Buyer Behaviour and Consumerism
BUYER BEHAVIOUR
AND
CONSUMERISM
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Buyer Behaviour and Consumerism
Dominant Family Purchase - Cozenza 1985
PRODUCT
TYPICAL
DECISION
Women’s casual
clothing
Vacations
DOMINANT
DECISION
MAKER
Wife
Syncratic (both)
Whether to go, where
Men’s casual clothing
Husband
Type, price, style
Life insurance
Husband
Company, coverage
Homeowner’s
insurance
Household appliances
Husband
Company, coverage
Wife
Style, brand, price
Price, style
UK socioeconomic classification scheme
Class name
Social status
Occupation of head of
household
Higher managerial,
administrative or professional
% of
population
3
A
Upper middle
B
Middle
Intermediate managerial,
administrative or professional
14
C1
Lower middle
Supervisors or clerical, junior
managerial, administrative or
professional
Skilled manual workers
27
C2
Skilled working
25
D
Working
Semiskilled and unskilled
workers
19
E
Those at lowest levels of
subsistence
Pensioners, widows, casual or
lower-grade workers
12
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Buyer Behaviour and Consumerism
CONTENT
Chapter 1: Introduction to the Study of Consumer Behaviour:
 What is Consumer Behaviour?
 Why we study Consumer Behaviour
 Why the field of Consumer Behaviour developed
 The role of Consumer Behaviour
Chapter 2: Consumer Research
 The Consumer Research process
 Developing the research objectives
 Collecting Secondary Data
 Designing Primary Research
 Data Collection
 Analysis and Report Preparation
Chapter 3: Analytical Segmentation System for consumers
 Who uses market segmentation?
 How marketers use market segmentation
 Bases for market segmentation including, social class, social status,
Family, Company size, Product usage and Location.
 Implementing Segmentation Strategies.
Chapter 4: Consumer Needs and Motivation
 Motivation
 Needs
 Goals
 Positive and Negative Motivation
 Dynamic Nature of Motivation including Frustration and Arousal of
Motives.
 Types and Systems of Needs.
 Motivation Research
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Buyer Behaviour and Consumerism
Chapter 5: Personality and Consumer Behaviour:
 What is personality?
 Theories of Personality
 Personality and Understanding Consumer Diversity.
Chapter 6:
Consumer Perception:
 What is Perception?
 The dynamics of Perception
 Consumer Imagery
Chapter 7: Learning and Consumer Involvement
 What is Learning?
 Behavioural Learning Theories
 Cognitive Learning Theories
 Brand Loyalty and Brand Equity
Chapter 8: Nature of Consumer Attitudes:
 What are Attitudes?
 Structural Models of Attitudes
 Attitude Formation
 Attitude Change
Chapter 9:
Group Dynamics and Consumer Reference Groups:
 Types of Groups
 Reference Groups and their application
 What is a Family?
 Functions of the Family?
 Family Decision Making
 The Family Life Cycle.
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Buyer Behaviour and Consumerism
Chapter 10:
Social Class and Consumer Behaviour:
 What is Social Class?
 Measurement of Social Class
 Lifestyle profiles of the social class
 The Affluent Customer
 The Non-Affluent Customer.
Chapter 11: The Influence of Culture on Consumer Behaviour:
 What is Culture?
 Characteristics of Culture
 Measurement of Culture
 Core Values
 What is Sub-culture?
 Sub-cultural aspects of Consumer Behaviour
Chapter 12: Diffusion of Innovations
 The Diffusion process
 The Adoption process
 A profile of the customer innovator
Chapter 13: Consumer Decision Making:
 What is Decision Making?
 Four view of Consume Decision Making
 Models of Consumer Decision Making
 Opinion Leadership
 The interpersonal flow of communication
Reading List:
Main text: Consumer Behaviour by: Schffman and Leslie Lazar Kanuk (Prentice Hall)
Alternative Texts and Further Reading: Consumer Behaviour- Chris Rice
(Butterworth/Heinemann)
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Buyer Behaviour and Consumerism
CHAPTER SUMMARY
Chapter 1:
This chapter makes the reader to have an understanding of what consumer behaviour is.
It is very vital to know why we study consumer behaviour and how the field of consumer
behaviour developed. This chapter explores these areas. It gives a thorough grounding on
not just what consumer behaviour is, but the role it plays.
Chapter 2:
This chapter takes another perspective. It fully analyses consumer research, the research
process and why research is important. In order to know how consumers behave, it is
important to carry out consumer research. The reader will understand some of the
research techniques and methods used in carrying out consumer research.
Chapter 3:
In this chapter, the reader will understand what segmentation is, how consumer market
can be segmented and the importance of segmenting the consumer market. It is also
essential to analyse the bases of segmenting the market. These areas will be fully analysed.
Chapter 4:
Another dimension is seen here.
Chapter 5:
p
Chapter 6:
p
Chapter 7:
p
Chapter 8:
p
Chapter 9:
p
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Buyer Behaviour and Consumerism
Chapter 10:
p
Chapter 11:
p
Chapter 12:
p
Chapter 13:
p
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Buyer Behaviour and Consumerism
Chapter 1: Introd uction to the study
Of Consumer Behaviour :
Issues to look at:




What is Consumer Behaviour?
Why we study Consumer Behaviour
Why the field of Consumer Behaviour developed
The role of Consumer Behaviour
CHAPTER OBJECTIVES:
By the end of this chapter, you should be able to understand the following:
1.
2.
3.
4.
