MARKETING MANAGEMENT

TOPIC 5- CONSUMER BEHAVIOUR

Q1. Identify and explain the major factors that influence consumer buying behaviour. (2016)

ANS. Marketing is so much more than creating a catchy phrase or jingle people will sing for
days. Understanding consumer behaviour is a vital aspect of marketing. Consumer behaviour is
the study of how people make decisions about what they buy, want, need, or act in regards to a
product, service, or company. It is critical to understand consumer behaviour to know how
potential consumers will respond to a new product or service. It also helps companies identify
opportunities that are not currently met.

A recent example of a change in consumer behavior is the eating habits of consumers that
dramatically increased the demand for gluten-free (GF) products. The companies that monitored
the change in eating patterns of consumers created GF products to fill a void in the
marketplace. However, many companies did not monitor consumer behavior and were left
behind in releasing GF products. Understanding consumer behavior allowed the pro-active
companies to increase their market share by anticipating the shift in consumer wants.

The decision-making process is presented as a logical flow of activities, working through from
problem recognition to purchase to post-purchase evaluation. The decision-making process is
affected by a number of other more complex influences. Some of these influences relate to the
wider marketing environment in which the decision is made. For example, the friendliness of the
sales person. Marketers seek to understand their customers with the purpose of being able to
predict the outcome of changes, notably to those variables that they have control over, that is,
the marketing mix.

Consumer purchases are influenced strongly by cultural, social, personal(needs and

perceptions), and psychological characteristics. For the most part, marketers cannot control
such factors, but they must take them into account.

Cultural factors exert a broad and deep influence on consumer behaviour. Marketers need to
understand the role played by the buyer’s culture, subculture, and social class.

Culture is the most basic cause of a person’s wants and behaviour. Human behaviour is largely
learned. Growing up in a society, a child learns basic values, perceptions, wants, and
behaviours from his or her family and other important institutions. A child in the United States
normally is exposed to the following values: achievement and success, freedom, individualism,
hard work, activity and involvement, efficiency and practicality,material comfort, youthfulness,
and fitness and health. Every group or society has a culture, and cultural influences on buying
behaviour may vary greatly from both county to county and country to country. Marketers are
always trying to spot cultural shifts so as to discover new products that might be wanted. For
example, the cultural shift toward greater concern about health and fitness has created a huge
industry for health-and-fitness services, exercise equipment and clothing, organic foods,and a
variety of diets.

Each culture contains a variety of subcultures, or groups of people with shared value systems
based on common life experiences and situations. Subcultures include nationalities, religions,
racial groups, and geographic regions. Many subcultures make an important market segments,
and marketers often design products and marketing programs tailored to their needs. Examples
of three such important subculture groups are Hispanic American, African American, and Asian
American consumers.

Almost every society has some form of social class structure. Social classes are society’s
relatively permanent and ordered divisions whose members share similar values, interests, and
behaviours. Social scientists have identified seven American social classes: upper upper class,
lower upper class, upper middle class, middle class, working class, upper lower class, and lower
lower class. Social class is not determined by a single factor, such as income, education,
wealth, and other variables. Marketers are interested in a social class because people within a
social class tend to exhibit similar buying behaviour. Social classes show distinct product and
brand preferences in areas such as clothing, home furnishings, travel and leisure activity,
financial services, and automobiles.

A consumer’s behaviour is also influenced by social factors, such as the consumer’s small
groups, social networks, family, and social roles and status. Many small groups influence a
person’s behaviour. Groups that have a direct influence and to which a person belongs are
called membership groups. In contrast, reference groups serve as direct (face-to-face
interactions) or indirect points of comparison or reference in forming a person’s attitudes or
behaviour. Marketers try to identify the reference groups of their target markets. Reference
groups expose a person to new behaviours and lifestyles, influence the person’s attitudes and
self-concept, and create pressures to conform that may affect the person’s product and brand
choices. The importance of groups influence varies across products and brands. It tends to be
strongest when the product is visible to others whom the buyer respects.

The needs of the family affect what can be afforded, where the spending pri- orities lie, and
how a purchasing decision is made. It is important that the marketer considers trends in society,
adapting the product and promotions to suit. He or she cannot make assumptions based on
traditional stereotypes of the nuclear family. Trends that impact at present include: increase in
single parent families; increase in remarriages creating reconstituted families; more women
having a first child later in life or in some cases deciding to have no children at all; and an
increase in shared responsibility for child-rearing. Members of the family can participate in each
others’ purchase decisions and the roles that any one member takes on will vary depending on
the purchase. Consider the grocery shopping within the family unit. The mother may be the
ultimate decider and purchaser in the supermarket but the rest of the family may have acted as
initiators, e.g. the son asking “when you go shopping will you buy me shaving blades?” or “do
you know we’ve run out of crisps?”, and a daughter may act as influencer, e.g. “buy X brand of
shampoo as it’s the only one that suits my hair”. In designing the marketing mix marketers need
to ask: Who influences the buying decision? Who makes the buying decision? Who makes the
actual purchase? Who uses the product?

