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Behaviour
A Rational Decision Making Model
The process itself may involve the following stages:
A need is felt which creates a problem to be solved.
A solution is sought for that problem.
Alternative solutions are analysed and assessed.
A decision is made as to which is the best solution to the problem.
The decision is implemented.
A review is made of the decision.
At any stage it may be necessary to go back to a previous stage and review earlier thinking.
This is known as a feedback loop. This basic process can be shown as a very simple model
as follows:
Rational Decision Making Model
The initiator: the person who comes up with the idea of buying an item
The influencer: the person, or people, who will shape the outcome of the decision
The decider: the person with the power or authority to make the decision
The buyer: the person who makes the actual purchase
The user: the person who will eventually use the product
The gatekeeper: the person who can prevent the decision from being made or make
it more difficult, e.g. a receptionist who prevents a salesperson from seeing a buyer
Types of Purchasing
Habitual Buying
The customer has, in the past, considered alternatives and has found "the ideal". The
customer is happy to stick with their decision and has, in fact, become "loyal".
Variety Seeking
If a product is tried and found to be lacking in some aspect, the buyer will simply try another
one the next time they buy, or they may actively decide to keep trying different brands to see
which is best
Dissonance Reducing
Dissonance reducing purchasing is the kind of purchasing which is designed to reduce postpurchase "doubt". Because the degree of involvement is high, usually because of value and
the item being something this is only bought rarely
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Complex Buying
High product involvement and lots of choice make this an extremely hazardous type of
purchase for a buyer. For example computers, you have to consider machine capabilities,
software, compatibility with your existing discs and printer, etc. This type of decision can take
a lot of time in the search for information and assessment of alternatives before a purchase
is made.
Impulse Buying
There is really no accounting for this type of purchase and yet we all do it from time to time.
We are attracted by an advertisement, or a point of sale display and we leap in and buy
without thinking about it. Producers are aware of the existence of impulse, or non-rational,
purchasing which is why so much money is spent on promotional literature and point of sale
displays.
Marketing managers are in the "people" business. Even though they may be trying to
make profits, they must understand individual and group behaviour both from the
internal (supply) and external (demand) points of view.
Behaviour stems from needs (requirements), and wants (desires)
Cultural
The influences under this heading can be sub-divided into three sections:
Culture
Culture includes both abstract ideas and beliefs, as well as physical artefacts, which
are important to a society. It summarises the learned values and attitudes of a society
as a whole.
Sub-culture
Cultures of all kinds will contain smaller groups or sub-sections. The differences may be
based on life style, religion or on belief in some ideal
Social Class
Despite the claims for "classless societies" which we hear from politicians, class systems
still exist around the world. Social classes are the "divisions" which a society accepts and
they may be based on status, money or education
Social
Influences from family and friends or other reference groups, such as clubs and
interest societies
For example, if your father has always bought Rover cars, you may be influenced
into buying a Rover
university students buy Yugo cars as a status symbol
Becoming first time manager you may realise that a BMW car would fit your status
better than a Yug
.
Personal
Personal factors relate to the individual, e.g. age, life style, occupation, wealth and character.
For example, a young man of 21 who enjoys danger is more likely to be attracted to a motor
cycle
Psychological
Wilson, Gilligan and Pearson (in "Strategic Marketing Management", 1992) identify four
psychological characteristics as being important: motivation; perception; learning; and beliefs
and attitudes.
CLASSIFICATIONS OF CONSUMERS
Socio-economic Groupings (Class)
In the UK, social classes are recognised as:
A Upper middle class: higher managerial or professional levels
B Middle class: middle to senior management, rising professionals
C1 Lower middle class: junior and supervisory managers, clerical grades
C2 Skilled working class: manual trades involving individual skills
D Working class: semi and unskilled workers
E Benefit takers: pensioners, widows, anyone using state benefits.
SAGACITY
The inadequacies of the FLC and social classifications led to the introduction of this
model of influences on behaviour.
The model uses life cycle as its main base and suggests four stages of life:
Dependent, Pre-family, Family and Late.
It then splits up each stage in accordance with income and then income is split up
according to white collar (managerial/higher) or blue collar (skilled/lower)
occupations.
The underlying suggestion of this model is that people will have different hopes and
buying behaviour as they move through their lives and will be influenced by their
current situation.
Geographic/Residential Groups
In the UK, the ACORN system uses categories of housing, i.e.
A Modern family housing for manual workers
B Modern family housing for higher incomes
C Older housing of intermediate status
D Very poor quality older terraced housing
E Rural areas
F Urban local authority housing
G Housing with most overcrowding
H Low-income areas with immigrants
I Student and high-status non-family areas
J Traditional high-status suburbia
K Areas of elderly people.
Life-style Groupings
AIO Activities, Interests and Opinions
Customers are tested by questionnaires which are analysed and the customer is then
"categorised".
VALS Value and Life Style
Arnold Mitchell produced this model of understanding individual behaviour. He suggested
that people can be classified as one of four types:
Need-driven: "survivors" and "sustainers"
Outer-directed people: "belongers", "emulators (imitate to match others)" and
"achievers"
Inner-driven people: "I am me", "experientials", "societally conscious"
Combined (outer/inner): "integrated
The "perceptual system", can include such items as past experience, advertising,
recommendations, perceived need, funds available and even "wishful thinking".