What consumer behaviour is
The reasons why we study consumer behaviour
Why the field of consumer behaviour developed
The role of consumer behaviour
THE DEFINITION AND SCOPE OF CONSUMER BEHAVIOUR
WHAT IS CONSUMER BEHAVIOUR?
Consumer behaviour is the behaviour that consumer display in searching for, purchasing, using,
evaluating and disposing products and services that they expect will satisfy their needs.
Consumer behaviour focuses on how individuals make decisions to spend their available
resources (time, money, effort) on consumption-related items. That includes what they buy,
why they buy it, when they buy it, where there buy it, how often they buy it, how often they use
it, how they evaluate it after the purchase and the impact of such evaluations on future
purchases, and how they dispose of it.
Consumer Behaviour is the study of how people buy, what they buy, when they buy and why
they buy. It is a subcategory of marketing that blends elements from psychology,
sociology,sociopsychology, anthropology and economics. It attempts to understand the buyer
decision making process, both individually and in groups. It studies characteristics of individual
consumers such as demographics, psychographics, and behavioural variables in an attempt to
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Buyer Behaviour and Consumerism
understand people's wants. It also tries to assess influences on the consumer from groups such
as family, friends, reference groups, and society in general.
Consumer behaviour refers to the process that buyers go through when deciding whether or not
to purchase goods or services. Buying behaviour can be influenced by a variety of external
factors and motivations, including marketing activity.
An important part of the marketing process is to understand why a customer or buyer makes a
purchase.
Without such an understanding, businesses find it hard to respond to the customer’s needs and
wants.
Marketing theory traditionally splits analysis of buyer or customer behaviour into two broad
groups for analysis – Consumer Buyers and Industrial Buyers
Consumer buyers are those who purchase items for their personal consumption
Industrial buyers are those who purchase items on behalf of their business or organisation
Businesses now spend considerable sums trying to learn about what makes “customers tick”.
The questions they try to understand are:





Who buys?
How do they buy?
When do they buy?
Where do they buy?
Why do they buy?
For a marketing manager, the challenge is to understand how customers might respond to the
different elements of the marketing mix that are presented to them.
If management can understand these customer responses better than the competition, then it is a
potentially significant source of competitive advantage.
Consumer behaviour is concerned with?
 Why consumers make the purchases that they make?
 What factors influence consumer purchases?
 Why people behave as they do?
 What are the mental processes involved?
 Who buys?
 What are their choice criteria?
 When do they buy?
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Buyer Behaviour and Consumerism
 Where do they buy?
 How do they buy?
 Likely buyers reaction to a marketing strategy
The field of consumer behaviour is rooted in the marketing concept, a business orientation that
evolved in the 1950s through several alternatives approaches toward doing business referred to,
respectively, as the production concept, the product concept, and the selling concept.
WHY IS BUYER BEHAVIOUR IMPORTANT – WHY WE STUDY CONSUMER
BEHAVIOUR?
 The Marketing concept stresses that firms should create marketing mix that satisfies
customers.
 Therefore firms needs to analyse what, where, when, why, and how customers buy.
 Understanding consumer behaviour is essential to the development of marketing
strategies- especially product, price, product, design, segmentation, targeting, positioning
and promotion.
 Understanding the way customers behave in very important for the short, medium and
long term survival of an organisation.
 To build a good relation with customers it is important to understand their behaviour. By
understanding customers’ behaviour, businesses can tailor products to satisfy customers.
 Buyer behaviour makes businesses to be able to plan and allocate resources in order to
satisfy the needs and wants of customers.
 Businesses that understand buyer behaviour and adapt its business to satisfy those needs
and wants of customers will be able to have a greater competitive advantage.
 Lack of understanding of buyer behaviour can seriously jeopardize business performance.
 Buyer behaviour is paramount in business strategic direction.
 To be more competitive, and to win the hearts and minds of customers more than other
competitors, it is crucial for businesses to understand the way buyers behave and try to
satisfy the buyers.
 A lack of understanding of buyer behaviour is detrimental to business survival and this
can lead to business failure.
 We study consumer behaviour in order to sought out what customers actually need and
want.
 Businesses want to satisfy customers profitably and efficiently that is why they have to
study consumer behaviour
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Buyer Behaviour and Consumerism
 The survival of the business is partly in the hands of customers. The more demand, the
more the business can realise an increase in profit and the lower the demand the lower the
profit. Thus businesses are able to make profit because there are people available to buy.
If there are no customers businesses will not survive. Therefore to continue to survive
and make more profit, there need to understand the behaviour of those that makes them to
exist and make some profit (customers).
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Buyer Behaviour and Consumerism
WHY THE FIELD OF CONSUMER
BEHAVIOUR DEVELOPED?
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Buyer Behaviour and Consumerism
THE ROLE OF CONSUMER
B E H AV I O U R
1. Consumer behaviour helps businesses to understand customers.
2. It makes business to better satisfy customers by not only
understanding their needs but responding to these needs.
3. A marketing oriented business needs to study consumer
behaviour to efficiently and profitably satisfy customers ne eds
and wants.
4. Consumer behaviour helps the business to position its market.
5. Customers are very important stakeholders, just like
shareholders, government, staff, etc. The business is existing
and making money because they are people who purchase the
products. Therefore consumer behaviour helps businesses to
carry out further improvements in their products aimed at
satisfying customers.
6. Consumer behaviour has led to more innovation and the research
and development of new technology.
7. The study of consumer b ehaviour helps business to be able to
respond quickly to customers changing fashion.
