The Consumer Behavior Field Commerce Essay

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on the consumer behavior field of study and will explore the origin of a consumer focus in marketing. Since the term consumer will be used and quoted from all the sources consulted in this chapter, it is important to 2 ."'" ..... ~. First define the term "consumer". Walters (1974: 4) provides such a definition by stating that "A consumer is an individual who purchases, has the capacity to purchase, goods and services offered for sale by marketing institutions in order to satisfy personal or household needs, wants, or desires."

as will be noted from the definition above, referral is made to an individual. Therefore, one should first focus on human behavior, since consumer behavior, according to Walters (1974: 6), represents a subset of human behavior (discussed in Section 2.3). Human behavior, therefore, " ... refers to the total process whereby the individual interacts with his environment" (Walters 1974: 6).

Human behavior encompasses every thought, feeling or action by people. This implies that every thought, motive, sensation and decision that is made every day, is classified as human behavior. Belch & Belch (1990: 91) provide a link between human behavior and consumer behavior, by stating that consumer behavior has been defined as the study of human behavior in a consumer role. Consumer behavior, according to Walters (1974: 6), represents specific types of human actions, namely those concerned with the purchase of products and services from marketing organizations

2.2.1. Buyer behavior

According to Walters (1974: 7) defines consumer behaviour as: " ... the process whereby individuals decide whether, what, when, where, how, and from whom to purchase goods and services."

Mowen (1993: 6) provides a different definition by explaining consumer behaviour as: "... the study of the buying units and the exchange processes involved in acquiring, consuming, and disposing of goods, services, experiences, and ideas". This definition focuses on buying units in an attempt to include not only the individual but also groups that purchase products or services.

Schiffman & Kanuk (1997: 648) define consumer behaviour as: "The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products, services, and ideas." Schiffman & Kanuk (1997: 6-7). According Those definition elaborate on the what consumer behavior is, therefore, Schiffman & Kanuk (2005; p8)the study of how individuals make decisions to spend their available resources (time, money, effort) on consumption-related items. It includes the study of what, why, when, where and how often they purchase and how they use the purchased product. In that book further explaining again definition of consumer behavior, "encompasses all the behaviors that consumers display in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs. That included following questions; What they buy, Why they buy it , When they buy it, Where they buy it, How often they buy it, How often they use it, How they evaluate after the purchases and the impact of such evaluation on future purchases , How they dispose it

As a marketer need to get focus and analyzed main area which is gives high weight. Reasons for why consumers make the purchases and what are factor affecting on their consumers purchase and how they react changing environment such as economic, political, technological, etc. Therefore marketers need to identify consumers behaviors and their types of behaviors before develop marketing strategies.

according to Schiffman & Kanuk (1997: 6-7), two different types of consumers can be distinguished, namely personal and organizational consumers. Personal consumers purchase products and services for personal or household use or as a gift to someone else. Personal consumers, therefore, purchase for final consumption. Organizational consumers on the other hand purchase products and services to run an organization, including profitable and non-profitable organizations, government organizations and institutions.

A final definition of consumer behavior, by Engel, Blackwell & Miniard (1990: G­4), states that: "those actions directly involved in obtaining, consuming, and disposing of products and services, including the decision processes that precede and follow these actions". More recent descriptions or definitions (which in essence do not differ from the above) can be found in Arnould, Price & Zinkhan (2002: 5) and Peter & Olson (2002: 6).

2.2.2. Important of consumer behavior

according to Engel et al. (1990: 22) and Schiffman & Kanuk (1997: 8), consumer behaviour is regarded as a relatively new field of study with no historical body of research of its own. The concepts of the development, therefore, were heavily and sometimes indiscriminately borrowed from other scientific disciplines, such as psychology (the study of the individual), sociology (the study of groups), social psychology (the study of how individuals operate in groups), anthropology (the influence of society on the individual) and economics.

According to Engel et al. (1990: 22) and Schiffman & Kanuk (1997: 8), consumer behaviour is regarded as a relatively new field of study with no historical body of research of its own. The concepts of the development, therefore, were heavily and sometimes indiscriminately borrowed from other scientific disciplines, such as psychology (the study of the individual), sociology (the study of groups), social psychology (the study of how individuals operate in groups), anthropology (the influence of society on the individual) and economics. From a marketing perspective, consumer behaviour most probably became an important field of study with the development of the so-called marketing concept.

