Consumer Behaviour

Consumer behaviour the study of how individuals, groups, and organizations select, buy, use, and dispose
of goods, services, ideas, or experiences to satisfy their needs and wants.

Culture, subculture, and social class are particularly important influences on consumer buying behavior.
Culture is the fundamental determinant of a person’s wants and behavior. Marketers must closely attend
to cultural values in every country to understand how to best market their existing products and find
opportunities for new products.

Each culture consists of smaller subcultures that provide more specific identification and socialization for
their members. Subcultures include nationalities, religions, racial groups, and geographic regions. When
subcultures grow large and affluent enough, companies often design specialized marketing programs to
serve them.

Virtually all human societies exhibit social stratification, most often in the form of social classes, relatively
homogeneous and enduring divisions in a society, hierarchically ordered and with members who share
similar values, interests, and behavior. One classic depiction of social classes in the United States defined
seven ascending levels: (1) lower lowers, (2) upper lowers, (3) working class, (4) middle class, (5) upper
middles, (6) lower uppers, and (7) upper uppers.

Private Consumers  consumer product

purchase: individual or household (chocolate bar, toothpaste). A member of the household like a parent
makes a purchase for the whole household.

Business Customers  organisational product

purchase:

-industrial market (raw materials, machinery): purchase things used in the industrial process to produce
the final goods/services

-reseller market (retailers, supermarkets): we buy a finished product to resell it to a final customer

-government market (local authority, defence forces)

Customers:

- Who is important?
- How do they buy?
- What are their choice criteria?
- Where do they buy?
- When do they buy? Is it a seasonal purchase? Are people buying products in the weekend?

The answers to these questions can be derived from personal contact with customers and, increasingly, by
employing marketing research. You can answer these questions by looking at what consumers say in forms
or in questionnaires.
Roles in the Consumer Buyer Decision-Making Process

Buyer: is the person who makes the purchase. He may go to the store and physically collect the product.

User: is the person who will use the product.

Initiator: is the person who identifies a need or want that has to be satisfied. It may also identify a problem
that needs a solution.

Influencer: is the person who tries to influence other people involved in the purchase decision. He will
conduct an information research to find out what alternatives are available. He will try to impose his choice
criteria on the final purchase decision.

Decider: is the person who has the power or financial authority to make the purchase decision. The decider
is the most important role from a marketing point of view.

Sometimes a person can play all of these roles. From a marketing perspective, the most important role is
the decider.

Who buys?

‘Flash’ all-purpose cleaners’ 2018 TV advert challenges traditional household roles. It features a man using
the household cleaning product rather than a woman, which has normally been the case in the past.

How do they buy? Understanding Consumer Behaviour

Understanding how consumers buy and what influences their buying decision are core questions in the
field of consumer behavior.

The dominant paradigm in consumer behaviour is known as the information processing approach and has
its roots in cognitive psychology.

It sees consumption as largely a rational process – the outcome of a consumer recognizing a need and then
engaging in a series of activities to attempt to fulfil that need.
An alternative paradigm to understanding consumer behavior has emerged: Consumer culture theory
(CCT)

Views consumption as a much less rational or conscious activity. It is rather perceived as a more
sociocultural or experiential activity that is laden with emotion.

Ethnography has also become popular due to greater acceptance of the CCT approach. It is a qualitative
research method that seeks to understand environmental, social, cultural and psychological influences on
consumers. It involves observing people and their actions rather than asking them to self-report what they
do. For example, German household goods manufacturer Miele used ethnography to learn about its
consumers’ behaviour. It observed constant cleaning in homes where some family members were suffering
from allergies. As a result, it designed a vacuum cleaner with a traffic-light indicator that shows when a
surface is dust free.

Consumer decisions can be broken down into 4 types:

Evidence suggests we have low involvement with most low-cost, frequently purchased products. Marketers
use four techniques to try to convert a low-involvement product into one of higher involvement.

Some buying situations are characterized by low involvement but significant brand differences. Here
consumers often do a lot of brand switching. Think about cookies. The consumer has some beliefs about
cookies, chooses a brand without much evaluation, and evaluates the product during consumption. Next
time, the consumer may reach for another brand out of a desire for a different taste. Brand switching
occurs for the sake of variety, rather than dissatisfaction.