SUMMARY
DISCUSSSION QUESTIONS
EXERCISES
KEY TERMS
REFERENCES
ASSIGNMENT
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Buyer Behaviour and Consumerism
CHAPTER 2:
Issues to look at:






CONSUMER RESEARCH
The Consumer Research process
Developing the research objectives
Collecting Secondary Data
Designing Primary Research
Data Collection
Analysis and Report Preparation
CHAPTER OBJECTIVE
By the end of this chapter, you should be able to understand the following:
1.
2.
3.
4.
5.
What is consumer research
The consumer research process
Consumer research methodologies
Techniques of collecting primary and secondary information
How to develop research objectives
INTRODUCTION TO CONSUMER RESEARCH
Consumer research is the gathering, recording, analysing, re porting
and usage of information about consumers such as age, income,
gender, marital status, shopping habits, etc in order to help
businesses to make important decisions.
T
he field of consumer research developed as an extension of the field of marketing
research. Just as the findings of marketing research were used to improve managerial
decision making, so too were the findings of consumer research. Studying consumer
behaviour enables marketers to predict how consumers will react to promotional messages and
to understand why they make the purchase decisions they do. Marketers realize that if they
know more about the consumer decision-making process, they can design marketing strategies
and promotional messages that will influence consumers more effectively. Recently marketers
began to realize that customer research is a unique subset t of marketing research, which merits
the utilization of specialized research methods that collect customer data and also enhance the
company’s relationship with its customers.
Consumer research is very important for businesses. Business that are marketing oriented, carry
out customer research in order to find out about the following
 Demographic issues such as age, gender, marital status, income, occupation
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Buyer Behaviour and Consumerism
 Shopping Habits e.g. when they shop, where they shop, how they shop, how much they
spend when shopping, what they frequently buy, who makes the purchase decision, etc
 Perception about products
 Interests and motivations
 Psychology
 Motivations
 Needs and wants
 Buying behaviour and influencing factors
 Likes and dislikes about products
 Opinions and views about the company’s marketing mix: product, price, place,
promotion, people, physical evidence and process.
etc.
THE ROLE OF CONSUMER RESEARCH
 Consumer research is very important because it helps businesses to get information about
customers.
 Without researching about consumer buying behaviour, businesses will find it difficult to
understand consumers.
 It helps businesses in formulating marketing strategies.
THE CONSUMER RESEARCH PROCESS
The major steps in the consumer research process include:
Defining the objectives of the research
Collecting and evaluating secondary data
Designing a primary research study
Collecting primary data
Analysing the data
6. Preparing a report on the findings.
1.
2.
3.
4.
5.
COLLECTING SECONDARY DATA
Sources of secondary data
 Print Media (Newspapers, magazines, yellow pages, leaflets).
 Television
 Radio
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Buyer Behaviour and Consumerism







Internet
Company’s Internal Record
Other companies
Government archives
Suppliers & distributors
Internal and external databases
Library
DESIGNING PRIMARY RESEARCH
Types of primary research:
1.
2.
Qualitative
Quantitative
Sources of primary research:









Interviews
Group discussions
Test marketing
Hall testing
Sampling
Questionnaire
Observation
Experimentation
Surveys.
SAMPLING AND DATA COLLECTION
Sampling
PROBABILITY SAMPLE
f
Simple random sample
Systematic random sample
Stratified random sample
Cluster (area sample)
NON PROBABILITY SAMPLE
Convenience sample
Judgment sample
Quota sample
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Buyer Behaviour and Consumerism
Data Analysis and Reporting Research Findings:
CONDUCTING A RESEARCH STRATEGY:
SUMMARY
DISCUSSSION QUESTIONS
EXERCISES
KEY TERMS
REFERENCES
ASSIGNMENT 2:
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Buyer Behaviour and Consumerism
C H A P T E R 3 : ANALYTICAL SEGMENTATION SYSTEM FOR
CONSUMERS
Issues to look at:
 Who uses market segmentation?
 How marketers use market segmentation
 Bases for market segmentation including, social class, social status,
Family, Company size, Product usage and Location.
 Implementing Segmentation Strategies.
CHAPTER OBJECTIVE
By the end of this chapter you should be able to understand the following
1.
2.
3.
4.
5.
The meaning of market segmentation
How the market can be segmented (bases for segmenting the market)
Criteria for segmenting the market
The reasons why businesses segment the market
How marketers use market segmentation.
SEGMENTATION, TARGETING AND POSITIONING
The focus of the marketing concept is consumer needs. At the same time, recognizing the
high degree of diversity among us, consumer researchers seek to identify the many
similarities –or constants-that exist among the peoples of the world. For example, we all
have the same kind of biological needs, no matter where we are born- the needs for food,
nourishment, water, air, and for shelter from the elements. We also acquire needs after we
are born. These needs are shaped by the environment and the culture in which we live, by
our education, and by our experiences. The interesting thing about acquired needs is that
there are usually many people who develop the same needs. This commonality of need or
interest constitutes a market segment, which enabling the marketer to target consumers
with specifically designed products and/or promotional appeals that satisfy the needs of
that segment. The marketer must also adapt the image of its products ( i.e.,’ position’ it),
so that each market segment perceives the product as better fulfilling its specific needs
than competitive products. The three elements of this strategic framework are market
segmentation, targeting and positioning:
Market segmentation is the process of dividing a market into subsets of consumers with
common needs or characteristics. Because most companies have limited resources, few
companies can pursue all of the market segments identified.
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Buyer Behaviour and Consumerism
Bases for market segmentation and their variables:
 Demographic Segmentation: according to age, gender, income, occupation, culture,
marital status, life cycle etc.
 Geographic Segmentation: according to regions, towns, cities, villages, counties,
density, climate etc.
