What is Consumer Behaviour?

Consumer behaviour or Buyer behaviour is defined as the behaviour that consumers display in searching for, purchasing, using, evaluating and disposing of 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 they buy it from, 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.

Factors Influencing Consumer Behavior

Cultural Factors

Culture (It is the fundamental determinant of a person’s wants and behavior)

Subculture (It provides more specific identification and socialization for their members. It includes religions, geographic regions etc)

Social Classes (Relatively homogeneous and enduring divisions in a society, which are hierarchically ordered and whose members share similar values, interests and behavior)

Social Factors

Reference Groups (It consists of all the groups that have a direct or indirect influence on his/her attitudes or behavior)

Family ( Family of orientation consists of parents and siblings whereas family of procreation consists of one’s spouse and children)

Roles and Statuses ( A Role consists of the activities a person is expected to perform and each role carries a status)

Personal Factors

Age And Stage In The Life Cycle

Occupation And Economic Circumstances

Personality And Self-Concept (Personality is a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli. Personality is often described in terms of such traits as self-confidence, dominance, defensiveness, adaptability etc. Consumers often choose and use brands that have a brand personality consistent with their actual self-concept (how one views oneself), although in some cases the match may be based on the consumer’s ideal self-concept or even others’ self-concept)

Lifestyle And Values ( A lifestyle is a person’s pattern of living in the world as expressed in activities, interests and opinions. Consumer decisions are also influenced by core values, the belief system that underlie consumer attitudes and behaviors)

Psychological Factors

Motivation (Buyer’s needs are normally biogenic or physiological, and psychogenic or psychological. When they are aroused to a sufficient level of intensity they become motives, urging the buyer to seek satisfaction. Abraham Maslow’s Hierarchy of Needs include Physiological needs, Safety needs, Social needs, Esteem needs and Self-actualization needs)

Perception (Once motivated, how the motivated buyer acts is influenced by his or her perception of the situation. That is, how the buyer receives, selects, organizes and interprets information.)

Learning (Learning involves changes in buyer’s behaviour as a result of his experience)

Beliefs and Attitudes (Beliefs may be founded on knowledge, opinion or faith. Attitudes reveal the judgements, feelings and tendencies of the buyer towards an object or idea).

Perception

Selective Attention: It has been estimated that the average person may be exposed to over 1,500 ads or brand communications a day. Because a person cannot possibly attend to all of these, most stimuli will be screened out- a process called selective attention

Selective Distortion: It is the tendency to interpret information in a way that will fit our preconceptions. Consumers will often distort information to be consistent with prior brand and product beliefs.

Selective Retention: People will fail to register much information to which they are exposed in memory, but will tend to retain information that supports their attitudes and beliefs. Because of selective retention, we are likely to remember good points about a product we like and forget good points about competing products.

Buying Motives

Buying motives are defined as ‘all the impulses, desires and considerations’ which persuade or motivate a buyer to purchase a specific product.

There are 2 different types of buying motives: Product Motives and Patronage Motives

Product motives are the impulses, desires and considerations which make people buy a specific product. Product motives can be classified into emotional motives, rational motives, operational motives and socio-psychological motives.

The impulses and influences which persuade a buyer to buy from particular shops or company explain Patronage motives. Patronage motives can also be emotional and rational.

Buying Roles

Initiator (The Initiator is the person who first suggests or thinks of the idea of buying the particular product or service)

Influencer (An influencer is a person whose views and advice carry some weight in making the final decision)

Decider ( The decider is a person who ultimately determines any part of, or the entire buying decision- whether to buy, what to buy, how to buy or where to buy)

Buyer (The buyer is the person who makes the actual purchase)

User (The user is the person or persons who consume or use the product or service)

Types of Buyer Behavior

Complex Buying Behaviour (Consumers are highly involved in a purchase when it is expensive, bought infrequently, risky and highly self-expresssive)

Dissonance Reducing Buyer Behaviour ( Here the buyer will shop around to learn what is available but will buy fairly quickly because brand differences are not pronounced)

Habitual Buying Behaviour (Consumers have low involvement with most low-cost, frequently purchased products)

Variety Seeking Buying Behaviour (Brand switching occurs for the sake of variety rather than dissatisfcation)

Stages In the Buying Decision Process

Problem recognition

Information search

Evaluation of alternatives

Purchase decision

Postpurchase behaviour

Problem recognition

The buying process starts when the buyer recognizes a problem or need. The need can be triggered by internal or external stimuli.

With an internal stimulus, one of the person’s normal needs- hunger, thirst, etc- rises to a threshold level and becomes a drive; or a need can be aroused by an external stimulus. A person may admire a neighbour’s new car or see a television ad for a vacation, which triggers thoughts about the possibility of making a purchase.

