Revision Questions 3
Exercise 4.2 For refl ection
4.5 Consumer behaviour
The marketing concept means that organisations need to understand their customers before marketing plans can be developed, or attempts made to improve customer satisfac-tion. Combining many strands and elements from sociology, anthropology and economics the study of consumer behaviour is highly relevant because it gives insights into:
● who buys (individuals or groups)
● how people buy
● what they buy
● when they buy
● why they buy
4.5.1 Factors affecting buying decisions
There are many factors that infl uence the purchasing decision. It is felt that the major fac-tors infl uencing consumer behaviour are as follows:
● Cultural: the national, or organisational culture, and factors such as social class of the consumer.
● Personality: age, gender, occupation, economic circumstances, lifestyle, personality and the consumer’s self perception.
● Social: the consumers reference groups (e.g. family) and their own role and status within these groups.
● Psychological: the consumer’s motives, perceptions, beliefs and attitudes.
Naturally organisations also hope that the marketing mix (of product, price, promotion and place) will provide a powerful additional infl uence. Social interaction theory states that an individual’s behaviour may depend on what he or she perceives others in society
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to be doing. The social infl uence of others therefore impacts on a person’s buying habits.
So social stigma associated with purchasing a particular product or service may deter con-sumption. Conversely a feeling that others are acquiring a particular service of good might create a ‘me too’ attitude amongst consumers.
Business-to-business (B2B) marketing differs from business-to-consumer (B2C) market-ing in a number of key respects, not least the fact that the purchaser makes buymarket-ing deci-sions for organisational rather than personal reasons. In addition several individuals and groups are involved in the B2B buying decision including:
● Initiators who start the buying process. (It might be for instance a department who iden-tify a need to replace a piece of equipment.)
● Infl uencers who affect the buying decision often based on their particular technical expertise.
● Buyers who raise orders and sanction payment and although they may enter into nego-tiation they may be guided heavily by others in the organisation.
● Users who ultimately operate the equipment (using the earlier example).
There may be others (dependent upon the organisation) who will have further roles such as Deciders, Approvers and Gatekeepers.
Exercise 4.6
On what basis are B2B (where B2B means business to business) purchasing decisions made?
Solution
● Economic/task factors (price, delivery, location, quality, reliability, customer care, after care, etc.)
● Non-task factors (personal risk or gain, previous decisions, politics, those infl uencing the purchaser, perception, etc.)
or probably some combination of both.
Signifi cant B2B marketing mix features include quality assurance, reliability, delivery, price and after sales service.
4.5.2 The buying process
Lancaster and Withey (2006) identify a consumer decision buying process as having fi ve stages:
1. Problem recognition (as purchasing is a problem solving process). It is important to understand that consumers do not buy so much goods or services as to satisfy a demand or need through the purchase. The consumer identifi es the need or problem. The organ-isation must attempt to convince the consumer that the product could be the answer.
2. Information searching. The consumer may perform this search informally in terms of memory of past experiences or by talking with others. Here the marketing implication is the nature of information provided to prospective consumers.
3. Evaluation of alternatives by the consumer. The consumer compares various brands and products in order that a choice might be made. The organisation needs to understand on what basis this choice is made (e.g. price, weight, value for money, packaging, etc.).
4. Purchasing decision. This stage is where the customer actually makes a purchase choice.
The marketer will be keen to learn how they might assist in this process. The choice
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might only be altered if for instance there is a stock out or further information emerges about alternatives.
5. Post purchase evaluation. The consumer will assess whether they are satisfi ed with their purchase decision. Increasingly consumers are written to or telephoned to determine this information.
4.5.3 Buyer behaviour
Rationally, consumer behaviour can be understood in terms of:
● Relevance: If a product or service is being purchased for the fi rst time the consumer will be highly involved. The consumer will take more time and effort to make a choice as a way of compensating for their inexperience or minimising the risk. Consumers will also spend more time gathering and processing information for decisions that are important to them.
● Frequency: If by comparison the consumption is repetitive by nature, possibly purchased frequently, and low priced the consumer will give the purchase little conscious attention and have low involvement in the process. (The purchaser will, after all have experienced the good or service many times previously).
● Freedom: A less voluntary or involuntary consumption. It may be seen as something unavoidable possibly if there is little choice between brands, for instance the purchasing process in refi lling a car with fuel.
● Infl uence: Here the issue is the susceptibility of the consumer to infl uence by others because the consumer might be purchasing on behalf of the family as a whole or the business they work for.
Exercise 4.7
Using these four headings think of different examples of purchases that illustrate buyer behaviour.
One solution
Example Relevance Purchasing a wedding dress
Frequency Purchasing household cleaning liquid Freedom Energy consumption
Infl uence (Family) purchase of a particular breakfast cereal
Sometimes these ideas might not apply for a variety of reasons, not least too much choice can create information overload and confuse the consumer. In addition decisions are not always made on rational grounds and often they are emotion-driven possibly because of the impact of a brand name.
4.5.4 Theories of consumer behaviour
Theories of consumer behaviour help guide marketing practices by offering insights into issues such as:
● the effectiveness of pricing incentives (the likely impact on sales, behaviour when the price cut ends, etc.)
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● the effectiveness of promotion (the likely impact on sales, loyalty, the duration of the impact of promotion, etc.)
● efforts to strengthen a brand image (the likely impact on new products, old products and the reasons for this, etc.)
The main theories of consumer behaviour are briefl y outlined here.
The cognitive paradigm. This theory is based on the idea that a purchase is an outcome of problem-solving. Thus consumer behaviour can be explained as a decision-making proc-ess. The consumer is believed to be able to receive and make sense of considerable quan-tities of information, to engage in comparative evaluation of alternative products and brands, and to make a rational selection. The theory falls down when the consumer has insuffi cient time or motivation to the search for information and evaluation alternatives.
The learned behaviour theory. Consumers learn from past experiences either through sat-isfaction or dissatsat-isfaction with a product or service. Consumers take short cuts when purchases are of a routine or habitual nature.
Habitual decision-making. Consumers make decisions based on either loyalty to a partic-ular brand, inertia (the need is satisfi ed, but there is no special interest in the product) or ‘satisfying behaviour’, accepting the fi rst solution that is good enough to satisfy your need, even if a better solution may exist. Buyer behaviour can become estab-lished and habits may be deeply embedded.
Infl uencing peoples’ actions in their consumption patterns is an important issue in mar-keting. Consumer behaviour can be infl uenced by a potentially diverse series of factors including the social and physical environment.