Schools Of Thoughts On Consumer Behaviour

2.1 Introduction

The purpose of this chapter is to highlights the significance of buyer’s behaviour in today’s global market. Consumer buyer’s behaviour plays a key role in the success of any business. This chapter initially defines consumer buying behaviour. Environmental factors related with consumer behaviour. It also highlights the individual factors affecting buying behaviour. It also explains Maslow Hierarchy of needs.

2.2 Schools of thoughts on Consumer Behaviour

The buying behaviour indicates to the behaviour of end users that is individuals and households who purchase goods and services for personal use. These final purchasers combine to form consumer markets. All of individuals and households who buy or acquire goods and services for personal consumptions.(Kotler, Armstrong ,2004, p 178).

Hoyer and Macinnis (2008, p) stated that “Consumer behaviour reflects the totality of consumers’ decisions with respect to the acquisition, consumption, and disposition of goods, services, activities, experiences, people, and ideas by (human) decision-making units{over time}.”

The concept of consumer behaviour mainly depends upon psychologists, sociologists and social anthropologists. In global context social history also offers important insights into consumer buying behaviour, since we need to understand the cultural background of another country or region if we are to be successful there. (Bohdanowicz, Clamp, p 14)

2.3 Environmental influences

The environmental factors of consumer behaviour are enlisted and described below

Culture

The term culture can be defined as bulk of complex symbols and artefacts generated by man and transferred down through generations as regulators of behaviour in a society. These sign consist of attitudes, beliefs, values, language and religion. It also consists of music and art, food, housing and product preferences. Culture is learned behaviour that has been passed down with time (Lancaster, Reynolds, pg 57-60)

Behaviour is learned, culture explains the broad values and attitudes for an individual. Culture can be investigated by using an inventory of values. Some of the other aspects of socio-cultural environment include sub-culture, social class, and group and family influences

Sub culture

Subculture can be defined as a unique group that exists as an identifiable segment within a broader, complex society. Individuals of a subctulture has certain values , beliefs and trades that separate them from other individuals of the same society. It is significant for marketers to analyze subculture where they are marketing any product in order to focus on sizable and natural market segment.

Before marketing a product a marketer should study the beliefs, values and trade of particular sub group in order to analyze that whether their product(s) coincide or contradict with their beliefs and norms. Gender, nationality ,geographic location, race and age are some categories of subculture.

A society cultural profile consist of two elements which are a) beliefs and values associated with people of particular subcultures b)Main culture theme that are shared by most of the people irrespective of particular sub-cultural memberships. Every subculture has its distinct traits, yet each shares the dominant traits of the overall culture.

(Tyagi, Kumar, 2004, p 88-92)

Combining individuals and families who have same social and economic conditions. Members of the same social class exhibits same pattern of behaviour and have similar values and interests. The parameters for grouping are occupation, education or income.

Researchers In Britain traditionally used occupation as the basis to identify and combine various social classes.( Lancaster et al,2002, pg 76). It can be shown in the table form as under:

Social class

Types of Occupation

AB

Managerial and Professional

C1

Supervisory and clerical

C2

Skilled manual

DE

Unskilled manual and unemployed

Source (Lancaster et al,2002, pg 76)

Reference groups

A reference groups in the context of consumer behaviour is termed as a groups to which an individual belongs. Such membership is preferred as a point of comparison with another possible group. (Majumdar, 2010, pg 142)

Reference groups have a direct or an indirect effect on buyers behaviour. Main reference group categories are :

Membership groups ƒ  individual already belongs to

Aspirational groups ƒ  individual would like to join

Disassociative groups ƒ  rejected by individual

Aspirational and membership groups influence people in a variety of ways of interest to marketers.

These two vital groups give an exposure of new products and behaviour to consumers, effect buyers attitudes and self-concept and create pressures to conform to group values.

Some of factors which influence are :

The binding of the group with highly cohesive groups like religious cult which forces more influence.

Consumer being affected by norms and values, with “other-directed” people, who adpt values of reference groups more likely to be influenced than ” inner-directed” people, who act more on individual values.

The product concept with group influence strongest when products are highly visible and can be seen in use, as with MM systems.

Reference groups based on age, gender and family are of great interest to international marketers in which they are operating.