 Psychographic Segmentation: according to social class, perception, etc
 Behaviour Segmentation: according to usage rate, usage status, benefit sought, usage
occasion, awareness state etc
 Geodemographic Segmentation: according to geography and demography
 Socio-economic Segmentation: according to social class, income & occupation.
Market Segmentation
nt 1
me
Seg
Seg
Se
Male
Female
(6-18years)
(0-5years)
t3
en
gm
Se
gm
en
t8
Female
(19-45years)
men
t2
nt
me
Seg
Female
(0-5years)
7
Male
(66+)
Seg
Male
(19-45 years)
Male
(45-65years)
Segm
ent 4
Male
( 6-18years)
men
t6
ent 5
Segm
The reasons why businesses segment their market:
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Buyer Behaviour and Consumerism
 To profit from a Niche Market (small section of the market which competitors
are not yet focused on and which the business has greater competitive advantage
over its competitors).
 To take advantage of opportunities
 Because of the differences in the market in terms of age, gender, marital status,
income & occupation.
 Businesses want to avoid risk: that is why some businesses focus just on a
segment to avoid going in for the entire market which may be risky to some
extend.
 Inadequate resources to go in for the entire market.
 The business may be a small scale one and it will want to avoid problems related
with targeting larger markets.
 Some businesses segment the market because they want to identify individual
needs in order to tailor products that satisfy the needs and wants of customers
 Businesses want to be market oriented – they want to satisfy customers as much
as possible.
 Some businesses segment the market because they want to concentrate on one or
two segments and offer just the best products.
Market segmentation
Segment 1
Upper class
High income
Segment 1
Regions
(West Midlands)
Segment 2
Africa
Segment 2
Middle class
Moderate income
Cities
Segment 1
Married
Segment 2
Single
London
Segment 3
Lower class
Low income
Segment 3
Towns
Dudley
Segment 3
Dependent
Market targeting is selecting one or more of the segments identified. Market targeting is
selecting is selecting one or more of the segments identified for the company to pursue.
The criteria for selecting the target market are
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Buyer Behaviour and Consumerism
1. Identifiable
2. Profitable
3. Measurable
4. Affordable
5. Accessible
6. Recognisable
7. Substantial
8. Differentiable
9. Stable/reliable
10.Actionable
Positioning is developing a distinct image for the product or service in the mind of the
consumer, an image that will differentiate the offering from competing ones and squarely
communicate to consumers that the particular product or service will fulfil their needs better
than competing brands. Successful positioning centres around two key principles: first,
communicating the benefits that the product will provide rather than the product’s features.
THE MARKETING MIX
The marketing mix consists of a company’s 7p’s namely;
 Product
 Price
 Place
 Promotion
 People
 Physical evidence
 Processes.
SUMMARY
DISCUSSSION QUESTIONS
EXERCISES
KEY TERMS
REFERENCES
C H A P T E R 4 : Co n su m e r Needs and Motivation
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Buyer Behaviour and Consumerism
Issues to look at:





Motivation
Needs
Goals
Positive and Negative Motivation
Dynamic Nature of Motivation including Frustration and Arousal of
Motives.
 Types and Systems of Needs.
 Motivation Research
CHAPTER OBJECTIVES
By the end of this chapter, you should be able to understand the
following:
1.
2.
3.
4.
The meaning of Motivation
Consumer needs and motivation
The difference between positive and negative motivation
The dynamic nature of motivation including Frustration and
Arousal of Motives
5. The types and systems of needs
6. Motivation research
CHAPTER 5:
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Buyer Behaviour and Consumerism
Issues to look at:
 What is personality?
 Theories of Personality
 Personality and Understanding Consumer Diversity.
CHAPTER OBJECTIVES
By the end of this chapter, you should be able to understand the following:
1. What is personality
2. The theories of personality
3. Consumer Diversity.
CHAPTER 6: CONSUMER PERCEPTION
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Buyer Behaviour and Consumerism
 What is Perception?
 The dynamics of Perception
 Consumer Imagery
CHAPTER OBJECTIVES
By the end of this chapter, you should be able to understand the following:
1. The meaning of perception
2. The dynamics of perception
CHAPTER 7: LEARNING AND CONSUMER
I N VO LV E M E N T
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Buyer Behaviour and Consumerism
Issues to look at:




What is Learning?
Behavioural Learning Theories
Cognitive Learning Theories
Brand Loyalty and Brand Equity
CHAPTER OBJECTIVES
By the end of this chapter, you should be able to understand the following:
1.
2.
3.
4.
What is learning
The behavioural learning theories
The cognitive learning theories
Brand loyalty and Brand Equity.
C H A P T E R 8 : NATURE OF CONSUMER ATTITUDES:
Issues to look at:
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Buyer Behaviour and Consumerism




What are Attitudes?
Structural Models of Attitudes
Attitude Formation
Attitude Change
CHAPTER OBJECTIVES:
By the end of this chapter, you should be able to understand the
following:
1.
2.
3.
4.
The meaning of attitude
The structural Models of Attitudes
Attitude Formation
Attitude Change.
CHAPTER 9:
GROUP DYNAMICS AND CONSUMER REFERENCE GROUPS:
Issues to look at:
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Buyer Behaviour and Consumerism






Types of Groups
Reference Groups and their application
What is a Family?
Functions of the Family?
Family Decision Making
The Family Life Cycle.
CHAPTER OBJECTIVES
By the end of this chapter, you should be able to understand the
following:
1.
2.
3.
4.
5.
6.