One important theory that should not be overlooked is Maslow’s theory of motivation. Maslow’s
Hierarchy of Needs, shows that needs are hierarchical. Marketers have made use of this
framework to classify our basic motivations for purchasing their products. Volvo is an example of
a company that focuses its marketing on the safety needs of its customers. Thus, level two of
the hierarchy, the need for security and protection, forms the themes of its promotional material.
Level 3, social needs, are very common in adver- tisements, reflecting the importance of others
(e.g. reference groups, family) in our decisions. Luxury goods’ manufacturers appeal to our
need for status and recognition in their advertisements.

A person’s buying choices are influenced by psychological factors. Perception is a psychological

factor discussed in Kotler and it is important to marketers as it is the process by which we
analyse, interpret and make sense of incoming information such as advertising messages.
However, con- sumers are bombarded with marketing messages every day and it would be an
impossible task to pay attention and interpret them all equally. Kotler identifies the defence
mechanisms consumers use to protect themselves and make the process of interpretation
bearable. These include: selective attention, i.e. attending to only those messages that are
relevant; selective distortion, i.e. altering information that is inconsistent with our beliefs and
attitudes; selective retention, i.e. retaining only part of what we have selectively perceived.
Marketers have to work hard to overcome these defence mechanisms. They can attempt this by
ensuring messages: stand out from the crowd; are believable (this is often achieved with a
credible source); are repeated several times (this promotes the learning process). Kotler
discusses the influence of attitudes on consumer behaviour and notes that it is extremely
difficult to change strongly held attitudes. For example, consider men’s attitudes to skincare.
Several decades ago men considered the use of Old Spice aftershave as the only requirement
to personal care. Indulg- ing in anything else was perceived as‘feminine’. It has taken much
advertising over many years for men to change these attitudes and to use deodorants,
cleansers and moisturisers. Think about your father or grandfather’s attitude to skincare. It is
probably different to a person now in their 20s. One point Kotler overlooked is that attitudes do
not always predict consum- ers’ purchasing behaviour. A person may hold favourable attitudes
towards a product but not buy it because of some inhibiting factor. The consumer may not have
enough money or may not have a need for the product.

To conclude, we now appreciate the many forces acting on consumer behaviour. The
consumer’s choice results from the interplay of cultural, social and psychological factors.
Q2. Think of a purchase that you have made recently. What decision-making process did you
go through? At each stage, try to remember what you were thinking about and what activities
took place. What factors did influence your choice?

ANS. ​Marketing is so much more than creating a catchy phrase or jingle people will sing for
days. Understanding consumer behaviour is a vital aspect of marketing. Consumer behaviour is
the study of how people make decisions about what they buy, want, need, or act in regards to a
product, service, or company. It is critical to understand consumer behaviour to know how
potential consumers will respond to a new product or service. It also helps companies identify
opportunities that are not currently met.

Buying behaviour differs greatly for a tube of toothpaste, a smartphone, financial services, and a
new car. More complex decisions usually involve more buying participants and more buyer
deliberation. For example, consumers undertake complex buying behaviour. Complex buying
behaviour is a consumer buying behaviour in situations characterized by high consumer
involvement in a purchase and significant perceived differences among the brands.

Another example would be dissonance-reducing buying behaviour. Dissonance-reducing buying

behaviour is consumer buying behaviour in situations characterized by high involvement but few
perceived differences among brands, that is, consumers buying carpeting may face a high
involvement decision because carpeting is expensive and self-expressive. Yet, buyers may
consider most carpet brands in a given price range to be the same. In this case, because
perceived brand differences are not large, buyers may shop around to learn what is available
but buy relatively quickly. They may respond primarily to a good price or purchase convenience.

Another example would be Habitual buying behaviour. It is a consumer buying behaviour in

situations by low consumer involvement and few significant perceived brand differences, take
table salt as an example. Consumers have little involvement in this product category, they
simply go to the store and reach for a brand. If they keep reaching for the same brand, it is out
of habit rather than strong brand loyalty. Consumers appear to have low involvement with most
low-cost, frequently purchased products.

Last would be variety-seeking buying behaviour. It is the consumer buying behaviour in

situations characterized by low consumer involvement but significant perceived brand
differences. An example in such a case would be cookies. When buying cookies, a consumer
may hold some beliefs, choose a cookie brand without much evaluation, and then evaluate that
brand during consumption. The next time, the consumer will choose a different brand out of
boredom or simply to try something different. Brand switching occurs for the sake of variety
rather than because of dissatisfaction.

