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This report describes about consumer buying behaviour, including the consumer buying processes, factors influencing the behaviour of buyers, Maslow’s hierarchy of needs, types of buying behaviour, methods for marketers to gain the understanding of consumer buying behaviour, and the implications of learning consumer behaviour for marketing strategy. And at the end, author also developed some conclusions for the convenient for all the readers.
This report was made to fulfill one of many criteria to pass consumer behaviour module in Nanyang Institute of Management, Singapore.
Analyse and discuss this statement. In your discussion, make sure you address the following: Why is an understanding of buying behaviour so essential? How might marketers gain such an understanding? What are the implications of consumer behaviour for marketing strategy?
“Consumer behaviour is defined as the behaviour that consumers undertake in seeking, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their personal needs.”
The consumer buying process is a complex matter as many internal and external factors have an impact on the buying decisions of the consumer. When purchasing a product there are several processes, which consumers go through.
Consumer Behaviour is defined as activities people undertake when obtaining, consuming, and disposing of products and services. Simply stated, consumer behaviour has traditionally been thought of as the study of “why people buy” – with the premise that it becomes easier to develop strategies to influence consumers once a marketer knows the reason people buy specific products and brands.
Three primary activities are included in the definition of consumer behaviour – obtaining, consuming, and disposing.
Obtaining refers to the activities leading up to and including the purchase or receipt of a product. Some of these activities include searching for information regarding product features and choices, evaluating alternative products or brands, and purchasing.
Consuming means how, where, when, and under what circumstances consumers use products. For example, issues relating to consumption might include decisions about whether the consumers use products at home or at the office. Do they use products according to instructions and as intended or do they find their own unique ways of using products? Is the experience of using the product entertaining or purely functional? Do they use the entire product before disposing of it or is some of it never consumed?
Disposing refers to how consumers get rid of products and packaging. Consumer analysts might examine consumer behaviour from an ecological standpoint: How do consumers dispose of product packaging or product remains? Are products biodegradable? Can they be recycled? Consumers might also choose to extend the life of some products by handling them down to younger children, donating them to charity thrift shops, or selling them on eBay.
2.0 Reasons to Study Consumer Behaviour
Consumer Behaviour Determines the Economic Health of a Nation
Every day, in every country around the world, an election is held. The election is not about which political parties will be leading a nation. Rather, consumers are voting on which nation and firms win, and they do it with their dollars, euros, and yen. With their money, consumers elect the retailers and other marketers they want to survive and be profitable enough to provide jobs for a nation’s citizens. With their votes, consumers determine which people will have good jobs or bad jobs, and which will have no jobs at all. Ultimately, consumers determine which companies will have rising share prices and which will go out of business.
Consumer Behaviour Determines the Success of Marketing Programs
People who study consumer behaviour generally desire to influence or change the behaviour of consumers in some way. Some marketer, such as consumer products, manufacturers, want to use marketing to influence brand choice and purchase, whereas others, such as public health advocates, use demarketing to influence people to stop smoking or abstain from illegal drugs.
The Consumer is King
Knowing why and how people consume products helps marketers understand how to improve existing products, what types of products are needed in the marketplace, and how to attract consumer to buy their products. Without customer satisfaction, organizations are unlikely to increase sales and, without increased sales, organizations won’t have resources to invest in important components of customer satisfaction programs.
Only the Customers Can Fire Us All
Consumers ultimately determine which organizations thrive and which ones fail. When consumers make purchase decisions, they are voting for the candidates they want to survive in today’s hypercompetitive marketplace. The power of the consumer is immense, and the desire of major firms to understand consumer is huge. Firms must truly understand customers and the reasons for their behaviour.
Consumer Behaviour Determines the Economic Health of Everyone
Your decisions as a consumer determine your own economy health, which may be the most important reason to study consumer behaviour. Anyone can benefit from money-saving strategies and tips on how to be “better shoppers”, but educational program should be based on research into motivation and behaviour if they are to be relevant in the real world of consumer life.
Consumer Behaviour Helps Formulate Public Policy
Organizations and individuals interested in public policy must understand the needs of consumers when formulating policies relating to economics, social welfare, family planning, or nearly any other subject. They also need to know how to predict the behavioural changes that will follow their policies.
Consumer Behaviour Affects Personal Policy
Personal policy includes how you behave (toward others and in buying situations), your values and beliefs, and how you live your life. A person’s economic quality of life is determined by personal policy. What you have in life is determined more by how much you save (and how little you spend) than how much you earn.
3.0 Maslow’s Hierarchy of Needs
Abraham Maslow hierarchy of needs theory sets out to explain what motivated individuals in life to achieve. He set out his answer in a form of a hierarchy. He suggests individuals aim to meet basic psychological needs of hunger and thirst. When this has been met they then move up to the next stage of the hierarchy, safety needs, where the priority lay with job security and the knowing that an income will be available to them regularly. Social needs come in the next level of the hierarchy, the need to belong or be loved is a natural human desire and people do strive for this belonging. Esteem need is the need for status and recognition within society, status sometimes drives people, the need to have a good job title and be recognised or the need to wear branded clothes as a symbol of status.