How reference groups influence consumer spending
Who make up the reference group
What is a reference group
The family life cycle
What is a Family
The functions of a Family
CHAPTER 10:
SOCIAL CLASS AND CONSUMER BEHAVIOUR:
Issues to look at:
 What is Social Class?
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Buyer Behaviour and Consumerism




Measurement of Social Class
Lifestyle profiles of the social class
The Affluent Customer
The Non-Affluent Customer.
CHAPTER OBJECTIVES
By the end of this chapter, you should be able to understand the following:
1. What is social class
2. How social class influences consumer behaviour.
CHAPTER 11: THE INFLUENCE OF CULTURE ON CONSUMER
BEHAVIOUR
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Buyer Behaviour and Consumerism
Issues to look at:






What is Culture?
Characteristics of Culture
Measurement of Culture
Core Values
What is Sub-culture?
Sub-cultural aspects of Consumer Behaviour
CHAPTER OBJECTIVES
By the end of this chapter, you should be able to understand the following:
1. What is culture
2. The characteristics of culture
3. How culture influences consumer behaviour.
B u y e r b e ha v io u r – cu l t u ra l fa c t o r s
Cultural factors have a significant impact on customer behaviour.
Culture is the most basic cause of a person’s wants and behaviour. Growing up, children learn
basic values, perception and wants from the family and other important groups.
Marketing are always trying to spot “cultural shifts” which might point to new products that
might be wanted by customers or to increased demand. For example, the cultural shift towards
greater concern about health and fitness has created opportunities (and now industries) servicing
customers who wish to buy:




Low calorie foods
Health club memberships
Exercise equipment
Activity or health-related holidays etc
Similarly the increased desire for “leisure time” has resulted in increased demand for
convenience products and services such as microwave ovens, ready meals and direct marketing
service businesses such as telephone banking and insurance.
Each culture contains “sub-cultures” – groups of people with share values. Sub-cultures can
include nationalities, religions, racial groups, or groups of people sharing the same geographical
location. Sometimes a sub-culture will create a substantial and distinctive market segment of its
own.
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Buyer Behaviour and Consumerism
For example, the “youth culture” or “club culture” has quite distinct values and buying
characteristics from the much older “gray generation”
Similarly, differences in social class can create customer groups. In fact, the official six social
classes in the UK are widely used to profile and predict different customer behaviour. In the
UK’s socioeconomic classification scheme, social class is not just determined by income. It is
measured as a combination of occupation, income, education, wealth and other variables:
Class
name
Social Status
A
Upper middle
B
C1
C2
D
E
Occupational Head of Household
Higher managerial, administrative or
professional
Intermediate managerial, administrative or
Middle
professional
Superiors or clerical, junior managerial,
Lower middle
administrative or professional
Skilled working
Skilled manual workers
Working
Semi-skilled and un-skilled manual workers
Those at lowest level of State pensioners or widows, casual or
subsistence
lower-grade workers
CHAPTER 12:
% of UK
Population
3
14
27
25
19
12
DIFFUSION OF INNOVATIONS
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Buyer Behaviour and Consumerism
Issues to look at:
 The Diffusion process
 The Adoption process
 A profile of the customer innovator
CHAPTER OBJECTIVES
By the end of this chapter you should be able to understand the following:
1. The diffusion process
2. The Adoption process
THE ADOPTION PROCESS
The “innovators” (those who adopt new products first) are usually relatively young, lively,
intelligent, socially and geographically mobile. They are often of a high socioeconomic group
(“AB’s”). Conversely, the “laggards” (those who adopt last, if at all) tend to be older, less
intelligent, less well-off and lower on the socioeconomic scale.
It follows from the above model that when a business launches a new product or service, the
customers who buy first are likely to be significantly different from those who buy the product
much later. This needs to be borne in mind when developing the marketing mix.
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Buyer Behaviour and Consumerism
Buyer behaviour - social factors
Introduction
A customer’s buying behaviour is also influenced by social factors, such as the groups to which
the customer belongs and social status.
In a group, several individuals may interact to influence the purchase decision. The typical roles
in such a group decision can be summarised as follows:
Initiator
The person who first suggests or thinks of the idea of buying a particular product or service
Influencer
A person whose view or advice influences the buying decision
Decider
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Buyer Behaviour and Consumerism
The individual with the power and/or financial authority to make the ultimate choice regarding
which product to buy
Buyer
The person who concludes the transaction
User
The
person
(or
persons)
who
actually
use
the
product
or
service
The family unit is usually considered to be the most important “buying” organisation in society.
It has been researched extensively. Marketers are particularly interested in the roles and relative
influence of the husband, wife and children on the purchase of a large variety of products and
services.
There is evidence that the traditional husband-wife buying roles are changing. Almost
everywhere in the world, the wife is traditionally the main buyer for the family, especially in the
areas of food, household products and clothing. However, with increasing numbers of women in
full-time work and many men becoming “home workers” (or “telecommuting”) the traditional
roles are reversing.
The challenge for a marketer is to understand how this might affect demand for products and
services and how the promotional mix needs to be changed to attract male rather than female
buyers.
33
Buyer Behaviour and Consumerism
CHAPTER 13:
Issues to look at:





CONSUMER DECISION MAKING:
What is Decision Making?
Four view of Consume Decision Making
Models of Consumer Decision Making
Opinion Leadership
The interpersonal flow of communication
CHAPTER OBJECTIVES
By the end of this chapter, you should be able to understand the
following:
1.
2.
3.
4.
What is Decision Making?
The decision making process
Models of consumer behaviour
Four view of Consumer Decision Making
Buyer behaviour - decision-making Process
Buyer decision processes are the decision making processes undertaken by consumers in
regard to a potential market transaction before, during, and after the purchase of a product or
service.
