lecture notes

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CONSUMER MARKETS AND CONSUMER BUYING BEHAVIOUR
Definition of Buying Behaviour:
Buying Behaviour is the decision processes and acts of people involved in
buying and using products. The firm need to understand:
 Why consumers make the purchases that they make?
 What factors influence consumer purchases?
 The changing factors in our society.
Consumer Buying Behaviour refers to the buying behaviour of the ultimate
consumer/final consumers. It is a reaction of the consumers’ towards a product
or service before and after buying. Ultimately, consumer behaviour can be
defined as those acts of individuals directly demonstrated in obtaining and using
economic goods and services, including the decision process that determines
this act. A firm needs to analyze buying behaviour for:
 Buyer’s reactions to a firms marketing strategy has a great impact on the
firm’s success.
 The marketing concept stresses that a firm should create a Marketing Mix
that satisfies (gives utility to) customers, therefore need to analyze the
what, where, when and how consumers buy.
 Marketers can better predict how consumers will respond to marketing
strategies.
Consumer markets are all the individuals and households who buy or acquire
goods and services for personal use or consumption. Consumers are
comprised of all or some of the following participants in the buying process.
These are:

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 The initiator who is the first person who thinks of or suggests the idea of
buying a particular good or service because his /her need or want arises.
 The influencer is a person whose views or advice is important in making
a final decision.
 The decider is a person who determines any part of or the entire buying
decision such as what to buy, where to buy, and how much to buy.
 Gatekeepers control the flow of information to others. For example,
purchasing agents often have authority to prevent salespersons from
seeing users or deciders.
 The buyer is a person who makes the actual purchase
 The user is the person who consumes or uses the product or services.
Stages ofthe Consumer Buying Process
Five Stages to the Consumer Buying Decision Process. 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 5 stages, it is determined by the
degree of complexity. Therefore, consumer buying behaviour focuses on what
someone buys and why? Before anything is purchased the buyer goes through
the following:
The 5 stages are:
1. Problem Recognition (awareness of need): difference between the desired
state and the actual condition. Deficit in assortment of products. Hunger--
Food. Hunger stimulates your need to eat.
Can be stimulated by the marketer through product information--did not
know you were deficient? Therefore the process start with buying or
recognising a need or want by internal or external stimuli.
2. Information search:

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Once a need or want is recognised then both products and brand
alternatives must be identified. There are usually many alternatives that
are available. The search is influenced by such factors as:
 What is the cost involved?
 How much information the customer already has either from past
experience or other sources.
 The amount of perceived risk if wrong selection is made.
The information is searched from the sources below:
o Internal search, memory: one makes a recall from the past
experience or from one’s memory. This search is usually sufficient
for frequently purchased products. The external search is used
when the past experience or recall is not enough.
o External search if you need more information. Friends and relatives
(word of mouth). Marketer dominated sources, comparison
shopping, public sources etc. The external search is normally used
if you need more information. A successful search leaves a buyer
with possible alternatives.
A successful information search leaves a buyer with possible alternatives,
the evoked set.
3. Evaluation of Alternatives: the information search clarifies the problem
for the consumer. Need to establish criteria for evaluation, features the
buyer wants or does not want. Rank/weight alternatives or resume search.
May decide that you want to eat something spicy, Indian gets highest
rank etc.

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If not satisfied with your choice then returns to the search phase. Can you
think of another restaurant? Look in the yellow pages etc. Information
from different sources may be treated differently. Marketers try to
influence by "framing" alternatives.
Therefore, once all the reasonable alternatives are identified, the
consumer must evaluate each one prior to making a purchase decision.
The criterio the consumer uses includes past experience and attitudes as
well as other opinion. The consumer then arrives at a choice.
4. Purchase decision: one has to choose from the given alternative, includes
product, package, store, method of purchase etc.
5. Post-Purchase Evaluation: outcome: Satisfaction or Dissatisfaction.
The post-purchase evaluation basically is about the purchase outcome
basing on whether the person was satisfied or not. After buying a product,
the consumer compares it with expectations and is either satisfied or
dissatisfied. If a product matches the expectations of customer, then the
customer is satisfied and if it falls short then the customer is unsatisfied.
Cognitive Dissonance, have you made the right decision. This can be
reduced by warranties, after sales communication etc.
After eating meat and posh, may think that really you wanted a fish and
rice instead.
Types of ConsumerBuying Behaviour
Buying behaviour differ greatly. The different types of consumer buying
behaviour are determined by:
 Level of Involvement in purchase decision. Importance and intensity of
interest in a product in a particular situation.

