.
- Q6.What is a recommendation engine?
Long-answer questions
- Q1.Explain the scope, importance and interdisciplinary nature of consumer behaviour.
- Q2.Compare qualitative and quantitative consumer research.
- Q3.Explain the uses and bases of market segmentation.
- Q4.Discuss consumer behaviour in the online space and the role of AI in consumer profiling.
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