Assael (1995: 5) emphasises the influence of the marketing concept in marketing by stating that, according to the marketing concept, marketers first need to define benefits sought by consumers in the marketplace, followed by the drafting of marketing plans supporting the needs of consumers. The marketing concept was formulated during the 1950s and although it seems logical, marketers never considered the concept thereof earlier. Assael (1995: 8) provides two reasons why marketers did not use the concept earlier. The first is that marketing institutions were not sufficiently developed to accept the marketing concept prior to the 1950s. Advertising and distribution were geared for the mass production and mass marketing strategies of that time. The implementation of the marketing concept requires diverse facilities for the promotion and distribution of products that will meet the needs of small, diverse market segments. The production and marketing focus before the 1950s was therefore concerned with economies of scale. The second reason for not pursuing the marketing concept prior to the 1950s can be attributed to the lack of a need to do so. The effects of the Depression resulted in very little spending power of consumers, attributing to the lack of interest in consumer behavior. The Second World War, immediately after the Depression, contributed to the lack of interest in consumer behavior since product scarcities were the order of the day. With the lack of competitive pressure, manufacturers could sell whatever products they manufactured. The marketing approach for this era, according to Schiffman & Kanuk (1997: 10), is called a production orientation, where consumers purchased what was available, rather than waiting for what they wanted. The production orientation was followed by a selling orientation, where marketers attempted to sell products that they unilaterally decided to produce. The assumption of this orientation, according to Schiffman & Kanuk (1997: 10), was that consumers were not willing to purchase products, unless they were actively and aggressively persuaded to do so. The selling orientation did not consider consumer satisfaction, leading consumers to communicate negatively regarding the product by means of word-of-mouth if they were not satisfied with it. In the early 1950s marketers realized that they could sell more products more easily by offering products to those consumers they assumed would purchase them. Through this approach, organizations considered consumer needs and wants, leading to the formulation of the marketing concept. As can be seen from a historical perspective, it is important for any organization to acknowledge consumer needs as a key to success for both survival and profit generation in a modern economy with multiple products per competitor and multiple competing distribution points. The importance of understanding consumer behavior can most probably be summarized in a simple, yet powerful, statement by Assael (1995: 3): "Consumers determine the sales and profits of a firm by their purchasing decisions. As such, their motives and actions determine the economic viability of the firm". To be a successful seller of products and services (as can be concluded from the statement above), organisations need to understand consumer needs and behaviour and draft their marketing strategies to incorporate such behavioural needs of consumers. Section 2.2 provided an insight into the consumer behaviour field of study. Before addressing models of consumer behaviour in Section 2.4 (insight to the factors influencing consumers in the purchase process), models of human behaviour will be discussed in Section 2.3, providing greater clarity regarding the way in which human beings behave.

2.2.3. Model of buying behavior

According to Kotler (in Gould, 1979: 33), it is an extremely difficult task to uncover the reasons why people buy, as they are subject to many influences. One reason is that humans are greatly influenced by their psyche, which eventually leads to overt purchase responses. Runyon & Stewart (19B7: 694-695) explain the theory of human behavior by stating that it represents the beliefs held regarding the nature of human beings as well as the causes of their behavior. Human beings can therefore be viewed from many perspectives. If, for instance, human beings are viewed from an economic perspective, marketers may attempt to influence them with economic incentives. If, however, viewed from a social theory perspective, marketers may attempt to influence people through appeals to group norms, references and values. According to Runyon & Stewart (1987: 695), in discussing models of human behavior, it is important to note that the models proposed are viewed as being an incomplete description of human beings, where different models may be appropriate for different marketing situations. Despite the above view, models of human behavior provide valuable input to consumer behavior, since they attempt to provide insights into why human beings, and therefore consumers, rationalise purchase decisions. To provide a clearer understanding of human behavior, four models will be discussed together with marketing applications based on the findings of Kotler (in Gould, 1979: 34-46). The models of human behaviour discussed below are the Marshallian economic model, the Pavlovian learning model, the Freudian psychoanalytical model and the Veblenian social-psychological model. In addition to these four models, the theory of Maslow's hierarchy of needs will be discussed to provide a perspective on the importance of understanding the influence of needs and motivation on consumer behaviour.