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 Buyers’ level of involvement determines why he/she is motivated to seek
information about a certain products and brands but virtually ignores
others.
High involvement low involvement
Significant differences
between brands.
Few differences
between brands.
Complex buying behaviour: consumers undertake complex buying behaviour
when they are highly involved in a purchase and perceive significant differences
among brands.
Consumers may be highly involved when the product is expensive, risky,
purchased infrequently and highly self-expressive. E.g Honda Motorbike, high
priced goods, products visible to others, and the higher the risk the higher the
involvement. Types of risk include Personal risk, Social risk and economic risk
Marketers of high-involvement products must understand the information-
gathering and evaluation behaviour of high –involvement consumers. They
need to help buyers learn about product-class attributes and their relative
importance, and about what the company’s brand offers on the important
attributes. Marketers must motivate store salespeople and the buyers’
acquaintances to influence the final brand choice.
Complex buying
behaviour
Variety seeking buying
behaviour
Dissonance reducing
buying behaviour
Habitual buying
behaviour

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Dissonance-Reducing buying behaviour: it occurs when consumers are
highly involved with an expensive, infrequent, or risky purchase, but see little
difference among brands. E.g. a consumer buying carpeting may face a high-
involvement decision because carpeting is expensive and self-expressive.
Buyers may consider most carpet brands in a given price range to be the same.
In this case because perceived brand differences are not large, buyers may shop
around to learn what is available. But buy relatively quickly. They may respond
primarily to a good price or to purchase convenience.
After the purchase, consumers might experience post-purchase dissonance (after
sales discomfort) when they notice certain disadvantages of the purchased
carpet brand or hear favourable things about brands not purchased. To counter
such dissonance, the marketer’s after-sale communications should provide
evidence and support to help consumers feel good about their brand choices.
Habitual buying behaviour: it occurs under conditions of low consumer
involvement and little significant brand difference. E.g. salt. Consumers have
little involvement in this product category. They simply go to the store and
reach for a brand. If they keep reaching for the same brand, it is out of habit
rather than strong brand loyalty. Consumers appear to have low involvement
with most low cost, frequently purchased products.
Consumers do not search extensively for information about the brands, evaluate
brand characteristics, and make weighty decisions about which brand to buy.
Instead, they passively receive information as they watch television or read
magazines.
Buyers are not highly committed to any brand, marketers of low-involvement
products with few brand differences often use price and sales promotions to
stimulate product trail.

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Variety-seeking buying behaviour: it is characterised by low consumer
involvement but significant perceived brand differences. Consumers always do
a lot of brand switching. Brand switching occurs for the sake of variety rather
than because of dissatisfaction.
With this type of behaviour, the marketing strategy may differ for the market
leader and minor brands. The market leader will try to encourage habitual
buying behaviour by dominating shelf space, keeping shelves fully stocked, and
running frequent reminder advertising. Challenger firms will encourage variety
seeking by offering lower prices, special deals, coupons, free samples, and
advertising that presents reasons for trying something new.
Factors that influence Consumer behaviour
A consumer, making a purchase decision will be affected by the following four
factors. These include:
1. Personal factors
2. Psychological factors
3. Social factors
4. Cultural factors.
The marketer must be aware of these factors in order to develop an appropriate
Marketing strategy for its target market
1.Cultural factors: culture is the most fundamental determinant of a person’s
wants and behaviour. Culture is the basic set of values, perception, wants, and
behaviours of a given people at a particular time and place. Human behaviours
are largely learned.
Culture refers to is also a set of values, ideas, and attitudes that are accepted by
a homogenous group of people and transmitted to the next generation.

