4.1 Defining Consumer Behaviour
Consumer behavior is the decision processes an individual or group involving evaluating, acquiring, using or consuming goods and services. A firm needs to analyze buying behavior for:
- Buyers reactions to a firms marketing strategy has a great impact on the firms success
- The marketing concept stresses that a firm should create a marketing mix that satisfies customers, therefore need to analyze the what, where, when and how consumers buy
- Marketers can better predict how consumers will respond to marketing strategies of they understand the buying behavior
To understand, the buyer decision-making process, the general model of the buyer decision process serves as a tool. This model consists of these five steps or stages, including the postpurchase step or stage:
1. Problem recognition
2. Information search
3. Evaluation of alternatives
4. Purchase decision and purchase
5. Post-purchase behavior
4.2 Models of the buyer decision process
Figure 5 shows the common general model of the decision process.
Let us briefly look at the steps, as they are also called stages, of the model. Actual purchasing is only one stage of the process. Not all decision processes lead to a purchase.
All consumer decisions do not always include all stages.
1. Problem Recognition: the first step is to recognize that there is a need, for instance, the need for food since the buyer feels hungry; and hunger stimulates the need to eat. That again triggers the need to search information for food.
2. Information search: information search leads to internal search, from memory or to the external search (from media, friends, shopping, internet, etc.,), or from both internal and external search. This stage may lead the stage of evaluating the alternatives. Which type of food to eat? At what price? Where? And when? And how?
3. Evaluation of Alternatives: depending on criteria for evaluation and features the buyer wants or does not want, the buyer chooses the food to buy.
4. Purchase decision : the purchase decision includes product, package, store, method of purchase and timing
5. Purchase: purchase may differ from decision, for instance, time of purchase and product availability.
6. Post-Purchase behavior: this may be satisfaction or dissatisfaction after purchase. There is a concept called Cognitive Dissonance- the situation of doubt about whether the right decision to purchase was made. This can be reduced by warranties, after sales
communication and supportive measures.
4.3 Factors affecting the consumer behavior
The factors that affect the characteristics of consumer behavior:
1. Cultural factors
2. Social factors
3. Personal factors
4. Psychological factors
1. Cultural Factors
Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture, and social class.
Basically, culture is the part of every society and is the important cause of person wants and behavior. The influence of culture on buying behavior varies from country to country therefore marketers have to be very careful in analyzing the culture of different groups, regions or even countries.
Each culture contains different subcultures such as religions, nationalities, geographic regions, racial groups etc. Firms can use these groups by segmenting the market into various small portions, for example, by designing products according to the needs of a particular geographic group.
• Social Class
Every society possesses some form of social class which is important , because the buying behavior of people in a given social class is similar. In this way marketing activities could be tailored according to different social classes. Here we should note that social class is not only determined by income but there are various other factors as well such as: wealth, education, occupation etc.
2. Social Factors
Social factors also impact the buying behavior of consumers. The important social factors are: reference groups, family, role and status.
• Reference Groups
Reference groups have potential in forming a person attitude or behavior. The impact of reference groups varies across products and brands. For example if the product is visible such as dress, shoes, car etc then the influence of reference groups will be high. Reference groups also include opinion leader (a person who influences other because of his special skill, knowledge or other characteristics).
Buyer behavior is strongly influenced by the member of a family. Therefore marketers are trying to find the roles and influence of the husband, wife and children. If the buying decision of a particular product is influenced by wife then the marketers will try to target the women in their advertisement. Here we should note that buying roles change with change in consumer lifestyles.
• Roles and Status
Each person possesses different roles and status in the society depending upon the groups, clubs, family, organization etc. to which he belongs. For example a woman is working in an organization as finance manager. Now she is playing two roles, one of finance manager and other of mother. Therefore her buying decisions will be influenced by her role and status.
3. Personal Factors
Personal factors can also affect the consumer behavior. Some of the important personal factors that influence the buying behavior are: lifestyle, economic situation, occupation, age, personality and self concept.
Age and life-cycle have potential impact on the consumer buying behavior. It is obvious that the consumers change the purchase of goods and services with the passage of time. Family life-cycle consists of different stages such young singles, married couples, unmarried couples etc which help marketers to develop appropriate products for each stage.
The occupation of a person has significant impact on his buying behavior. For example a marketing manager of an organization will try to purchase business suits, whereas a low level worker in the same organization will purchase rugged work clothes.
• Economic Situation
Consumer economic situation has great influence on his buying behavior. If the income and savings of a customer is high then he will purchase more expensive products. On the other hand, a person with low income and savings will purchase inexpensive products.
Lifestyle of customers is another import factor affecting the consumer buying behavior. Lifestyle refers to the way a person lives in a society and is expressed by the things in his/her surroundings. It is determined by customer interests, opinions, activities etc and shapes his whole pattern of acting and interacting in the world.
Personality changes from person to person, time to time and place to place. Therefore it can greatly influence the buying behavior of customers. Actually, Personality is not what one wears; rather it is the totality of behavior of a man in different circumstances. It has different characteristics such as: dominance, aggressiveness, self-confidence etc which can be useful to determine the consumer behavior for particular product or service.
4. Psychological Factors
There are four important psychological factors affecting the consumer buying behavior. These are: perception, motivation, learning, beliefs and attitudes.
The level of motivation also affects the buying behavior of customers. Every person has different needs such as physiological needs, biological needs, social needs etc. The nature of the needs is that, some of them are most pressing while others are least pressing. Therefore a need becomes a motive when it is more pressing to direct the person to seek satisfaction.
Selecting, organizing and interpreting information in a way to produce a meaningful experience of the world is called perception. There are three different perceptual processes which are selective attention, selective distortion and selective retention. In case of selective attention, marketers try to attract the customer attention. Whereas, in case of selective distortion, customers try to interpret the information in a way that will support what the customers already believe. Similarly, in case of selective retention, marketers try to retain information that supports their beliefs.
• Beliefs and Attitudes
Customer possesses specific belief and attitude towards various products. Since such beliefs and attitudes make up brand image and affect consumer buying behavior therefore marketers are interested in them. Marketers can change the beliefs and attitudes of customers by launching special campaigns in this regard.
4.4 Types of consumer buying behavior
Types of consumer buying behavior are determined by:
- Level of Involvement in purchase decision, importance and intensity of interest in a product in a particular situation
- Buyers level of involvement determines the reasons for motivation to seek information about a certain products and brands but virtually ignores others
The four type of consumer buying behavior are:
- Routine response/programmed behavior: buying low involvement frequently purchased low cost items; need very little search and decision effort; purchased almost automatically. Examples include soft drinks, and milk.
- Limited decision making: buying product occasionally. Requires a moderate amount of time for information gathering. Examples include clothes to know product class but not the brand.
- Extensive decision making/complex high involvement, unfamiliar, expensive and/or infrequently bought products. High degree of economic/performance/psychological risk. Examples include cars, homes, and education. It involves a lot of time seeking
information and deciding
- Impulse buying, no conscious planning. The purchase of the same product does not always elicit the same buying behavior. Product can shift from one category to the next.