More generally, decision making is the cognitive process of selecting a course of action from
among multiple alternatives. Common examples include shopping, deciding what to eat.
Decision making is said to be a psychological construct. This means that although we can never
"see" a decision, we can infer from observable behaviour that a decision has been made.
Therefore we conclude that a psychological event that we call "decision making" has occurred.
It is a construction that imputes commitment to action. That is, based on observable actions, we
assume that people have made a commitment to effect the action.
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Buyer Behaviour and Consumerism
How do customers buy?
Research suggests that customers go through a five-stage decision-making process in any
purchase.
This model is important for anyone making marketing decisions. It forces the marketer to
consider the whole buying process rather than just the purchase decision (when it may be too
late for a business to influence the choice!)
The model implies that customers pass through all stages in every purchase. However, in more
routine purchases, customers often skip or reverse some of the stages.
For example, a student buying a favourite hamburger would recognise the need (hunger) and go
right to the purchase decision, skipping information search and evaluation. However, the model
is very useful when it comes to understanding any purchase that requires some thought and
deliberation.
The buying process starts with need recognition. At this stage, the buyer recognises a problem
or need (e.g. I am hungry, we need a new sofa, I have a headache) or responds to a marketing
stimulus (e.g. you pass Starbucks and are attracted by the aroma of coffee and chocolate
muffins).
35
Buyer Behaviour and Consumerism
An “aroused” customer then needs to decide how much information (if any) is required. If the
need is strong and there is a product or service that meets the need close to hand, then a
purchase decision is likely to be made there and then. If not, then the process of information
search begins.
A customer can obtain information from several sources:
•Personal
sources:
family,
friends,
neighbours
etc
• Commercial sources: advertising; salespeople; retailers; dealers; packaging; point-of-sale
displays
• Public sources: newspapers, radio, television, consumer organisations; specialist magazines
• Experiential sources: handling, examining, using the product
The usefulness and influence of these sources of information will vary by product and by
customer. Research suggests that customers’ value and respect personal sources more than
commercial sources (the influence of “word of mouth”). The challenge for the marketing team
is to identify which information sources are most influential in their target markets.
In the evaluation stage, the customer must choose between the alternative brands, products and
services.
How does the customer use the information obtained?
An important determinant of the extent of evaluation is whether the customer feels “involved”
in the product. By involvement, we mean the degree of perceived relevance and personal
importance that accompanies the choice.
Where a purchase is “highly involving”, the customer is likely to carry out extensive evaluation.
High-involvement purchases include those involving high expenditure or personal risk – for
example buying a house, a car or making investments.
Low involvement purchases (e.g. buying a soft drink, choosing some breakfast cereals in the
supermarket) have very simple evaluation processes.
Why should a marketer need to understand the customer evaluation process?
The answer lies in the kind of information that the marketing team needs to provide customers
in different buying situations.
In high-involvement decisions, the marketer needs to provide a good deal of information about
the positive consequences of buying. The sales force may need to stress the important attributes
of the product, the advantages compared with the competition; and maybe even encourage
“trial” or “sampling” of the product in the hope of securing the sale.
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Buyer Behaviour and Consumerism
Post-purchase evaluation - Cognitive Dissonance
The final stage is the post-purchase evaluation of the decision. It is common for customers to
experience concerns after making a purchase decision. This arises from a concept that is known
as “cognitive dissonance”. The customer, having bought a product, may feel that an alternative
would have been preferable. In these circumstances that customer will not repurchase
immediately, but is likely to switch brands next time.
To manage the post-purchase stage, it is the job of the marketing team to persuade the potential
customer that the product will satisfy his or her needs. Then after having made a purchase, the
customer should be encouraged that he or she has made the right decision.
37
Buyer Behaviour and Consumerism
Bu y e r b e h av i o u r - n ew p ro d u c ts
Customer buying process for new products
How do customers approach the process of buying a new product? How does this differ from
the process for buying a product which the customer has bought before? What is meant by a
“new product”?
A new product can be defined as:
"A good, service or idea that is “perceived” by some potential customers as new. It may have
been available for some time, but many potential customers have not yet adopted the product
nor decided to become a regular user of the product"
Research suggests that customers go through five stages in the process of adopting a new
product or service: these are summarised below:
(1) Awareness - the customer becomes aware of the new product, but lacks information about it
(2) Interest - the customer seeks information about the new product
(3) Evaluation - the customer considers whether trying the new product makes sense
(4) Trial - the customer tries the new product on a limited or small scale to assess the value of
the product
(5) Adoption - the customer decides to make full and/or regular use of the new product
What is the role of marketing in the process of new-product adoption?
A marketing team looking to successfully introduce a new product or service should think about
how to help customers move through the five stages.
For example, what kind of advertising or other promotional campaign can be employed to build
customer awareness? If customers show a desire to trial or sample a product, how can this be
arranged effectively?
Research also suggests that customers can be divided into groups according to the speed with
which they adopt new products.
Rogers, in his influential work on the diffusion of innovations, suggested the following
classification:
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Buyer Behaviour and Consumerism
The “innovators” (those who adopt new products first) are usually relatively young, lively,
intelligent, socially and geographically mobile. They are often of a high socioeconomic group
(“AB’s”). Conversely, the “laggards” (those who adopt last, if at all) tend to be older, less
intelligent, less well-off and lower on the socioeconomic scale.
It follows from the above model that when a business launches a new product or service, the
customers who buy first are likely to be significantly different from those who buy the product
much later. This needs to be borne in mind when developing the marketing mix.
