Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Consumer behavior


Published on

Published in: Technology, Business
  • Be the first to like this

Consumer behavior

  1. 1. 1. It might sound strange, but some of the best business folks who I have met know very little about marketing and advertising. They simply have a knack for making the products that people need. Some of them are actually pretty un-savvy as consumers themselves, yet somehow get by on instinct and intellect. The one exception, however, is consumer behaviour. On some level everyone needs to understand if he want to be able to make and sell the products that consumers want. You really do not need to know how to launch a marketing campaign, how to create an image, how to spread word-of-mouth information about your product, or how to spin doctor. You can hire people to do all of those things for you. But if you do not know how people make basic buying and selling decisions in their lives, you simply won't ever understand what will sell. Such fundamentals as brand loyalty, brand identity, and niche marketing are firmly grounded in consumer behaviour. You can learn a lot of it just by taking some sociology classes, or even by watching your own family shopping. My first introduction to consumer behaviour was not through any organized business program, but through going to the grocery store with my mom while growing up. It was interesting to see what brands she bought. There were a lot of companies that she trusted just because she had always used, but occasionally things would change. My mom was very easily swayed by things claiming to have increased health benefits. A new product which was supposedly super fortified would always sway her away from an old, trusted brand – even one she had been with forever. Like most consumers, my mom assumed that she was motivated purely by rational concerns. In her case, she wanted to give her family the healthiest food possible on her budget. Like most people, however, once companies profiled her consumer behaviour, they could sell their products to her. There are certain keywords that triggered consumer buying decisions, certain qualities she was looking for in the food, and even certain fonts, graphics, and colors that she associated with good, wholesome food. The consumer behavior researchers had more of an understanding of what people like my mom liked than I could possibly have guessed at the time. Still, even at such a young age, I already understood the basics of consumer market research. 2. The Consumer Market comprises all individuals and households who buy or acquire goods and services for personal consumption - for themselves, family, guests, relatives, friends. Consumer Buying Behaviour refers to the buying behaviour of final consumers (individuals & households) who buy goods and services for personal consumption. We need to understand consumer behaviour to answer the question: "How do consumers respond to marketing efforts the company might use?" The buying Decision Process consists of five steps: Recognition of Need, Information Search, Evaluation of Alternatives, Purchase Decision and Post-Purchase Behaviour / Evaluation. Factors Influencing Consumer Behaviour Personal Factors Age Life cycle stage Occupation Economic situation Personality & Self Concept Life style identification
  2. 2. Psychological Factors Motivation: a need becomes a motive when it is strong enough to propel us to act, to seek satisfaction Perception: process by which we select, organize and interpret information to form a picture of the world Learning: changes in behaviour arising from experience Beliefs: a descriptive thought about something Attitudes: consistent / enduring favourable / unfavourable evaluations, feelings, and tendencies towards something Freud's Theory: A motive (or drive) is a need that is sufficiently pressing to direct the person to seek satisfaction. Sigmund Freud assumed people are largely unconscious about the real psychological forces shaping their behaviour... He saw the person as growing up and repressing many urges - these are never eliminated or under perfect control - they emerge in dreams, in slips of the tongue, in neurotic and obsessive behaviour or ultimat ely in psychoses. Freud suggested that a person does not fully understand his or her motivation. Frederick Herzberg's two factor theory of satisfiers and dissatisfiers states that the absence of dissatisfiers is not enough - satisfiers must also be present for products to be purchased. In other words, marketers should do their best to avoid dissatisfiers, while identifying major satisfiers or motivators and providing them. Social Factors Family is the most important consumer buying unit in any society or market... family members being the most important / influential primary reference group. Family of orientation: parents, siblings - strong influence on consumption habits that last a lifetime. Family of procreation: spouse, children - where there are issues of dominance and influence in decision including purchase and consumption. Reference Groups are groups with whom a person associates and who influence the person's attitudes, values, behaviour, consumption habits... Membership group are those that have a direct influence. Primary group: continuous, informal interaction - family, friends, neighbours, colleagues Secondary group: religious, professional, trade union... Aspirational group: those a person hopes to join Dissociative group: those whose values or behaviour a person rejects Social Roles & Status: A role consists of activities a person is expected to perform in society. Each role carries a status. People select products & brands that reflect their role and actual / desired status in society. Marketers need to be aware of the status symbol potential of products & brands. Article Source: 3. Introduction Consumer behaviour Consumer behaviour is concerned about studying how people purchase, what they purchase, when they purchase and why they purchase. It blends aspects from psychology,