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Culture also determines what is acceptable with product advertising. Culture
determines what people wear, eat, reside and travel.
Culture can be divided into subcultures:
o geographic regions
o human characteristics such as age and ethnic background.
Culture effects what people buy, how they buy and when they buy.
Every group or society has a culture, and cultural influences on buying
behaviour may vary greatly from country to country and from continent to
continent. Failure to adjust to these differences can result in effective marketing
or embarrassing mistakes.
Marketers are always trying to spot cultural shifts in order to discover new
products that might be wanted. For example increased desire for leisure time
has resulted in more demand foe convenience products and services.
Each culture contains small sub culture. This is a group of people with shared
value systems based on common life experiences and situations. Sub cultures
include nationalities, religion, racial groups, and geographic regions. Many
subcultures make up important market segments, and marketers often design
products and marketing programs tailored to their needs
Social classes: it is an open group of individuals who have similar social rank
.it is relatively permanent and ordered divisions in a society whose members
share similar values, interests, and behaviours. Social classes are not determined
by a single factor, such as income but are measured as a combination of
occupation, income, education, wealth, and other variables.

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Social cases show distinct product and brand preferences in areas such as
clothing’s, home furnishings, leisure activity, and automobiles.
Social class influences many aspects of our lives. For example,upper middle
class Americans prefer luxury cars Mercedes.
o Upper Americans-upper-upper class, .3%, inherited wealth,
aristocratic names.
o Lower-upper class, 1.2%, newer social elite, from current
professionals and corporate elite
o Upper-middle class, 12.5%, college graduates, managers and
professionals
o Middle Americans-middle class, 32%, average pay white collar
workers and blue collar friends
o Working class, 38%, average pay blue collar workers
o Lower Americans-lower class, 9%, working, not on welfare
o Lower-lower class, 7%, on welfare
Social class determines to some extent, the types, quality, quantity of
products that a person buys or uses.
Lower class people tend to stay close to home when shopping, do not
engage in much pre-purchase information gathering.
2. Social factors:
Consumer wants, learning, motives etc. are influenced by opinion leaders,
person's family, reference groups, social roles and status.
 Opinion leaders--

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Marketers try to attract opinion leaders...they actually use (pay) spokespeople to
market their products. Opinion leaders a person within a reference group who,
because of special skills, knowledge, personality, or other characteristics, exerts
influence on others.
 Family Influences--
Family is the most basic group a person belongs to. Marketers must understand:
o that many family decisions are made by the family unit
o consumer behavior starts in the family unit
o family roles and preferences are the model for children's future
family (can reject/alter/etc)
o family buying decisions are a mixture of family interactions and
individual decision making
o family acts an interpreter of social and cultural values for the
individual.
The Family life cycle: families go through stages, each stage creates
different consumer demands:
o bachelor stage
o newly married, young, no children...me
o full nest I, youngest child under 6
o full nest II, youngest child 6 or over
o full nest III, older married couples with dependant children
o empty nest I, older married couples with no children living with
them, head in labor force
o empty nest II, older married couples, no children living at home,
head retired
o solitary survivor, in labor force

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o solitary survivor, retired
o Modernized life cycle includes divorced and no children.
 Reference Groups
Individual identifies with the group to the extent that he takes on many of
the values, attitudes or behaviors of the group members.
Families, friends, civic and professional organizations.
Any group that has a positive or negative influence on a persons attitude
and behavior.
Membership groups
Affinity marketing is focused on the desires of consumers that belong to
reference groups. Marketers get the groups to approve the product and
communicate that approval to its members. Credit Cards etc.!!
Aspiration groups (want to belong to)
Disassociate groups (do not want to belong to)
The degree to which a reference group will affect a purchase decision depends
on an individual’s susceptibility to reference group influence and
 Roles and status:
A person belongs to many groups- family, clubs, and organisations. The
person’s position in each group can be defined in terms of both roles and status.
Each role carries a status reflecting the general esteem given to it by society.
People always often choose products that show their status in society.
3. Personal factors

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A buyer’s decisions also are influenced by personal characteristics such as the
buyers’ age and life-cycle stage, occupation, economic situation, lifestyle, and
personality and self –concept.
Age and life-cycle stage.
Customers change the goods and services they buy over their lifetimes. Tastes
in food, clothes, furniture, and recreation are often age related. Buying is also
shaped by the stage of the family life cycle. Marketers always define their target
markets in terms of life-cycle stage and develop appropriate products and
marketing plans for each stage.
Occupation:
A person’s occupation affects the goods and services bought. Marketers try to
identify the occupational groups that have an above-average interest in their
products and services. A company can even specialise in making products
needed by a given occupational group.
Economic situation:
A person’s economic situation will affect product choice. Marketers of income-
sensitive goods watch trends in personal income, savings and interest rates. If
economic indicators point to a recession, marketers can take steps to redesign,
reposition, and re-price their products closely.
Life style:
It is a person’s pattern of living as expressed in his or her psychographics.
People coming from the same subculture, social class and occupation may have
quite different lifestyles. The life style concept can help the marketer understand
changing consumer values and how they affect buying behaviour.