2.2.3. (i). The Marshalling economic model

According to the Marshallian economic model, individual buyers will spend their income on goods that will offer the greatest satisfaction, depending on their taste and the relative prices of goods. The antecedents for the Marshallian theory can be traced back to both Adam Smith and Jeremy Bentham. In accordance with a doctrine of economic growth developed by Smith, man is said to be motivated in all his actions by self-interest. Bentham, who viewed man as carefully calculating and weighing expected pains and pleasures of every contemplated action, refined this view. By the time Bentham's theory was applied to consumer behaviour late in the 19th century, the "marginal-utility" theory of value was formulated independently and almost simultaneously by Walras in Switzerland, Menger in Australia and Jevons and Marshall in England (Kotler, in Gould; 1979: 35). The theoretical work of Alfred Marshall, who was the consolidator of the classical and neo-classical tradition in economics aimed at realism, is founded in his method to examine the effect of change in a single variable, for example price, when all other variables were held constant, based on simplified assumptions. In the quest for greater realism, Marshall "reasoned out" consequences of the provisional assumptions and modified his assumptions in subsequent steps. Marshall's methods and assumptions have been refined to the Modern Utility Theory, where the economic man maximizes his utility and does this by carefully calculating the ''felicific'' consequences of any purchase. Runyon & Stewart (1987: 695) add to the discussion by stating that Marshall used money as the common denominator of psychological needs, where the value of satisfying a specific need could be equated and compared with other needs in terms of cost.

2.2.3. (i). (a) Marketing applications of the Marshallian model

The value of the Marshallian model for the purposes of behavioral science can be viewed from a number of different viewpoints (Kotler, in Gould; 1979: 35-36). One point of view is that the model is tautological and therefore neither true nor false. The model is also not very informative because it simply portrays the buyer as acting in his best interest. A second view is that the model provides logical norms for buyers who want to be "rational", therefore it is a normative rather than a descriptive model of behavior. The consumer is not likely to employ an economic analysis for all purchases, but is rather selective in using an economic theory. A consumer may therefore not use the economic principles for choosing between two low-cost products but may apply an economic analysis when deciding to purchase a new house or car. A third view is that economic factors should be included in any comprehensive description of buying behavior, since economic factors operate, to a greater or lesser extent, in all markets. The Marshallian model provides a number of useful behavioural hypotheses. The first hypothesis offered is that the lower the price of a product, the greater the sales will be for that product. A second hypothesis is that the lower the price of a substitute product is than that of a specific product, the greater the sales of the substitute product will be. Third, the sales of a product will be higher, provided it is not an inferior product, if the real income is higher. The last hypothesis states that greater volumes of sales will follow as promotional expenditure is increased. It should be noted that these hypotheses are intended to describe the average effect and do not attempt to class all individuals' actions as continuously calculating the economic impact during purchase decisions. As a final comment to the Marshallian model, it can be concluded that economic factors alone cannot explain all variations in the sales and buying process and also that the fundamentals of how brand and product preferences are formed are ignored in this theory. The model offers a useful frame of reference for analysing only a small portion of the consumer's psyche.

2.2.3. (ii). The Veblenian social-psychological model

The Veblenian social-psychological model of human behavior is based on the findings of Thorstein Veblen, who received his training as an orthodox economist and evolved as a social thinker through the influence of the science of social anthropology. According to this model, man is perceived to be a so-called "social animal", where man conforms to norms of its larger culture and to more specific standards of subcultures and face-to-face groups in which humans operate (Kotler, in Gould; 1979: 41). In essence this implies that human behavior and needs are moulded by present group memberships. Based on the theory of the model, Veblen hypothesized that, for the so-called leisure class, a great portion of economic consumption is influenced and motivated by prestige seeking and not on needs or satisfaction. Veblen placed specific emphasis on emulative factors that would influence people when purchasing conspicuous products, for example cars and houses or even less expensive items, such as clothes. The model is criticized as it is perceived by more modern perspectives to be overstated. For example, not all people consider the leisure class to be a frame of reference and many people aspire to the social class immediately above their current social class. In addition to the above, more affluent people of the society would rather under spend than overspend on conspicuous items since they would rather "fit in" than "stand out". A final comment on the model is that although Veblen was not the first investigator to comment on the influence of social class on human behavior, the incisive quality of his observations inspired further investigations.