High-involvement decisions are those that are important to the buyer. These decisions are closely tied to
the consumer’s ego and self-image. They also involve some risk to the consumer. This may include financial
risk (highly priced items), social risk (products that are important to the peer group), or psychological risk
(the wrong decision may cause the consumer some concern and anxiety). In making these decisions,
consumers generally feel it is worth the time and energy needed to do research and consider solution
alternatives carefully.
Low-involvement decisions are more straightforward, require little risk, are repetitive, and often lead to a
habit. In effect, these purchases are not very important to the consumer. Financial, social, and
psychological risks are not nearly as great. In these cases, it may not be worth the consumer’s time and
effort to search for exhaustive information about different brands or to consider a wide range of
alternatives. A low-involvement purchase usually involves an abridged decision-making process. In these
situations, the buyer typically does little if any information gathering, and any evaluation of alternatives is
relatively simple and straightforward. Consumers are diligent enough to get a product they want, but they
generally spend no more time or effort than is needed.

High degree of involvement: the product is expensive and complex, there is a degree of risk associated
with it. The purchase happens infrequently.

Low degree of involvement: low price, frequent purchase, less complex. It can be an impulsive purchase
because it only involves few euros. There is not a degree of risk related to the product.

COMPLEX BUYING BEHAVIOUR: high involvement and significant differences between brands.

Ex: purchase of a new car. It is high involved because your friends will see your car, which tells a lot about

you. There is a lot of information search that has to be conducted. The marketer has to make it clear in

the marketing communication what features differentiate the product from products produced by others.

DISSONANCE-REDUCING BUYING BEHAVIOUR: there is a high involvement purchase but there are a few
differences between brands.

Ex: carpet. The carpet is highly involved because people coming into your house will see it. However,
customers do not perceive many differences among brands, so they decide depending on the price and on
convenience. For example, they may decide to purchase the carpet in a store that is near home. The post-
purchase discomfort results by the doubt of having made a right decision or not.

HABITUAL BUYING BEHAVIOUR: low involvement purchase (low cost, little risk, frequent purchase); little

Differentiation. Ex: table salt. If I always choose the same brand producing table salt, this is not because of

loyalty, but because of habits.

VARIETY-SEEKING BUYING BEHAVIOUR: significant differentiation. Ex: biscuit brands. Consumers can show

a preference for a brand because they perceive differences among brands. However, they may switch

brand since their choice is so low cost and not risky. A market leader is going to ensure that you have a

good shelf position in stores, that shelves are always full of your products and that advertisement is

keeping your brand in consumers’ minds. If you are a minor brand, you may offer discounts or tempt

consumers to try your products.

The Buyer Decision-Making Process

1.Need Recognition is the first stage of the buyer decision process, in which the consumer recognizes a
problem or need triggered by:

-Internal stimuli: are things like your physical needs (food, drink, clothes). Internal stimuli are
internal to the consumer.
-External stimuli: when a person is affected by outside influences. External stimuli are things like
social media, advertisements, your peers, your friends and family. External stimuli are external to
the consumer.

The buying process starts when the buyer recognizes a problem or need triggered by internal or external
stimuli. With an internal stimulus, one of the person’s normal needs—hunger, thirst, sex— rises to a
threshold level and becomes a drive. A need can also be aroused by an external stimulus.

Marketers need to identify the circumstances that trigger a particular need by gathering information from
several consumers. They can then develop marketing strategies that spark consumer interest. Particularly
for discretionary purchases such as luxury goods, vacation packages, and entertainment options, marketers
may need to increase consumer motivation so a potential purchase gets serious consideration.

2. Information Search is the stage of the buyer decision process in which the consumer is motivated to
search for more information. We can distinguish between two levels of engagement in the search. The
milder search state is called heightened attention. At this level a person simply becomes more receptive to
information about a product. At the next level, the person may enter an active information search: looking
for reading material, phoning friends, going online, and visiting stores to learn about the product.

Sources of information:

◦ Personal sources: Family, friends, neighbours, acquaintances

◦ Commercial sources: Advertising, Web sites, salespersons, dealers, packaging, displays.

Commercial sources are marketing advertisements controlled by the marketer.

◦ Public sources: Mass media, consumer-rating organizations. This kind of source is available
in the public domain.

◦ Experiential sources: Handling, examining, using the product. These sources allow free try
of the product (ex.Netflix)
The relative amount and influence of these sources vary with the product category and the buyer’s
characteristics. Although consumers receive the greatest amount of information about a product from
commercial—that is, marketer-dominated—sources, the most effective information often comes from
personal or experiential sources, or public sources that are independent authorities.

Each source performs a different function in influencing the buying decision. Commercial sources normally
perform an information function, whereas personal sources perform a legitimizing or evaluation function.

Consumers were used to commercial sources. Nowadays commercial sources are less trusted than personal
and public sources. The marketer has to know which sources are mostly consulted and make sure that the
brand is represented.

3. Alternative evaluation is the stage of the buyer decision process in which the consumer uses
information to evaluate alternative brands in the choice set.

Consumers choice set: the brand upon which they rely.