Information Sources:

Personal: Family, friends, neighbours etc

Commercial: Advertising, Websites, Sales persons, displays

Experiential: Handling, examining, using the product

The attributes of interest to buyers vary by product:

Cameras- Picture sharpness, camera speeds, camera size, price

Mouthwash- Colour, effectiveness, germ-killing capacity, taste/flavor, price

Tires: Safety, ride quality, price

A consumer’s decision to modify, postpone, or avoid a purchase decision is heavily influenced by perceived risk

Functional risk: : It is the risk that the product will not perform as expected.

Physical risk: It is the risk to self and others that the product may pose. ( “Is a cellular phone really safe, or does it emit harmful radiation?”)

Financial risk: It is the risk that the product will not be worth its cost ( “ Will a new and cheaper model of a Plasma TV monitor become available six months from now?”)

Social risk: It is the risk that a poor product choice may result in social embarrassment. ( “Will my classmates laugh at my new haircut?”)

Psychological risk: It is the risk that a poor product choice will bruise the consumer’s ego ( “Will I be embarrassed when I invite friends to listen to music on my five-year-old stereo?”)

Time risk: It is the risk that the time spent in product search may be wasted if the product does not perform as expected. (“Will I have to go through the shopping effort all over again?”)

Postpurchase Behavior

Delighted

Satisfied

Dissatisfied

Postpurchase Cognitive dissonance

Adoption Process

Buying decisions for new products go through different stages in an ‘Adoption Process’. The adoption process is defined as “ the mental process through which an individual passes from first learning about an innovation to final adoption”, and adoption as “ the decision by an individual to become a regular user of the product”. (Everett M Rogers, Diffusion of Innovations).

The buyers go through 5 stages in the adoption process for a new product. They are:

Awareness (The buyer becomes aware of the new product)

Interest ( The buyer shows interest and seeks information about the new product)

Evaluation (The buyer considers whether trying a new product will be worthwhile)

Trial ( The buyer tries the new product as a sample to see how it is and whether it is worth buying it regularly)

Adoption ( the buyer decides to become a regular customer of the new product)

What Is Organizational Buying?

Webster and Wind defines organizational buying as the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.

The business market consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others. The major industries making up the business market are manufacturing, construction, transportation etc.

Various characteristics of Business Markets that contrast sharply with those of consumer markets:

Fewer, larger buyers

Close supplier- customer relationship

Professional purchasing

Several buying influences

Multiple sales calls

Derived demand

Inelastic demand

Geographically concentrated buyers

Direct purchasing

Buying Situations

Straight Rebuy (The purchasing department reorders on a routine basis( E.g. office supplies, bulk chemicals) and chooses from suppliers on an ‘approved list”.

Modified Rebuy (The buyer want to modify product specifications, prices, delivery requirements, or other terms)

New task ( A purchaser buys a product or service for the first time (e.g., office building, new

security system). Stages in the Organizational Buying Process

Problem Recognition ( The buying process begins when someone in the company recognizes a problem or need that can be met by acquiring a good or service)

General Need Description and Product Specification (The Buyer determines the needed item’s general characteristics and required quantity)

Supplier Search (The buyer tries to identify the most appropriate suppliers through trade directories, contacts with other companies etc)

Proposal Solicitation (The buyer invites qualified suppliers to submit proposals)

Supplier Selection: (Before selecting a supplier, the buying center will specify desired supplier attributes and indicate their relative importance. For example, for products such as copying machine, the three most important attributes are technical service, supplier flexibility, and product reliability)

Order-Routine Specification (After selecting suppliers, the buyer negotiates the final order, listing the technical specifications, the quantity needed, the expected time of delivery, return policies and so on)

Performance Review ( After the purchase is made, the buyer reviews the performance of the supplier. The feedback normally comes from the user department. Based on the review, the buyer may decide to continue, modify the contract or cancel further supply).

Consumerism’

Organized efforts by individuals, groups and governments to help protect consumers from policies and practices that infringe consumer rights to fair business practices.

Consumer Protection Act, 1986

Right to Safety: To be protected against the sale of goods and services which are spurious/hazardous for the life.

Right to Information: To know the quality, quantity, weight and the price of goods/services being paid for, so that one is not cheated by unfair trade practices.

Right to Choose: To be assured, wherever possible, access to a variety of goods and services at competitive prices.

• Right to be Heard: To be heard and to be assured that the interest would receive due consideration at appropriate forums Right to Seek Redressal: To seek legal redressal against unfair or restrictive trade practices or exploitation.

Right to Consumer Education: To have access to consumer education