Marketing By Richard L. Sandhusen. 2008 4th Edition

(Sandhusen, 2008, pg 244-45)

(Lancaster, et al, pg 73- 103)

The most influential reference group is the family because of its strong binding which influence the individuals within the group. The life cycle of family consist of six phases. The behaviour of consumers in each stage is described below :

Unmarried : This group possess high disposable income and low financial bounding. These young consumer are more fashion aware. This segment is therefore a very crucial market for many new and innovative products

Young newly married couples- no children: A consumer in this particular group focuses mainly on the items necessary for setting up a home.

Young married couples with children: Consumer are more children-oriented and there is less cash for luxury products. Although they welcome new creative ideas. while making purchases they see their economy.

Older married couple still with children at home: Consumers durable, including items of furniture are replaced by are often replaced at this stage. Buying are made with different motivation to original motivations of strict functionality and finances that was required at an earlier life cycle stage.

Older married couple with no children at home: Consumers in this particular group have a constant buying habit. Disposable income is high. Buyers in this particular group are reluctant to new products so the best strategy for marketers is to add value and refine existing products rather than introducing new ones.

Older retired couples and single people: buying is low and patterns of purchasing are predictable and conservative. There is a high increase in this group. such people tend to less dependent solely on state pensions are subscribed for occupational pensions from former employers which boosts their overall pensions.

source : (www.marketingmasters.geoff/buyers behaviour)

Situational factors

Situational factors include ease and variety as a vital player for online shopping (Rohm and Swaminathan, 2004). The most crucial attractions of e-purchasing is perceptions of convenience (Evanschitzky et al., 2004; Szymanski and Hise, 2000). A decrease in the cost of search when buyer is under time influence (Bakos, 1991; Beatty and Smith, 1987).Convenience is one of the key factor which effects e-satisfactions of consumers (Kim et al., 2009). Convenience in online buying boost efficient searching by cutting travel cost and mental hassle. Retailers on internet vary themselves by stressing on convenience factor (Jayewardene, 2004). Situational factors like variety, ease, frequency of buying and particular individual conditions have significant impact on buyers attitude towards an e-retailer. ( Hand et al, 2009,p 16).

2.4 Individual influences

Consumer behaviour is affected by internal, personal and interpersonal factors . Every individual has distinct wants, motives, attitudes, perceptions, self concepts and learned responses towards buying process.

The major individual influences are:

2.4.1 Psychological factors

A number of complex behavioural factors come under this section. They include perception, motivations, attitudes and personality.

Perception

Perception allows an individual to choose and organize environmental stimuli that provide him or her meaningful experience to take a decision. It is a process by which people receive, organize and interpret the incoming stimuli obtain through their sensory system that is sight, hearing, smell, taste and touch.

(Sahaf, 2008, p 107)

Needs and Motives

The aim of individual buyer behaviour is to fulfil a perceived need. The imbalance between consumer’s real and desired states is defined as Need. A consumer who identifies a crucial need will then try to fulfil the need. Marketers attempt to arouse sense of urgency by making a need felt and then affecting buyers’ motivation to fulfil their needs by buying particular products.

Motives are inner states that direct an individual towards the goal of satisfying a desired need. Individual takes action to decrease condition of tension and return to a state of balance. (Kurtz et al,2010, p 140-150)

Reference:

Contemporary Marketing

By David L. Kurtz, H. F. MacKenzie, Kim Snow pg 140 -150

By Boone Kurtz MacKenzie Snow 2nd Canadian Edition 2010/2007

attitude

Attitude explains an individual/buyer’s consistently favourable or unfavourable evaluations, feelings and tendencies towards an object or idea. (Kotler, Armstrong, 2004, pg 196)

Personality

Personality strongly influences buying behaviour and objective of buying behaviour analysis will be to identify what kind of products or services might appeal to different personality types. (Armstrong, 2006, p 45)

A handbook of management techniques: a comprehensive guide to achieving…

By Michael Armstrong 2006

Belief

A belief is a detailed thought that an individual hold about something.

(Kotler, Armstrong, 2004, pg 196)

Self-concept

A buyer willing to make buying that fulfils their own image so that they can protect and boost it.