2.2.3. (ii). (a) Marketing applications of the Veblenian model

The importance of the Veblenian model, according to Kotler (in Gould, 1979: 42), to the marketer is that, in order to determine the demand for products, the most important social influences impacting on such product demands should be determined. Important for the marketer to consider is the impact of different social influences, which include social class, subculture, reference groups and face-to-face groups.

2.2.3. (iii).The Pavlovian learning model

The well-known Pavlovian theory of learning has its origin in the experiments of the Russian psychologist, Pavlov, who conducted his experiments by ringing a bell each time before feeding a dog. Pavlov soon discovered that he could induce the dog to salivate by ringing the bell regardless of whether or not food was offered to the dog. From this experiment, Pavlov could conclude that learning occurred due to a process of association and that a large component of human behavior was conditioned in this way. Experimental psychologists, focusing on rats and other animals and eventually human beings, continued Pavlov's mode of research. The objective of laboratory experiments was to explore phenomena such as learning, forgetting and the ability to discriminate. The result of the research led to a stimulus-response model of human behaviour, based on four central concepts, namely drive, cue, response and reinforcement. Before briefly discussing these concepts, it should be mentioned that O'Shaughnessy (1992: 116) explains that according to Pavlovian theory, also called classical conditioning, there has to be a connection between some stimulus and a true reflex reaction. The four central concepts of the Pavlovian theory are briefly discussed below.

Drive: In the Pavlovian learning model, drive, also referred to as "needs" or "motives", implies strong stimuli internal to the individual, which activate action. Two types of drives are distinguished by psychologists, namely primary physiological and learned drives. Primary physiological drives refer to basic individual factors, such as hunger, thirst, pain, cold and sex. Learned drives, which are derived socially, include factors such as COM operation, fear and acquisitiveness.

Cue: According to the model, a drive is very general and a particular response is impelled only in relation to a particular configuration of cues. Cues are furthermore perceived as weaker stimuli in the individual and the environment and will determine where, when, and how a subject responds. As an example, an advertisement for coffee may act as a cue, which stimulates the thirst drive. The response will be influenced by this cue as well as other cues, for example time of day and availability of other thirst-quenchers.

Response: Response implies the reaction to the configuration of the cues. It should, however, be noted that the exact configuration of cues will not necessarily generate the same response. The same response depends on the degree to which the experience was rewarding.

Reinforcement: A rewarding experience will result in the reinforcement of a particular response. It is therefore implied that the tendency is formed where the same response will be repeated when the same configuration of cues appears. If, however, a learned response or habit is not reinforced, the habit may eventually be extinguished, since the strength of the habit decreases.

Important to note is that, in contrast to extinction, forgetting occurs when learned associations weaken due to non-use and not because of the lack of reinforcement.

2.2.3. (iii).(a) .Marketing applications of the Pavlovian model

The Pavlovian model makes no claim to provide a complete theory of consumer behaviour due to the omission of interpersonal influences, perception and the subconscious influences considered to be important phenomena. The model does, however, contribute to marketing by providing insights to the marketer concerning consumer behavior and advertising strategy. An example of the usefulness of the model for the marketer would be the introduction of a new brand into a highly competitive market. The organization may attempt to form new habits for its new brand by extinguishing existing brand habits. A challenge to the organization will be to persuade consumers to try the new brand by deciding between using strong and weak cues. Although strong cues, for example samples of the product, may be the more expensive alternative, it often is the desired approach to target markets characterized by high brand loyalties. Also of importance, considering the reinforcing component of the model, is that sufficient quality should be built into the brand to create a positive experience. In addition to the above, it may be useful to determine the most effective cues in leading brands. The second area in which the Pavlovian model offers insight, according to Kotler (in Gould, 1979: 38), is in the form of guidance for advertising strategy. The model emphasizes the repetition in advertising since a single exposure is very likely to be a weak cue, hardly able to sufficiently arouse the individual's consciousness to inspire the drive as discussed in the model. Repetition in advertising also has two desirable effects (Kotler, in Gould; 1979: 38). Repetition (or frequency of association, according to Belch & Belch, 2001: 125) firstly combats forgetting and secondly provides reinforcement since the consumer becomes selectively exposed to advertisements of the product after purchase. As closure to the value of the model offered to marketing, guidance is provided to advertising copy, since in order to be effective, an advertisement should arouse strong drives in a person. Marketers should therefore identify the strongest product-related drives, for example hunger may be identified for candy bars and status for motor vehicles.