Self-actualisation the realisation that an individual has reached their potential in life. The point of self-actualisation is down to the individual, when do you know you have reached your point of self-fulfilment.
Marketing is about meeting needs and providing benefits, Maslow’s concept suggests that needs change as we go along our path of striving for self-actualisation. Supermarket firms develop value brands to meet the psychological needs of hunger and thirst. Harrods develops products and services for those who want have met their esteem needs. So Maslows concept is useful for marketers as it can help them understand and develop consumer needs and wants.
4.0 Types of buying behaviour.
There are four typical types of buying behaviour based on the type of products that intends to be purchased. Complex buying behaviour is where the individual purchases a high value brand and seeks a lot of information before the purchase is made. Habitual buying behaviour is where the individual buys a product out of habit e.g. a daily newspaper, sugar or salt. Variety seeking buying behaviour is where the individual likes to shop around and experiment with different products. So an individual may shop around for different breakfast cereals because he/she wants variety in the mornings! Dissonance reducing buying behaviour is when buyer are highly involved with the purchase of the product, because the purchase is expensive or infrequent. There is little difference between existing brands an example would be buying a diamond ring, there is perceived little difference between existing diamond brand manufacturers.
5.0 Methods for Marketers to Gain the Understanding of Consumer Buying Behaviour
An observational approach to consumer research consists primarily of observing consumer behaviours in different situations. This process might include observing how consumers react to different advertisements, packaging, or colours.
2. Interviews and Surveys
Surveys are an efficient way of gathering information from a large sample of consumers by asking questions and recording responses. Surveys can be conducted by mail, telephone, Internet, or in person, with each method having some advantages and disadvantages.
Experimentation, as a research methodology, attempts to understand cause and effect relationships by carefully manipulating independent variables to determine how these changes affect dependent variables.
4. Consumption Research
Consumption research focuses on how people use products rather than how they buy them, and can involve any of the research methods described. This approach often requires researchers to get inside people’s homes or other places to understand how lifestyles, values, and societal trends affect usage patterns of consumers.
6.0 The Implication of Learning Consumer Behaviour for Marketing Strategy
6.1 Consumers and the Marketing Concept
Consumer behaviour is dynamic – changing and evolving. This means that many statements about consumer behaviour will, eventually, become irrelevant as fashions in thought and social conditions change. Even the briefest examination of human cultures worldwide will show that there are very few absolute rules to human behaviour , and that new ideas and approaches are constantly being adopted.
Consumer behaviour involves interactions: we need to know what consumers think (cognition), what they feel (affect), what they do (behaviours), and the things and place that influence and are influenced by what they think, feel, and do (environment). Clearly thoughts and emotions colour behaviour; but behaviour itself leads to other related behaviour.
Consumer behaviour involves exchanges between human beings. Trade can only happen when both parties end up better off; if this were not so, people would not want to trade. For example, a consumer going to the pub would rather have the beer than the money it costs to buy it, but the landlord would rather have the money than the beer. By the end of the evening, both parties feel considerably better off as a result of the transactions.
(Source : Adrian Buckley, 1997)
6.2 Consumer and the 7Ps
What products are the consumers using at the present? What do they like about the products, and what don’t they like about them? What would they like the products to do, in addition to what they do already?
Where would they like to buy our product from? Where do they currently buy this type of product, and why? Is it confident for them to buy from this source? Could we make it easier for them to buy our product by offering it through a different outlet?
What price will they see as good value? This is not necessarily the lowest price; very few consumers consistently buy the cheapest products they can find. However, most have a very clear idea of what represents good value for money.
What type of promotion will interest them? Which will encourage them to buy? Which addresses their needs, in terms of activating the need and offering a credible way of satisfying it?
Business is not about money, it is about people. The people who run businesses and deal with the public need to understand how other people react in purchasing situations. In some cases, the product is the person; people become loyal to the same hairdresser, the same doctor, the same restaurant chef.
The way services are delivered affects the circumstances in which people buy as well as their propensity to buy. A meal out might be ten-minute lunch stop at a fast-food outlet, or it might be a romantic dinner for two in an upmarket restaurant. The process is completely different in each case, and so is the price: in the first case, the consumer may only go through a limited problem-solving process. In the second case the process may well be longer because the need to get it right is greater. This is called ‘involvement’.
Physical aspects of the service experience often relate to the pleasure one feels from receiving the service rather than the practical aspects. The surroundings in a restaurant, the food itself, the décor, the table linen and cutlery all from part of the service and provide part of the pleasure of dining out.
Consumer behaviour is the result of many factors, including affect, cognition, conation, environment, and behaviour itself. Marketing is about finding out what people need and seeing that they get it, as a profit.
There are five stages of consumer purchase behaviour
â€¢ Problem/Need Recognition
â€¢ Information search.
â€¢ Evaluation of purchases.
â€¢ Purchase decision.
â€¢ Post purchase behaviour.
To understand the consumer behaviour better, a marketer can do some researches such as by observation, using surveys and interviews, experimentation, or by measuring the consumption rates.
Consumer behaviour changes over time, so company have to keep monitoring their customers to ensure that their needs are being met. If you ignore your customers, your customers will ignore you.
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