Learning

Learning explains changes in a person’s behaviour arising from experience. Experts predict/say that most human behaviour is learned. Learning occurs through the interplay of drives, stimuli, cues, responses and reinforcement.

(Kotler, Armstrong, 2004, p 195)

2.4.2 Lifestyle factors

These are the individual’s activities, interests and opinions. An individual’s lifestyle explains that in what manner an individual interacts with his or her surroundings. This will have affects on buying behaviour. Lifestyle variables are frequently being used in segmentation and targeting.

2.4.3 Demographics factors

These factors defines people on the basis of age, sex, income, education and profession. Demographic variables depend upon the types of product consumer want, where they shop and how they estimate possible purchases.

2.4.4 The economic condition

The economic factors not only focus upon the income level of consumers but also their lending power and behaviour towards spending. The economic situation of people is of high concern to the marketer when planning their marketing strategies.

(Lancaster et al, 2002, p 78-79)

2.5 Maslow’s Hierarchy of Needs

While discussing Maslow’s Hierarchy of needs(Maslow, 1943) it is found that there are five aims of the theory which are called primary needs. The theory consist of physiological, safety, love, esteem and self actualization needs. According to Maslow human beings want to become self-actualizing (Stephens, 2000)

(Tikkanen, 2009, pg 534-544)

Maslow’s hierarchy and pupils’ suggestions for developing school meals

Irma Tikkanen

Department of Business and Management, University of Kuopio, Kuopio,

Finland, and Helsinki Polytechnic Stadia, Helsinki, Finland

Stephens, D.C. (Ed.) (2000), The Maslow Business Reader: Abraham H. Maslow, John Wiley & Sons, New York, NY.

Maslow’s Hierarchy of Needs

C:UsersyasirDesktopmaslow-hierarchy-of-needs.gif

Source:( www.google.co.uk)

Physiological needs

These are the basic needs necessary for human survival like needs for food, water, shelter, rest and sex etc. These needs are normally linked with the money. Buyers utilize money to achieve their needs and motives. Therefore money is used as a key to fulfil most of the physiological needs.

Safety needs

As far as physiological needs are reasonably fulfilled, an individual safety needs are active. An individual requires safety when encounter with some physical danger. Safety needs include security from loss of satisfaction of primary needs, loss of job, shelter, food etc. Everyone wants to remain free from dangers of life like economic problems, accidents, wars etc.

Social needs

Once an individual physiological and security need are satisfied, then he or she craves for love and sense of belonging. Human is a social animal and desires to constructs meaningful relationship with others. The corporations which offer their markets to customer in context of relationship marketing would experience positive feedback from customers. Many corporations offered consumer loyalty and membership programmes in order to fulfil social needs of their customers. Some individuals act more effectively than other and stronger in particular conditions.

Ego needs

Ego or esteem needs are call for recognition of one’s achievements and contributions. These needs can be classified into two types. Firstly Self-esteem needs which include self-confidence, independence, achievement, self-respect and Self-reputation needs include status, recognition appreciation. It can be activate only when lower level needs are reasonably fulfilled.

Self-actualization needs

These needs are at the peak of Maslow’s hierarchy of needs. These needs are concerned with the desire to become what an individual of capable of becoming. They are associated to one’s self-development and realization. An individual wants to show his or her talent through creative work. Such needs as is true of the esteem needs are seldom if ever fulfilled. Therefore many people influence by their self-actualization needs in order to strive the fullest development of their potential.(Sahaf , 2008, p 104-105)

Reference: Strategic Marketing: Making Decisions For Strategic Advantage

By Sahaf pg 104 ed 2008

2.6 Models of Consumer behaviour

Some of the models of consumer behaviour are described below:

2.6.1 AIDA Model of buying behaviour

AIDA model was initially presented by E.K.Strong in 1925 and it is still useful because of the simplicity of the model. This model describes the activities involved in the buyer decision process. (http://www.marketingmasters.co.uk/geoff)

The AIDA model of buying behaviour follows a sequential problem solving process which is drawn below:

AIDA Model of buying behaviour

source (www.marketingmasters.co.uk)

Clemente (2002) It is a response hierarchy model illustrating the stages through which a purchaser learns about a product and desire to buy that particular product or service. The AIDA model is used to determine communications targets, that is the advertiser desired response of its marketing communications may be one of these four options : to build product or service awareness, to raise the buyer’s curiosity or interest, to encourage them to purchase or to move them to purchase.