  3. 3. sociology, economics, anthropology and socio-psychology. It tries to comprehend the purchaser decision making process, equally as an individual and also as a group. Consumer behaviour studies features of individual consumers for example demographics, behavioural variables and psychographics in an attempt to comprehend people's needs. It also attempts to analyse influences on the buyer from groups for instance family, friends, relatives, reference groups, and the society in general. Schiffman (1993) clearly defines consumer behaviour as the process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires. stageBrief descriptionRelevant inner psychological process Problem recognitionThe consumer perceives a requirement and becomes motivated to solve a problemMotivation Information searchThe consumer look for information required for making a purchase decisionPerception Alternative evaluationThe consumer compares a range of brands and productsAttitude formation Purchase decisionThe consumer decides the brand to buyIntegration Post-purchase evaluationThe consumer evaluates their buying decision Learning This research paper examines why consumers buy product for consumption, the paper will examine the main process both internal and external that a consumers undergoes before making the final decision of buying a product. In addition the paper will also outline the basic reasons that lead to consumer making their purchase, and also look at factors and groups that influence consumer decisions when purchasing finally it will review possible marketing strategy for a marketing to employ and make a conclusion on the basis of the whole study. Problem recognition Problem recognition comes as a result of when there is a disparity between an individual's desired status and an individual's actual status. Consumers are then motivated to deal with this difference and consequently they start the buying procedure. Starting places of problem recognition consist of: An item is exhausted Dissatisfaction with an existing product or service Consumer wants and needs Associated products/purchases Marketer-induced New products Motivation is the related inner psychological process which is connected with consumer problem recognition. A motive is a reason that induces action. Schiffman (1993) give a clarification of motivation on the basis of Maslow's hierarchy of needs. (Loudon, 1988) Information Search The moment a consumer has recognised the problem, a consumer may look for information regarding products and services which can solve the problem. Schiffman (1993) elucidate that consumers embark on both inner (memory) and also an external exploration. Information sources include: 1.Personal sources 2.Commercial sources 3.Public sources 4.Personal experience Perception is the relevant inner psychological process which is linked with information
  4. 4. search. Perception can be described as 'the process in which a person receives, selects, put in order, and interprets the information to generate a meaningful image of an aspect. (Loudon, 1988) In the process of selective perception during the stage of description selective disclosure consumers choose the promotional messages that they will have to expose themselves to. Selective interest consumers choose which kind of promotional messages they will pay notice to. While, selective comprehension buyers interpret messages in according to their beliefs, attitudes, experiences and motives. Lastly, selective retention buyers remember messages which are more significant or meaningful to them. (Loudon, 1988) A company will have to think about the implications of this progression to develop an effective promotional approach. First and foremost, know the sources of information which are more efficient for the brand or a product and secondly, what sort of communication and media strategy that will increase the probability that consumers get exposed to our company message, that the consumer will pay attention to the message, that consumer will comprehend the message, and recall our message. (Loudon, 1988) Alternative evaluation At this moment the consumer contrasts the brands and also products which are in consumers evoked set. The significant point is how the marketing organisation can increase the possibility of their brand to ensure is component of the consumer's evoked (deliberation) set? Consumers assess alternatives in accordance to the functional and also psychological advantages that they provide. The marketing organisation should understand what advantages consumers are looking and thus which aspects are most vital in terms of decision making. (Grunert, 1988) The relevant inner psychological process which is related with the alternative assessment phase is formation of attitude Schiffman (1993) observers that attitudes are learned predispositions towards an item. Attitudes encompass both cognitive and also affective elements; that is what you think and how you feel about an object. The multi-attribute attitude concept elucidates how consumers assess alternatives on a variety of attributes. Schiffman (1993) identify several strategies which can be applied to influence the procedure (attitude modify strategies). Lastly, there is a number of ways in which consumers apply criterion in making decisions. Chisnall (1992) also explains that customers integrate information in different ways and make decisions including the use of heuristics. Thus marketing organisation ought to know how consumers assess alternatives on salient or vital attributes in making their buying decision. Purchase decision After the alternatives have been assessed, the consumer is now ready to make a buying decision. At times purchase intent does not lead in an actual purchasing. Marketing organizations have to facilitate a consumer to take action on their purchase intent. Providing credit or better payment terms might encourage the customer to make a purchase, or a sales promotion for instance the opportunity to be given a premium or entering a competition can provide an enticement to buy at that moment. Integration is the relevant inner psychological process which is linked with purchase decision. (Peter, Olson and Grunert, 1999) Post purchase evaluation After a consumer has made a purchase and has used the purchased product, he/she will evaluate his/her purchasing decision. The consumer compares the product's performance with his/her expectations. When the product purchased does not perform to the expectation