39
Buyer Behaviour and Consumerism
Buyer behaviour - social factors
Introduction
A customer’s buying behaviour is also influenced by social factors, such as the groups to which
the customer belongs and social status.
In a group, several individuals may interact to influence the purchase decision. The typical roles
in such a group decision can be summarised as follows:
Initiator
The person who first suggests or thinks of the idea of buying a particular product or service
Influencer
A person whose view or advice influences the buying decision
Decider
The individual with the power and/or financial authority to make the ultimate choice regarding
which product to buy
Buyer
The person who concludes the transaction
User
The
person
(or
persons)
who
actually
use
the
product
or
service
The family unit is usually considered to be the most important “buying” organisation in society.
It has been researched extensively. Marketers are particularly interested in the roles and relative
influence of the husband, wife and children on the purchase of a large variety of products and
services.
There is evidence that the traditional husband-wife buying roles are changing. Almost
everywhere in the world, the wife is traditionally the main buyer for the family, especially in the
areas of food, household products and clothing. However, with increasing numbers of women in
full-time work and many men becoming “home workers” (or “telecommuting”) the traditional
roles are reversing.
40
Buyer Behaviour and Consumerism
The challenge for a marketer is to understand how this might affect demand for products and
services and how the promotional mix needs to be changed to attract male rather than female
buyers.
41
Buyer Behaviour and Consumerism
Buyer behaviour - stimulus-response model
Introduction
A well-developed and tested model of buyer behaviour is known as the stimulus-response
model,
which
is
summarised
in
the
diagram
below:
In the above model, marketing and other stimuli enter the customers “black box” and produce
certain responses.
Marketing management must try to work out what goes on the in the mind of the customer – the
“black box”.
The Buyer’s characteristics influence how he or she perceives the stimuli; the decision-making
process determines what buying behaviour is undertaken.
Characteristics that affect customer behaviour
The first stage of understanding buyer behaviour is to focus on the factors that determine the
“buyer characteristics” in the “black box”. These can be summarised as follows:
42
Buyer Behaviour and Consumerism
43
Buyer Behaviour and Consumerism
CASE STUDY I
Buyer behaviour - case study: influence of children on buyer
behaviour
Research suggests that children are exerting more influence over family buying decisions.
What are the implications of this for retailers, brands and marketers?
Children are an important part of the family buying process. But what roles do they play?
Marketing theory suggests five main roles in a family buying process:
-Initiator
-Influencer
-Decider
-Buyer
- User
Which roles do children play in addition to the obvious one – “the user”
Children certainly influence family buying decisions from cars to holidays. They are also
the buyers of the future. Provide children with Penguin bars and McVitie's may be able to
hold on to the adult due to brand awareness and brand loyalty formed at such an early
age.
But how should businesses market to children? Are there conflicts with being seen to
specifically target the child audience – can it alienate parents?
Products have to appeal to the conflicting agendas of child and parent, while fighting off
increasing competition. A marketer of children’s foods was recently quoted as follows:
"Ten years ago children wouldn't have given a damn about cheese. It used to be just
Dairylea, but now children's dairy products encompass everything from cheese to yogurts,
and fromage frais. Our brands also face more intense competition than ever and it's not just
from other chocolate biscuits - it's from products such as Dairylea Dunkers and Fruit
Winders. These things didn't exist before."
Marketers also have to recognise that children are moving into new markets. Children as
young as seven buy DVD's, and no teenage lifestyle is complete without a mobile phone.
This has a knock-on effect. For example, the money children spend on mobile phone cards
reduces the money they spend on snacks.
44
Buyer Behaviour and Consumerism
Marketers also need to be sensitive to the peculiarities of children-related markets. It may
be tempting to use a daring marketing campaign to make a product stand out. But a
poorly thought-through campaign could result in the product and/or brand being
attacked by ethical campaigners, outraged mothers, educationalists, health and safety
organisations and others.
A good example of how things can go wrong is Sunny Delight. Sunny Delight enjoyed
boom sales after its initial launch. However, the drink's popularity crashed when the
media realised that it was sold from chiller cabinets purely as a marketing ploy to make it
seem fresh and, therefore, healthy. The actual product formulation was far from healthy.
Retailers face a challenge to display products in a way that attracts children. Promotional
displays have to be able to handle child usage (or abuse) and capture a child’s imagination
and
attention.
Disney has a reputation as being particularly good at interactive promotional marketing.
Many children also prefer Woolworth's to supermarkets because of features such as pick
'n' mix sweets. The Early Learning Centre succeeds by creating a playground which
allows children to play with toys rather than leaving them wrapped in plastic.
45
Buyer Behaviour and Consumerism
FACTORS AFFECTING CONSUMER BEHAVIOUR
1. Demographic Factors
•
•
•
•
•
•
Age
Stage in family life cycle
Occupation
Economic circumstances
Lifestyle
social influence variables
• family background
• reference groups
• roles and status
2. Marketing Mix factors







Product
Price
Place
Promotion
People
Physical evidence
Processes
3. Personal factors
4. Psychographic factors
5. Environmental factors:
 Political
 Economic
 Social-cultural
 Technological
 Ecological
 Legal
46
Buyer Behaviour and Consumerism
47
Buyer Behaviour and Consumerism
DECEMBER 2005
BUYER BEHAVIOUR & CONSUMERISM
1.
Identify the key issues you would associate with EACH stage of the
adoption process.
[20]
2.
How can the study of models of consumer behaviour assist marketing
managers in the development of marketing plans of action?
[20]
3.
Discuss the advantages and limitations of TWO motivation research
techniques.
[20]
4.
