Indian Consumer Behaviour: Rational or Irrational?

Let us start by defining rational behavior. Any decision taken logically and with prudence is rational. In emotional parlance, you think with your mind. Its exact anti-thesis is irrational behaviour where you think with your heart. It defies logic and is completely guided by ‘feelings’. Thus what is it that marketers should focus on, rational or irrational? 

How are the marketers supposed to know who is rational and who isn’t? And as we will see further, it is also about when i.e. the rationality and irrationality differs when buying a certain types of products. Theoretically we know that B2B customers are rational whereas B2C customers are irrational (this is generally accepted and true to a certain extent). We will focus on the irrational aspect as it is difficult to predict and manage for the marketers.

Rational customers behave irrationally when it comes to brands. This is truer when the brand in consideration is of a product which the customer can show off to others or flaunt it. The product is more to show the other person the style of living or make a fashion statement.

E.g. A shirt, trouser, shoes, watch, glares, the type of coffee they drink, the type of restaurant they go to, the type of beverage they consume etc. 

If the brand name isn’t going to be visible, then the customer doesn’t consider too much of a difference due to brand name, it becomes a commodity where he buys it from the nearest shop at the lowest price. Only the filthy rich people go for branded stuff in this case. E.g. Adidas Boxers, Victoria Secret lingerie etc. 

For a housewife, the brand of the microwave or the refrigerator or washing machine would matter so that she could flaunt it to her neighbour. But to the man of the house it doesn’t matter. For him, the laptop brand would matter, whether the TV is usual CTV or a Plasma TV hanging on the wall of the Drawing room. 

Consumerism and a fetish for materialistic things have seeped in our psyche due to the availability of international brands and high disposable income. However it is changing a bit due to the present downturn which has made life more difficult for the marketer, as people have become price sensitive. So now the competition would not be just direct competition between similar products but between the budgets of the person. E.g. a family vacation costing Rs. 40000 or a plasma TV worth the same amount.

This is called as Budget competition and more has a more pronounced impact during a downturn when a person spends cautiously and is thrifty. 

Conspicuous consumption is the term which sums this all up.

There are 3 types of customers:

1. Responsive customers: These customers respond to your Sales promotion or Advertising.  But Push strategy works better in this case. The customer is looking for Value-for-money. There is no brand loyalty, no liking or preference. The want is influenced by the cost or the quantity in case of soaps, shampoo, toothpaste etc. obtaining these customers doesn’t cost much to the company. But they cannot be kept loyal to your brand. And keeping them would cost dearly and it isn’t worth the cost-return trade-off 

2. Anticipative customers: they are similar to responsive customers but the only difference is that they postpone their purchase and to wait for any offers from any company. They too are not brand loyal and look for value-for-money. E.g. they always wait for annual Diwali Sales or End-of-Season sales etc. 

3. Loyal customers: As the name suggests, they are loyal to the brand. They go looking out for the bran in the store. Sales pitches by salesmen do not have any impact on them. Advertising plays a key role here. The Pull strategy works in this case. For a competitor, it is very difficult to change the customers’ preference and change loyalty.