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Understanding Consumer Behaviour


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Understanding Consumer Behaviour

A tutorial brought to you my Elaborate Marketing to help you understand what motivates customers to buy products and services. It walks you through he consumer buying process, and explains the reasons why they made the decision to purchase the product or service.

Published in: Marketing
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Understanding Consumer Behaviour

  1. 1. Understanding Consumer Behaviour @letselaborate Online marketing tutorial
  2. 2. Human Motivation Maslow’sTheory of Human Motivation (1943) • Maslow believed people had a set of motivation systems from basic needs to self actualisation • According to this theory, everyone needs to go through all of the needs to reach self-actualisation, from the bottom to the top of the pyramid Maslow, 1943
  3. 3. Maslow’s theory of motivation Motivation Definition Product examples Physiological Biological & physiological needs Air, water, food, drink, shelter, sex, sleep, warmth Water, food, house, bed Functional/practical Safety needs Protection from the elements Security, stability Freedom from fear Helmet, house & health insurance, internet security Emotional/social/cultural Love & belongingness Friendship, intimacy, affection Love from work, friends, family, romantic relations Flowers, organ donorship, chocolates, cards, birthday presents Self-esteem/luxury Esteem needs Achievements, status, independence, self-respect from others Car, lottery, marathon Self actualisation Realising personal potential Self fulfilment Seeking personal growth University course, training
  4. 4. The Consumer Buying Process
  5. 5. Need/Problem recognition Step one: Need and problem recognition.This arises when the consumer recognises that there is a need for an item • Assortment depletion - when the stock of goods has been used up or worn out • Assortment extension - when there’s the need to add some new items
  6. 6. Information Search Step two: Information search. Once someone has become motivated to buy/need something they engage in two forms of information search: 1. Internal Search - remembering previous experiences and what they already know about the product/service 2. External Search - shopping around, reading literature, looking at advertisements and talking to friends
  7. 7. Identification and evaluation of alternatives Step three: identification and evaluation. After the information search the consumer will evaluate the alternatives they have open to them The consumer will use cut offs - which are the minimum and maximum acceptance values for the product Signals - price tags, brand names, price, etc
  8. 8. Purchase decision and post-purchase evaluation Step four: purchase. Next comes the actual purchase, where the consumer will pick an appropriate method of payment Step five: post-purchase evaluation. Post-purchase evaluation involves the consumer deciding on whether the purchase has been a success or not (Blythe, 2013) This involves comparing what the consumer was expecting to get and what they actually have Post-purchase dissonance - where the product has not lives up to expectations
  9. 9. The consumer decision making process
  10. 10. Influences on the decision making unit Reference Groups Personal Factors Psychological factors Social Factors Primary groups – people we most often see Secondary groups – people we see occasionally Situational factors – changes in circumstances e.g. pay rise Perception –The way people build up a view of the world Informational influence – the need to seek information from a group Aspirational groups – groups wish we belong Demographic factors – individual characteristics Motives – the internal force that encourages someone towards a particular course of action Normative compliance – pressure exerted on someone Dissociative groups – group an individual does not want to belong to Level of involvement – the degree of importance or that emotional attachment Attitude – cognition (conscious), affect (emotional attachment) and contagion (planned course of action) Value -expressive influence – need to physiologically associate with a particular group Automatic groups – belong to virtue e.g. age Formal/informal groups – membership based on friendship
  11. 11. Influences on the decision making process Cultural - subcultures, ethnicity, country and origin Social - social groups, family, virtual groups, Personal influences - personal values & ethics People and personalities who influence decisions
  12. 12. The decision making unit The decision making unit is a group of people who participate in or influence the purchase decision at any stage in the buying process (CIM, 2012) This may involve a number or roles: • Gatekeepers - controls the flow of information to the decision makers. Barrier to sales people • Influencers - Individuals who ‘have the ear’ of the decision makers • Users - who will actually use the product • Deciders - who will make the actual decision, usually the hardest to influence • Buyers - who will actually buy the product
  13. 13. B2B vs B2C buyer behaviour B2B B2C • Experts • Professional buyers • Well trained, rational decisions • Non-professional buyers • Knowledge gap • No formal training, emotional • Large quantities • Higher risk - more money • Smaller quantities • Sales people are important • Sales people less important • Group/multiple people in decision making process • Single decision maker
  14. 14. Summary • Maslow’sTheory of Human Motivation (1943) determines the set of motivation systems a consumer goes through • There are 5 key steps in the consumer decision making process 1. Need/problem recognition 2. Information search 3. Identification and evaluation of options and alternatives 4. Purchase decision 5. Post-purchase evaluation • When making the decision to buy a product/service personal, physiological and social factors play a key part. Reference groups can also have an impact on the decision. • The decision making unit consist of; gatekeepers, influencers, users, deciders and buyers. When marketing your product or service it is important to know which one of these you need to target.
  15. 15. @letselaborate