Similarly, "evaluative system" could include such items as attitudes, hereditary
beliefs, knowledge, advice, information search, motives, life-style, and group
compliance.
Fulfilment of Needs
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Herzberg proposed what he called his Two-Factor Theory, in which he stated that factors of
the first kind were hygiene or maintenance factors (they needed satisfying, but they did not,
of themselves, motivate) and those of the second kind were satisfiers.
There are three aspects of behaviour designed to fulfil needs and their impact on consumer
actions.
Within each individual there are several "persons", one of which will be dominant and
the others hidden, at any given time, depending on what you are doing, with whom,
and who is watching. This multiplicity of personality has two sources; one social and
the other psychological. Socially, we may be said to be "more than one person"
because adult people are required to adopt more than one role from time to time.
For instance, I am a writer, a teacher and an administrator in my job and I am a
husband, a father, a son and a brother in my family life; I am also a friend, a fellowmember of a voluntary society and a neighbour among my social contacts; and I am
a ratepayer, a taxpayer, a voter and a householder within civic life.
Psychologically, we are "more than one person" because our perception of
ourselves is a source of considerable anxiety. Malhotra has postulated three different
"self concepts" or self-images:
The actual self-concept (my picture of myself as I really am)
The ideal self-concept (the "me" I would like to be, were it not for my
faults and flaws), and
The social self-concept (the "me" as I believe others see me).
Perceived risk the risk that the purchaser feels is attendant upon his own act of choosing.
This has two sources: lack of information and the possible on sequences of the
purchase.
1)
2)
Once the product has been purchased and tried out, it may be that the consumer's
experience leads him to feel much more comfortable
The mental factors needed for subsequent purchases are fewer. The information
search is much more limited, the sources consulted fewer, the sense of risk may be
reduced and the consumer may feel that he now "knows his way around" when
looking for the product
Routine Problem-solving
After a while, the consumer may become habituated to buying the product and
knowledgeable about where and for how much it may be had.
There is some evidence that consumers may become so bored with their RPS state
that they actually engage in brand-switching behaviour, simply to alleviate the tedium
of repeatedly buying the same product time after time.
The interactive way that some groups of people influence others is of great
importance to marketers. A good deal of research has been done in this area and we
shall examine three of the key concepts here.
The model of the "diffusion of innovation" developed by Rogers continues with the idea
that people move through the decision-making process at different speeds.
They are usually also quite prepared to pay a premium price for something that is
new, where other people might be more cautious and wait until price competition has
brought the price down to a level they are more comfortable with. These people are
referred to commonly as innovators and people like this are thought to constitute
only about 2.5% of the population.
Following the innovators in taking up products are the early adopters. These
(perhaps 13.5% of the population) are people who are not temperamentally inclined
to take the risks associated with discovering and trying out new things for
themselves, but who are keen "followers of fashion".
The next group is the early majority. These (34% of the population) will generally
not try a product until it has been well tried by others before them. They are not
inclined to search hard for a product so if it is not on the shelves of their regular
shops and stores, they will not go to the trouble of seeking it out, as innovators or
early adopters would.
Another 34% of the population are the late majority, who do not feel comfortable
with a new product unless there is clearly little risk associated with its newness. They
prefer to choose between several competing brands and they need the low prices
associated with fierce competition to tempt them into the market.
Finally, there is a group of some 16% who are known as laggards. These people are
distrustful of anything that is not seen as traditional, well-tried and tested, familiar,
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even old-fashioned. Curiously, although these come very late to market for products,
they are among the most loyal of consumers.
(c) Credibility
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Cognitive Dissonance
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Festinger suggests that when a person makes a decision (any kind of decision, not
just a purchase) the mind is rather like a weighing-scale or balance.
On one side of the scale are the positive factors that make one tend towards a
particular decision and the negative factors that make one tend away from the
alternatives.
On the other side of the scale are the negative ideas about the chosen option plus all
the positive things about the alternatives.
Festinger's Theory of Cognitive Dissonance
Festinger demonstrated that when the scale tips sharply in either direction, we are
mentally comfortable; we experience "assonance" or harmony. We feel that the
evidence shows that we made the right decision or that we definitely made the wrong
decision and so we act quickly to reverse it
A decision too close to the point of balance produces dissonance an unpleasant
conflict of closely-related ideas.
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Decision-Making Sets
Decision-making Sets
Attention
Interest
Desire
Action
This model has spawned many others, as various scholars sought to improve upon it.
The generic name for all these models is "hierarchy of effects" models, since they all
postulate an ordered process of successive mental stages.
Here are just a few:
Colley (1961)
Unawareness Awareness Comprehension Conviction Action
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Rogers (1962)
Awareness Interest Evaluation Trial Adoption
ORGANISATIONAL PURCHASING
Organisations buy differently from individual consumers for a number of reasons:
They have multiple objectives/needs for example Profits, Reduced costs, Meeting
needs of employees, Legal and social restraints etc
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