Consumer Market Behaviour

Chapter Objectives (1)

1. Name the elements in the stimulus-response model of consumer behaviour.

2. Outline the major characteristics affecting consumer behaviour, and list some of the specific psychological, personal, cultural and social factors that influence consumers.

3. Explain the buyer decision process and discuss need recognition, information search, evaluation of alternatives, the purchase decision and post-purchase behaviour.

Chapter Objectives (2)

4. Identify and define the consumer buying roles of initiator, influencer, decider, buyer and user.

5. Illustrate different types of buying decision behaviour, including complex, dissonance-reducing, habitual and variety seeking buying behaviour.

6. Express the basics of the buyer decision process for new products and identify stages in the adoption process, individual differences in the adoption of innovation, and the influence of product characteristics on the rate of diffusion of innovation.

What is a Consumer Market?

• The consumer market consists of all those individuals and households who acquire goods and services for personal use. – Consumers vary tremendously in age; income;

education level; and product tastes, and buy an incredible variety of goods and services.

– How consumers make their choices among these products takes us into an interesting field of personal; cultural; and social influences, and the consumer behaviour that results from it.

Which factors have the broadest and deepest influence on consumer behaviour?

A. personal

B. organisational

C. social

D. cultural

E. psychological

Consumer Behaviour

• Is the process a consumer goes through to make decisions regarding the purchase, use, and disposal of goods and services

• Refer to Figure 5.1 for key components in the decision-making process

• Refer to Figure 5.2 for influencing factors

Figure 5.1 A Model of Buying Behaviour

Figure 5.2 Factors Influencing Consumer Behaviour

A model of CB

• Consumers make buying decisions every day, leading to many different types of purchases.

• Most marketers undertake consumer research to try to learn more about: what consumers buy, who buys, how they buy, when they buy, where they buy and, most importantly, why they buy.

• The key question is: – How are consumers likely to respond to the

various stimuli marketing organisations might use?

Why does a firm study CB?

• The more a marketer knows about consumer behaviour and how purchase decisions are made, the more able he / she is to influence those decisions in the firm’s favour

Factors Influencing CB

• There are two main influences on consumer purchasing behaviour:– Internal characteristics that determine

behaviour - psychological and personal.

– External influences where the behaviour occurs - cultural and social.

Psychological Influences

• 1. Motivation• 2. Perception• 3. Learning• 4. Beliefs and Attitudes

1. Motivation

• When a consumer indicates an interest in buying a product, there are a number of questions we might ask. – Why is he/ she interested ? – What is the person really seeking? – What needs is he/ she trying to satisfy?

• We have many needs at any given time.

• Sigmund Freud assumed that people are generally unaware of the real psychological forces shaping their behaviour. He sees a person as growing up with many needs that are never fully controlled.

• This theory suggests that buyers don’t always know what motivates a particular purchase, so a marketer may need to undertake greater in-depth research to find an appropriate answer.

Motivation Theories

Cont’d

• Abraham Maslow sought to explain why people are driven by particular needs at particular times.

• Why does one person spend much time and energy on personal safety, while another person tries hard to gain the esteem of others?

He concluded that human needs are arranged in a hierarchy, from the most urgent (basic) need, to the least urgent. (Refer Fig. 5.3).

Figure 5.3 Maslow’s Hierarchy of Needs

Maslow

• SELF-ACTUALISATION Growth Needs

• SELF ESTEEM ) Deficiency Needs

• BELONGING ) - Person feels

• SAFETY ) anxious if these

• PHYSIOLOGICAL ) needs are not met

As each level is fulfilled, the person moves on to the next level in the hierarchy.

2. Perception

• The process by which we

Select; Organise; and Interpret information

• A motivated person is ready to act. How that person acts will be influenced by his or her perception of the situation.

• Two people with similar motivation, and in the same situation, might act quite differently because they each have a different perception of the situation.

Perceptual Processes

Selective Exposure – is the message noticed?

we respond only to certain influences

Selective Distortion – adapt information to suit, to better match our beliefs about a product

Selective Retention – retain only supporting information that reinforces attitudes and beliefs

3. Learning

• When people act, they learn.Learning describes changes in an individual's behaviour arising from experience.

• Learning occurs through the interplay of drives; stimuli; cues; responses; and reinforcement.

• The significance of learning theory to marketers is that they can build demand for a product by associating it with strong drives, using motivating cues and providing positive reinforcement.