The Marketing Glossary: Key Terms, Concepts and Applications

By Mark N. Clemente 2002 pg 26

2.6.2 The buyer decision model

Robinson, Faris and Wind in 1967 put forward a model that monitored buying as a problem. This model describes the activities involved in the buying process (www.marketingmasters.co.uk). In buyer decision the buyer passes through five stages which are problem recognition, information search, evaluation of alternatives, purchase decision and post-purchase behaviour. The purchasing process starts long before the actual purchase and has affects long after buying process.

The Buyer Decision Model

source (www.marketingmasters.co.uk)

The purchase process initiates when a purchaser identifies a problem or need occurred by internal or external stimuli. With an internal stimulus, one of the individual’s normal needs like hunger, thirst, sex rises to an optimum level and becomes a drive or a need can be aroused by external stimulus. It has been noticed that buyers normally search for limited amounts of information. Studies have shown that half of all consumers look at only one shop and only 30 percent of buyers look at more than one shop.(Kotler et al, 2009, p 246-254)

Marketing Management By Philip Kotler, Kevin Lane Keller, Mairead Brady, Malcolm Goodman, Torben Hansen 2009

2.7 The Buying Decision Process

The buying decision process mainly depend on Role of purchase within the decision making unit, Kind of buying behaviour and the decision process.

The buying roles

To identify potential buyer in most of the cases, and for majority of items and services is comparatively easy task. The process of what to buy involves several people. The five distinct buying roles are:

Initiator , who initially suggests purchasing the service or item

Influencer, whose comment affect the decision made.

Decider, who ultimately makes all or part of the buying decision.

Buyer , who makes buying

User(s), who utilise(s) the product or service.

(Gilligan, Wilson, 2009, p 211)

Strategic Marketing Planning

By Colin Gilligan, Richard M. S. Wilson 2009 2nd

2.7.1 Types of buying decision behaviour

An individual exhibits different pattern of behaviour due to perceived risk. Consumer interest is high when the perceived is high and low when it is low.

Assael(1987) catagorized four types of buying behaviour, based on the following two parameters.

Degree of buyer involvement (high and low)

Degree of difference among brands ( significant and non significant)

(Dogra, 2007, pg 67)

Rural Marketing By Dogra

Complex buying behaviour

When consumer are highly involved in a buying decision and aware of vital differences among brands. This is condition when the product is expensive, available less, contains/involve risk and is self-expensive for example cars, computers, furniture etc. Purchasers required help in learning about products’ attributes and benefits.

Dissonance-reducing behaviour

In this case purchasers are highly involved in buying process but carry an opinion that there are few differences exist between the brands. The buyer will look around to determine what is available on the market, but will purchase reasonably fast ( for example, lawn mowers or carpets).

Habitual buying behaviour

In this case individuals show less involvement. Here vital brand differences are missing. Purchasers are not brand loyal and purchase out of routine (for example salt, milk and bread). These items are usually frequently required products and cheap.

Variety-seeking buying behaviour

In this case buying conditions are distinguished by notable brand difference but low buyer’s participation. In order to seek new varieties, purchasers do frequent brand switching(for example entertainment, restaurants, take-away food)

Routine decision-making

This situation occurs when a purchaser without thinking about it, regularly buys the same branded items. This association to particular brands is the outcome of the extended decision-making process of the previous period. It reduces the repetition of the decision making process every time a product is required, thus

Simplifying the buying task. Some of the examples are household goods which must be restocked regularly such as toiletries, detergents, margarine etc.

Impulsive decision-making

This implies/ unplanned action on the spur of the moment, in contrast to the purposeful planning which takes place in real decision-making. This is not entirely true. In impulsive decision-making, the consumer also progresses through all the phases of the decision making process.

Normally action follows immediately after the decision has been reached, and to a bystander it seems as if planning (which includes purposefully searching for evaluating information) did not precede the action. (Cant et al,2009, p 63-66)

Marketing Management By M. C. Cant, J. W. Strydom, C. J. Jooste 2009 5th edition

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