2.2.3. (iv).The Freudian psychoanalytical model

The well-known Freudian model of human behavior, according to Kotler (in Gould, 1979: 39), is regarded to have a profound impact on 20th century thought, although it is labeled as being the latest in a series of philosophical "blows" to which man has been exposed in the past 500 years. Freud attacked the idea that man reigned over his own psyche, whereas preceding philosophical views by Copernicus and Darwin respectively destroyed the view that man was at the centre of the universe and opposed the idea that man was considered a special creation. Kotler (2000: 172) summarizes the theory by stating that Freud assumed that the psychological forces shaping people's behavior are largely unconscious, resulting in people not being able to fully understand their own motivations. Kotler (in Gould, 1979: 39) provides more detail on Freudian theory by explaining that, according to the theory, the child enters the world driven by instinctual needs that cannot be satisfied by itself. The child quickly and painfully realizes its detachment from the world and at the same time its dependence on it. Through blatant means, including supplication and intimidation, the child attempts to use others to satisfy its needs. Freudian theory further propagates that, as human beings grow, their psyche (called the id) remains the source for strong urges and drives. Solomon (1996: 134) adds by stating that the id is oriented toward immediate gratification, forming the "partly animal" portion of the brain. A second part, called the ego, develops into a conscious planning core where outlets for drives are uncovered, responsible (according to Solomon, 1996: 134) for mediating between the id and the superego. The superego, the final concept of the model, is responsible for the channeling of instinctive drives into socially acceptable outlets in order to avoid the pain associated with guilt and shame, referred to by Solomon (1996: 134) as the individual's conscience. The urges that human beings feel, especially sexual urges, cause shame and guilt and are therefore repressed from the conscious. A person therefore The Freudian model has been refined a number of times. Changes include the three parts of the psyche, where it is regarded as theoretical concepts rather than actual entities as well as the extension of the behavioural perspective to incorporate cultural and biological mechanisms. Kotler (in Gould, 1979: 40) continues by stating that instead of focusing on sexual urges in psychic development, like Freud who focused on oral, anal and genital stages together with possible fixations and traumas, other philosophers refined the theories of Freud. For example, Adler focused on the desire for power and the manifestation thereof in superiority and inferiority complexes; Horney Emphasized cultural mechanisms and Fromm and Erickson stressed existential crises in personal development. In conclusion, it should be noted that the philosophical divergences, as mentioned above, greatly enriched and extended the interpretative value of the Freudian model to a wide range of behavioral phenomena.

2.2.3. (iv).(a).Marketing applications of the Freudian model

Kotler (in Gould, 1979: 40) suggests that the most important marketing implication of the Freudian model that marketers should note, is that consumers are motivated by both symbolic and economic-functional product concerns. For example, the change of a bar of soap from a square to a round shape has probably more a sexual than functional connotation. A more practical example may show that an advertisement for a cake mix, depicting little effort and labour involved, may alienate housewives since the easy life may cause a sense of guilt. The importance of the model can also be viewed from a research perspective. While direct observation and interviewing can be used to obtain more superficial characteristics, for example age, gender and family income, these methods ofdevelops defence mechanisms, for example rationalization and sublimation, resulting in either the denial of such urges or the transformation thereof into acceptable social expressions. According to Freud, these urges are never eliminated or under perfect control and sometimes emerge, vigilantly, as slips-of­the-tongue, in dreams, in neurotic and obsessive behavior or eventually in mental breakdowns where the ego is not capable to maintain the balance between the oppressive power of the superego and the impulsive power of the id. A possible impact of the model, in practical terms, is that since the individual is not able to understand its own behavior, it is even more difficult for the casual observer to understand such behavior. For example, if a person is asked why a certain expensive vehicle is bought, the reply may be that the deciding factors were speed, comfort and appearance. At a deeper level, the reasons may include to impress others or to be young again. At an even deeper level, the motive for the purchase may be attributed to an attempt to achieve substitute gratification for unfulfilled sexual urges. Research cannot be used for establishing the mental state, which is believed to be deeply "buried" within an individual. A final benefit to marketing researchers is that motivational research can offer beneficial insights and inspiration in terms of advertising and packaging. Belch & Belch (2001: 112) support this view by stating that insights gained from motivational research can often be used as a basis for advertising messages aimed at deeply rooted feelings, hopes, aspirations and fears of consumers. Such emotional appeals are often more effective than rationally based appeals