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Personality and self-concept:
Each person’s distinct personality influences his or her buying behaviour.
Personality refers to the unique psychological characteristics that lead to
relatively consistent and lasting responses to one’s own environment.
Personality is usually described in terms of traits such as self defence,
dominance, sociability, autonomy, defensiveness, adaptability, and
aggressiveness. Personality can be useful in analysing consumer behaviour for
certain product or brand choice.
Many marketers use a concept related to personality-a person’s self-concept
(self image) the basic self-concept premise is that people’s possessions
contribute to and reflect their identities.
4.Psychological factors
A person’s buying choices are further influenced by four major psychological
factors: motivation, perception, learning and beliefs and attitude.
 Motives--
A motive is an internal energizing force that orients a person's activities
toward satisfying a need or achieving a goal.
Actions are effected by a set of motives, not just one. If marketers can
identify motives then they can better develop a marketing mix.
MASLOW hierarchy of needs
o Physiological
o Safety
o Love and Belonging
o Esteem
o Self Actualization

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Need to determine what level of the hierarchy the consumers are at to
determine what motivates their purchases.
 Perception--
What do you see? Perception is the process of selecting, organizing and
interpreting information inputs to produce meaning. For example, we
chose what information we pay attention to, organize it and interpret it.
Information inputs are the sensations received through sight, taste,
hearing, smell and touch.
Selective Exposure-select inputs to be exposed to our awareness. More
likely if it is linked to an event, satisfies current needs, intensity of input
changes (sharp price drop).
Selective Distortion-Changing/twisting current received information,
inconsistent with beliefs.
Advertisers that use comparative advertisements (pitching one product
against another), have to be very careful that consumers do not distort the
facts and perceive that the advertisement was for the competitor.
Selective Retention-Remember inputs that support beliefs, forgets those
that don't.
Average supermarket shopper is exposed to 17,000 products in a
shopping visit lasting 30 minutes-60% of purchases are unplanned.
Exposed to 1,500 advertisement per day. Can't be expected to be aware of
all these inputs, and certainly will not retain many.
Interpreting information is based on what is already familiar, on
knowledge that is stored in the memory.

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 Learning-(Ability and Knowledge)
Need to understand individual’s capacity to learn. Learning, changes in a
person's behaviour caused by information and experience. Therefore to
change consumers' behaviour about your product, need to give them new
information.
When making buying decisions, buyers must process information.
Knowledge is the familiarity with the product and expertise.
Inexperience buyers often use prices as an indicator of quality more than
those who have knowledge of a product.
Non-alcoholic Beer example: consumers chose the most expensive six-
pack, because they assume that the greater price indicates greater quality.
Learning is the process through which a relatively permanent change in
behaviour results from the consequences of past behaviour. Learning
describes changes in an individual’s behaviour arising from experience.
 Attitudes and beliefs
A belief is a descriptive thought that a person has about something.
Marketers are interested in the beliefs that people formulate about
specific products and services, because these beliefs make up product and
brand images that affect buying behaviour. If some beliefs are wrong and
prevent purchase, the marketer will want to launch a campaign to correct
them.
Attitude describes a person’s relatively consistent evaluations, feelings,
and tendencies towards an object or idea. Attitude put people into a frame
of mind of liking or disliking things, of moving towards or away from
them.

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Knowledge and positive and negative feelings about an object or activity-
maybe tangible or intangible, living or non- living.
Individual learns attitudes through experience and interaction with other
people. Consumer attitudes toward a firm and its products greatly
influence the success or failure of the firm's marketing strategy.
Attitudes and attitude change are influenced by consumers’ personality
and lifestyle. Consumers screen information that conflicts with their
attitudes. Distort information to make it consistent and selectively retain
information that reinforces our attitudes. IE brand loyalty.