A descriptive thought that a person holds about something is best described as a(n):

A. attitude

B. motive

C. drive

D. belief

E. image

4. Beliefs and Attitudes

• People acquire their beliefs and attitudes through acting and learning. This will then influence their individual buying behaviour.

• A belief is a descriptive thought or conviction that a person has about something; it involves having a specific opinion.

• Incorrect beliefs about a product’s features or its brand image can reduce product sales.

4. Cont’d

• An attitude describes a person’s relatively consistent evaluations, feelings and tendencies towards an object or idea.

• People retain attitudes towards a wide range of objects, including business firms and their particular products.

Personal Influences

• A buyer's decisions are also influenced by personal characteristics such as:

– Age and life-cycle stage– Occupation– Level of Education– Economic situation– Personality and Self Image– Consumer lifestyle

Cultural Influences

• Cultural factors have the greatest level of influence on consumer behaviour.

• Because of this, marketers need to understand the role played by:– Culture.

– Cultural diversity.

– Social class.

Social Influences

• A consumer's behaviour is also influenced by social factors, such as the consumer's household type and relevant reference groups, as well as social roles and status.

• These social factors can strongly affect consumer responses, so companies must take them into account when designing their marketing strategies.

All of the following are included in a subculture within the cultural context EXCEPT:

A. gender

B. nationalities

C. religions

D. geographic regions

E. none of the above

Social Influences

• Household types: changing lifestyles and family roles can affect buying decisions.

• Groups:Membership groups to which we belong.

Reference groups that influence our attitudes.

Opinion leaders who have significant influence

• Roles and Status within society– will vary with each situation

Figure 5.4 Group Influence on Product and Brand Choice

Figure 5.5 Consumer Buying Roles

Types of Buying Decisions

Consumer decision making will vary with the type of product to be purchased

1. Complex Buying BehaviourExpensive, risky purchase; perceived differences between products

2. Dissonance-Reducing Buying BehaviourExpensive, risky; difficult to differentiate between the products

Cont’d

3. Habitual Buying BehaviourConsumer makes regular purchase of the same product

4. Variety-Seeking Buying BehaviourConsumer is prone to brand switching; has a low commitment to a particular product

Fig 5.6 Types of Buying Behaviour

Buyer Decision Process, Fig 5.7

• Need Recognition– The first stage of the buyer decision process in which

the consumer recognises a problem or need.

• Information Search– Stage of buyer decision process when consumer is

sufficiently interested to search for more information.

• Evaluation of Alternatives– Stage of the buyer decision process in which the

consumer uses information to evaluate alternative brands in the choice set.

Cont’d

• Purchase Decision– The stage of the process in which the consumer

actually buys the product.

• Post-purchase Behaviour– The stage of the process in which consumers might

take further action after the purchase, based on their level of satisfaction/ dissatisfaction with the purchase.

– Cognitive dissonance is the discomfort or conflict the buyer experiences as a result of the purchase.

Adoption process for New Products

• Stages in the Adoption Process– Awareness– Interest– Evaluation– Trial– Adoption

• Individual Differences in Innovativeness– People differ greatly in their readiness to try products.

Some are early adopters of new technologies, while others will adopt new products much later.

Cont’d

• Awareness knows about, but has limited info

• Interest now looking for relevant info

• Evaluation assesses the product for suitability

• Trial limited use to help in evaluation

• Adoption commitment to the product

Five Adopter groups

• Innovators

• Early Adopters

• Early Majority

• Late Majority

• Laggards

Levels of AdoptionP

erce

nta

ge

of

Ad

op

ters

Time of AdoptionEarly Late

Inn

ova

tors

Early Adopters

Early Majority

2.5%

13.5%

34% 34%

16%

Laggards

Late Majority

Influences on Rate of Adoption

• Relative Advantage: the extent to which a new innovation appears superior to the current product.

• Compatibility: the extent to which the innovation fits the values and experiences of potential consumers.

• Complexity: the extent to which the innovation is difficult to understand or to use.

• Divisibility: the extent to which the innovation may be tried on a limited basis.

• Communicability: the extent to which the benefits of using the innovation can be observed by others, or can be explained to them.

Cont’d

These characteristics of a new product will

affect its rate of adoption within the market

Adoption of some items can be relatively fast• Such as Mobile phones

Some products are adopted almost overnight• Rapid increase in numbers of Web users

Others can take longer to gain acceptance • P