  5. 5. of the consumer he/she will experience post purchase discontent. When consumers buy high involvement products, which are more costly products for which consumers exert high purchasing efforts in terms of search and time, they generally experience a level of discomfort following the purchase. This is to say, they undergo some uncertainty that they undertook the right selection. This condition is termed as cognitive dissonance (thinking disharmony). Marketing organisations should think about the outcomes of post purchase behaviour. How they can minimise the possibility of post purchase discontent and/or cognitive dissonance. According to Peter, Olson and Grunert, (1999) Learning is the relevant inner psychological process which is related with post purchase assessment. Characteristics of consumer shopping behaviour Today, the market is being driven by consumers are more informed and have more money spend than previous. Customers currently are shopping for quality and luxuries so that they can enhance their quality of life. With improved purchasing power consumers are turning way from purchasing material things to experimental consumerism. Thus, customers will purchase a product because of one or more reasons underlined below. (Loudon, 1988) Experimenting marketing behaviour Currently the society has become more affluent, many consumers have got all the material products and goods they really need. Due to this many consumers who go to shop in the store are hardly ever motivated by the need to buy anything in the shop. On the contra, the consumers are purchasing products based on desire to have an experienc e with the product or a feeling of the product. (Loudon, 1988) Satisfy need and desire Consumers have different needs and desires that they wish to satisfy when buying a product. Many people have different anticipations and dreams when they buy a product. Thus, a person will buy a product so that the product can satisfy his/her needs and wants. However, the market offers a lot of different but similar products to the consumer who ends up not knowing exactly what is perfect for his/her specific needs, it is this availability of varieties that as seen many consumers buying products that at fail to satisfy their needs and desires. (Stern, & El-Ansary, 1992) Purchasing to acquire Basically, a person may want to acquire or own a product, thus some consumers buys products because their want to acquire and own a product. Many studies reveal that many people purchase products so that their can own them, this gives them a sense of power and achievement. Even though the product may not be that important or useful to the consumer but having it becomes a priority. (Stern, & El-Ansary, 1992) Factor that influence consumer buying Culture: Cultural aspect is the most basic determinant of an individuals needs and behaviour. While lower creatures are ruled by instinct, human behaviour is mostly learned. The kid growing up in a community leans a fundamental set of norms, values, perceptions, inclinations and behaviours through the process of socialization which involves the family and also other key institutions. Consequently a kid growing up for example in America is thus exposed to the values of Achievement and success, efficiency, activity and practicality, material comfort, progress, , individualism, freedom, humanitarianism, external comfort, and youthfulness. (Solomon M, et al, 2002) Social Class: Practically all human societies display social stratification; this sometimes takes the
  6. 6. structure of a caste system as in some Asian countries, where the member of diverse caste is nurtured for particular roles. More often, stratification takes the appearance of a social class. Social classes do have a number of characteristics. For example, individuals in each specific social class seem to behave more similar than individuals from two dissimilar social classes. Secondly, individuals are recognized as occupying superior or inferior positions in accordance with their social class. Thirdly, an individuals social class is specified by several variables, such as job occupation, income, affluence, level of education, value orientation, etc. Fourthly, persons are able to shift from one social group to another down or up during their life span. The degree of this mobility differs according to the inflexibility the social stratification any given society. (Schwartz, 2004) Social Factors: Consumers behaviours are also influenced through social factors, for instance consumers family, reference group and social functions and statuses. Reference Group: An individuals behaviour is powerfully influenced by numerous group .An individuals reference group are groups which have a direct or indirect influence on the individuals attitudes or behaviour Family Group: Members of the purchasers family can have a powerful influence on the purchasers behaviour. We can differentiate two families in the purchasers life. The orientation family consists of individuals parents. From parents individuals acquires orientation towards religious, economics and politics, and a sense of self worth. For the case of costly products and/ or services, husbands and wives get into a more mutual decision making. The underlined products and services are examples of mutual choices: Husband dominant: automobiles, life insurance, television Wife dominant: washing machines, kitchenware, carpeting, Equal: Housing, Living room furniture, vacation, outside entertainment. (Schwartz, 2004) Conclusion Consumer behaviour is basically concerned about studying how people purchase, what they purchase, when they purchase and why they purchase. People undergo five main stages before and after making a purchase these stages are important aspects for any organization to analyse and be able to successful attract consumers to their products and also satisfy their expectations. As Grunert (1988) points out it is clear that people will buy a product for various reasons such as to experiment, acquire or satisfy their needs or wants. When making such purchases a customer is highly influenced by his cultural aspects, class, and family and reference group. Thus it is important and vital that companies studies different aspects of consumer behaviour to formulate successful marketing strategies Read more: Behaviour/997433#ixzz12RtIjWsX Under Creative Commons License: Attribution No Derivatives