Consumers compare brands and products based on technical aspects (quality, performance, design,
reliability). They also look at the cost of the product. Consumers also consider social aspects (what is the
status associated with the product, whether it is fashionable and trendy or not) and personal self (how the
product will express their identity, how it makes them feel).

The marketer is interested in pointing out the top five brands that the customer considers in his decision
process.

No single process is used by all consumers, or by one consumer in all buying situations. There are several
processes, and the most current models see the consumer forming judgments largely on a conscious and
rational basis. Some basic concepts will help us understand consumer evaluation processes: First, the
consumer is trying to satisfy a need. Second, the consumer is looking for certain benefits from the product
solution. Third, the consumer sees each product as a bundle of attributes with varying abilities to deliver
the benefits.

What criteria (factors) did you consider before choosing third level institute?

- taught subjects

- future job expectations

- location

- reputation

4. Purchase decision is the buyer’s decision about which brand to purchase. In the evaluation stage, the
consumer forms preferences among the brands in the choice set and may also form an intention to buy the
most preferred brand.

The purchase intention may not be the purchase decision due to:

▪ Attitudes of others: The more intense the other person’s negativism and the closer he or
she is to us, the more we will adjust our purchase intention. The converse is also true.

▪ Unexpected situational factors: these factors may erupt to change the purchase intention.
5. Postpurchase behavior is the stage of the buyer decision process in which consumers take further
action after purchase, based on their satisfaction or dissatisfaction.

Word of mouth behaviour is the most important thing in the marketing environment because if the
consumer is satisfied, he will positively advertise and praise your products to family and friends; he will do
the marketing work for you.

After the purchase, the consumer might experience dissonance from noticing certain disquieting features
or hearing favourable things about other brands and will be alert to information that supports his or her
decision. Marketing communications should supply beliefs and evaluations that reinforce the consumer’s
choice and help him or her feel good about the brand. The marketer’s job therefore doesn’t end with the
purchase. Marketers must monitor postpurchase satisfaction, postpurchase actions, and postpurchase
product uses and disposal.

Cognitive dissonance is buyer discomfort caused by postpurchase conflict. Consumers can do a lot of brand
damage.

Influences on consumer purchasing behaviour_ Personal Factors

⮚ Age and Life-Cycle Stage: consumer behaviour is tied to the significant life events and
circumstances people are experiencing at any given moment. Certain ages have need for certain
products, different life stages have different needs

▪ Nielsen PRIZM Life Stage Groups system: they develop this classification system to identify
the different types of life-cycle stages. Ex: young achievers, first time parents, mid-life
success, affluent empty nesters.

⮚ Occupation affects the goods and services bought by consumers. This affects for example
equipment and clothes.

⮚ Economic situations include trends in: spending, personal income, savings, interest rates.

⮚ Lifestyle is a person’s pattern of living as expressed in his or her psychographics. Psychographics

looks at 3 things: AIO = activities, interests, opinions

⮚ Personality refers to the unique psychological characteristics that distinguish a person or group.
Ex: self-confidence, sociability, autonomy.

Maslow’s 5 categories of motivation:

- Self-actualization needs (self-development and realization). Need to maximise your potential.

- Esteem needs (self-esteem, recognition, status). Need for recognition, respect.
- Social needs (Sense of belonging, love). Need for friendship, love, intimacy.
- Safety needs (security, protection). Need to feel safe and secure at home, in the community.
- Physiological needs (food, water, shelter = riparo). Basic and primary needs

We use Maslow’s scheme in marketing communication to better communicate with consumers.

Abraham Maslow sought to explain why people are driven by particular needs at particular times. His
answer is that human needs are arranged in a hierarchy from most to least pressing—physiological needs,
safety needs, social needs, esteem needs, and self-actualization needs. People will try to satisfy their most
important need first and then try to satisfy the next most important.

Influences on consumer purchasing behaviour_ Social Factors

Social factors such as reference groups, family, and social roles and statuses affect our buying behavior.

Influencer marketing involves using individuals that have social media influence to reach consumers. They
can persuade consumers.

The Digital Consumer:

- Connect: influencers connect with like-minded brands

- Consume: consume brand content online and other users’ content about the brand
- Create: influencers create and generate their own content
- Control: influencers control their identity and how they express themselves online

Impact of Social Media Influencers

Nespresso launched an Instagram influencer campaign to make the product known to millennials.

Nespresso chose top influencers Adam Gallagher, who is admired for his classic and effortless style, and
Aimee Song, a top fashion blogger, to post about the brand on Instagram.

Both influencers reached different audiences, but their personas, centered on elegance and good taste,
were an excellent fit for Nespresso.

Influencers cost a lot of money. This depends on the number of followers and on the engagement of
followers.