2.2.3. (v).Maslow's hierarchy of needs

Maslow's well-known hierarchy of needs, although not classified as a model of human behavior, provides valued input to the theory of consumer behavior, since it provides theory on the motivation of human beings based on a hierarchy of human needs. The importance of motivation and needs within the study of consumer behaviour will be noticed when the models of consumer behaviour are discussed later in this chapter. Important to note, as will be seen is that the theory of the consumer decision-making process commences with the identification or recognition of a need, therefore underlying the importance of considering the hierarchy of needs theory by Maslow. According to Schiffman & Kanuk (1997: 95-96), Maslow's theory postulates five basic levels of human needs, ranging from lower-level (biogenic) needs to more important, higher-level (psychogenic) needs. Consumers, therefore, seek to first satisfy lower-level needs before attending to higher-level needs. Only once a lower-level need is satisfied, will a new (higher-level) need emerge, motivating the consumer to fulfill such a need. The process continues, leading the consumer to aspire to the fulfillment of higher-level needs, each time higher than the need before. Each level, as portrayed the above model, will be briefly discussed to differentiate between the levels. Physiological needs represent the most basic needs that are required to sustain life and include food, clothing and shelter. Safety and security needs concern more than physical safety and include order, certainty and control over the environment and own life. The third level, social needs (referred to as affiliation needs by Churchill & Peter, 1998: 143), refers to needs such as friendship, love, affection, belonging and acceptance. Egoistic needs (called esteem needs by Belch & Belch, 2001: 110 and Churchill & Peter, 1998: 143) comprise inwardly-directed needs (for example concerned with the individual's need for success, independence, self-acceptance and personal satisfaction with something well done) and outwardly-directed needs (including, for example, the need for reputation, status and prestige). The final and highest level of needs is that of self-actualization, implying the desire to fulfill one's potential, becoming everything an individual is capable of becoming. Worth mentioning is that Maslow believed that most people do not satisfy their egoistic needs sufficiently, thereby keeping them from ever moving to the final, self-fulfillment needs

2.2.3. (v) (a).comments on Maslow's hierarchy of needs

According to Schiffman & Kanuk (1997: 100) the major problem of Maslow's theory is that it cannot be tested empirically, implying that there is no means of measuring precisely how satisfied one need must be before a next, higher need becomes operative. Solomon (1994: 94) continues by stating that the influence thereof on marketing is somewhat Simplistic since, according to the theory, consumers first need to satisfy basic needs before progressing to higher-level needs, where one product can satisfy a number of different needs. In addition to the above, Solomon (1994: 94) and Schiffman & Kanuk (1997: 100) argue that the theory may be ulture-bound, perhaps restricting it to Western culture, or even only certain Western cultures, with other cultures possibly questioning the order of levels specified by the model. For example, Eastern cultures may regard the welfare of a group to be more valued than needs of an individual. Despite the criticism on the Maslow theory, Schiffman & Kanuk (1997: 100) believe that it is useful in marketing strategy, since it provides an understanding of consumer motivations, primarily because consumer goods often serve to satisfy each of the need levels. In addition to the above, the hierarchy offers a comprehensive framework for marketers when developing advertising appeals for their products. The theory is adaptable in two ways, firstly enabling marketers to focus advertising on a need level that is likely to be shared by a large segment of the intended audience and secondly, providing input to product positioning and repositioning. Solomon (1994: 94) indicates the relevance of the hierarchy of needs by stating that, rather than viewing consumer needs as a progression to higher-level needs, marketers should acknowledge that consumers have need priorities at different times. This view is supported by Walters (1974: 108) who states that the importance of needs to marketers is founded in the fact that motives for purchasing are established by needs. Next section is provided an overview of models of human behavior. The following section focuses on models of consumer behavior and will show how the shortcomings of the models of human behavior led to the formulation of models of consumer behavior.