Now that we have looked at the influences that affect buyers, we are ready to look at how
consumers make buying decisions. The buyer decision process consists of five stages: need
recognition, information search, evaluation of alternatives, purchase decision, and
post-purchase behaviour. Clearly, the buying process starts long before the actual purchase
and continues long after. Marketers need to focus on the entire buying process rather than on
the purchase decision only.

The first stage is ‘Need Recognition’. It is a process in which the consumer recognizes a
problem or need. Marketers can help ‘suggest’ needs in their advertisements by demonstrating
a problem, its effects and how the product or service can resolve it. For exam- ple,
advertisements for insurance products often show the outcome of not having enough or any
insurance and then demonstrate that if you purchase their insurance you will have peace of
mind. In-store activities can trigger needs, e.g. the smell of the bakery within the supermarket
might make you feel hungry and lead you to purchasing goods you hadn’t intended to before
you entered the store.

The second stage is ‘Information Search’. It is a process in which the consumer is motivated to
search for more information. Consumers have two types of information to use: information
stored in their memory; and information that they actively search out with a view to using it in
mak- ing their decision. For example, a person deciding they need to buy a bottle of wine for a
din- ner party might go to the supermarket and read all the point-of-sale material such as
shelf-edge information and labels to help them decide. Another per- son may have a particular
interest in wine and reads all the wine reviews in the newspapers and is part of a wine club
attending tastings once a month. This person has stored away the information needed and
when it comes to needing the wine for a dinner party might ignore point-of-sale material and
refer to his or her memory for stored information. According to Andreasen (1968) there are five
main types of external information sources used by consumers: Impersonal Advocate, e.g.
advertising, point-of sale material; Impersonal Independent, e.g. a technical report, Consumer
Report; Personal Advocate, e.g. sales assistant; Personal Independent, e.g. friends and family;
Direct Observation/Experience, e.g. trying before buying.

The third stage is ‘Evaluation of Alternatives’. It is a process in which the consumer uses
information to evaluate alternative brands in the choice set. On what criteria did you evaluate
the information gathered on various universities? A study by Vaughn, Pitlik & Hansotia (1978)
showed that consumers, when selecting universities, rated quality of education as the most
important criterion. Number and variety of courses offered was also rated highly. Inter- estingly,
basic cost of attending was ranked tenth and location was ranked eleventh. The criteria we use
will vary between each buying situation. In some cases, the price will be the determining factor,
in other cases the availability of the product might be the most important factor.

The fourth stage is ‘Purchase Decision’. Generally the consumer’s purchase decision will be to
buy the most preferred brand, but two factors can come between the purchase decision. The
first factor is the attitude of others. If someone important to you thinks that you should buy the
lowest-priced car, then the chances of you buying a more expensive car are reduced. The
second factor is unexpected situational factors. The consumer may form a purchase intention
based on factors such as expected income, expected price, and expected product benefits.
However, unexpected events may change the purchase intention.

The last stage is ‘ Post-purchase Behaviour’. It is a process in which consumers take further
action after purchase, based on their satisfaction or dissatisfaction. Whatever the purchase,
there is likely to be some level of post-purchase evalua- tion to assess whether the product has
met expectations. For high involvement products this can lead to cognitive dissonance, i.e. a
state in which you feel psychologically uncomfortable about your purchase. Consumers might
ask themselves “Did I really make the right choice? Would brand B have been bet- ter than
brand A?”This points to the role that marketers have in reassuring the customer. Advertising,
follow-up calls after a sale, and even the tone of an in- struction manual, e.g. “congratulations
on choosing brand A ...”, can all help reduce the dissonance. The post-purchase stage is
important because it will affect whether the consumer ever buys this product again.
Furthermore, if the post-purchase evaluation is negative, consumers might tell others about their
bad experience.

Kotler refers to five stages in the new product adoption process: awareness, interest,
evaluation, trial, adoption. It is noted that some of us are ‘innovators’ and are more likely to try
new products. Bear in mind that you can be an innovator in one product category, e.g. stereos,
but not in another category, such as clothes. Would you consider yourself to be the first of your
group to purchase certain products?

Understanding consumer buying behaviour is important if we are to make effective marketing

decisions. Many factors, both internal and external to the consumer, will impact on our
purchasing decisions and this complexity makes it a major challenge to marketers. Blythe
(1997) sums up why it is hard to understand consumer behaviour: consumers are all different;
consumers often act emotionally rather than rationally, i.e. they do not always follow a logical
process; and consumers act differently at different times and often respond differently to the
same stimulus at different times.