Explain the major characteristics of trait personality theory and
summarise its importance in understanding human behaviour.
[20]
5.
What are the factors that will have a direct effect on the way
consumers perceive products and services?
[20]
6.
You have been asked to explain the factors that are likely to influence
the relationship between attitudes and behaviour. What information
would you include in your explanations?
[20]
7.
Write notes on THREE of the following:
a) Limited problem solving
b) Cognitive dissonance
c) Psychographic segmentation
d) Opinion leaders
8.
[20]
Explain TWO attitude measurement techniques that are widely used by
behavioural scientists.
[20]
48
Buyer Behaviour and Consumerism
JUNE 2005
BUYER BEHAVIOUR & CONSUMERISM
1.
What is the value of opinion leaders to marketing management? [20]
2.
Explain how Pavlov’s “classical conditioning” theory can be beneficial to
the marketing process.
[20]
3.
Discuss the main behavioural influences that could affect
organisational buying decisions.
4.
Examine Maslow’s classification of human needs and indicate how it
might be applied to the marketing of holidays.
[20]
5.
Summarise the benefits and limitations of the Howard-Sheth model of
buyer behaviour.
[20]
6.
Outline the value of cognitive dissonance to the marketing of
prestigious products and services.
[20]
7.
Write notes on THREE of the following:
a) Word association tests
b) Likert scale
c) Trait theory
d) Subliminal perception
[20]
8.
[20]
As a marketing manager, you are in the process of finalising the
positioning of a new product within the market place. How can
knowledge from behavioural sciences assist you?
[20]
49
Buyer Behaviour and Consumerism
SEPTEMBER 2005
BUYER BEHAVIOUR & CONSUMERISM
1.
Explain the theory of human motivation based on the notion of
hierarchy of human needs developed by Abraham Maslow.
[20]
2.
You have been asked to explain the following terms to a group of
marketing students:
a) Perceived Risk
[10]
b) Perceptual Mapping
[10]
What information would you include in your presentation?
3.
How can the principle of classical conditioning theory be utilised during
the development of marketing campaigns?
[20]
4.
Discuss the importance of using psychographic factors as a basis for
market segmentation.
[20]
5.
What are the key factors that govern attention and how can they be
used in the development of promotional campaigns?
[20]
6.
Outline TWO attitude quantification techniques and discuss the extent
to which they provide a satisfactory measurement of attitudes. [20]
7.
Write notes on THREE of the following:
a) Celebrity Testimonials
b) Membership Groups
c) Opinion Leaders
d) Cognitive Dissonance
8.
[20]
Show how the Howard-Sheth model of buyer behaviour can be used by
a commercial organisation.
[20]
50
Buyer Behaviour and Consumerism
JUNE 2006
BUYER BEHAVIOUR & CONSUMERISM
1.
Identify the main external factors that govern attention and explain
how they may be used in promotional campaigns.
[20]
2.
You have been asked to advise a group of students on the main
influences on consumer buying behaviour. What information would you
give them?
[20]
3.
Explain how the principles of classical conditioning theory can be
considered in the development of marketing programmes.
[20]
4.
Distinguish between reference groups and membership groups and
highlight their value in the development of a promotional campaign for
a new range of fast foods.
[20]
5.
Discuss the main factors that can influence the diffusion of
innovations.
[20]
6.
Explain the value of cognitive dissonance to marketing practitioners.
[20]
7.
Write notes on THREE of the following:
a) Opinion Leaders
b) Trait Personality Theory
c) Psychographics
d) Extensive Problem Solving
8.
[20]
What is the value of consumer behaviour models to the practice of
marketing?
[20]
51
Buyer Behaviour and Consumerism
52
Buyer Behaviour and Consumerism
MARCH 2006
PUBLIC RELATIONS
1.
Identify the roles assumed by Public Relations within the marketing
mix. [20]
2.
Discuss the benefits of effective Internal Public Relations activities to
the overall performance of commercial organisations.
[20]
3.
Explain why, in your opinion, marketing orientated organisations
should take their social responsibilities
seriously.
[20]
4.
What are the main benefits organisations could expect to derive from
effective lobbying?
[20]
5.
Identify the evaluation criteria that can be used in selecting an
external Public Relations consultant to advise
a company on their overall PR efforts.
[20]
Write notes on THREE of the following:
a) Press Conferences
b) Sponsorship
c) Press Releases
d) Brand Image
[20]
Identify the wide range of publics that a marketing orientated
company may wish to reach.
[20]
6.
7.
8.
Explain what you understand by the term Marketing Public
Relations (MPR) and summarise its importance during the launch of a
new product.
[20]
53
Buyer Behaviour and Consumerism
SEPTEMBER 2006
BUYER BEHAVIOUR & CONSUMERISM
1.
Summarise the value of Maslow’s classification of human needs to the
marketing of products and services.
[20]
2.
Discuss TWO personality theories and explain their practical value to
marketing.
[20]
3.
Identify the main advantages and limitations associated with TWO
motivation research techniques of your
choice.
[20]
4.
Explain what you understand by the term frustration and discuss the
main characteristics of frustrated
behaviour.
[20]
5.
You have been asked to explain the importance of classical
conditioning to a group of advertising students. What information
would you include in your explanations?
[20]
6.
Identify the stages of the adoption process and summarise the key
issues associated with EACH stage.
[20]
7.
Write notes on THREE of the following:
a) Membership Groups
b) Reference Groups
c) Psychographic Segmentation
d) Cognitive Dissonance
8.
[20]
Discuss the main factors that will affect the way humans perceive
things around them.
[20]
54
Buyer Behaviour and Consumerism
55