Unit 1: Introduction the Consumer Behavior LH 6

1.1.Defining Consumer behavior;

1.2.Why Study Consumer Behavior?
1.3.Applying Consumer Knowledge:
1.3.1. Consumer behavior and Marketing management;
1.3.2. Consumer Behavior and Social marketing,
1.3.3. Consumer and Governmental decision making,
1.3.4. Consumer Behavior and De-marketing;
1.4.Modeling behavior:
1.4.1. Internal Variables,
1.4.2. External Variables and
1.4.3. Decision-making Process.

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Unit 1: Introduction the Consumer Behavior LH 6

1.1. Defining Consumer behavior;

What is the study of consumer behavior?

One "official" definition of consumer behavior is "The study of individuals, groups, or organizations and
the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to
satisfy needs and the impacts that these processes have on the consumer and society."

Consumer Behavior: Meaning/Definition and Nature of Consumer Behavior!

Meaning and Definition:

What do you mean by consumer behavior?

Consumer behavior is the study of how individual customers, groups or organizations select, buy, use,
and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the
consumers in the marketplace and the underlying motives for those actions.

Marketers expect that by understanding what causes the consumers to buy particular goods and services,
they will be able to determine - which products are needed in the marketplace, which are obsolete, and how
best to present the goods to the consumers.

The study of consumer behavior assumes that the consumers are actors in the marketplace. The perspective
of role theory assumes that consumers play various roles in the marketplace. Starting from the information
provider, from the user to the payer and to the disposer, consumers play these roles in the decision process.

The roles also vary in different consumption situations; for example, a mother plays the role of an influencer
in a child’s purchase process, whereas she plays the role of a disposer for the products consumed by the
family.

Some selected definitions of consumer behavior are as follows:

1. According to Engel, Blackwell, and Mansard, ‘consumer behavior is the actions and decision processes
of people who purchase goods and services for personal consumption’.
2. According to Louden and Bitta, ‘consumer behavior is the decision process and physical activity, which
individuals engage in when evaluating, acquiring, using or disposing of goods and services’.

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 1.2. Why Study Consumer Behavior?

Nature of Consumer Behavior:

1. Influenced by various factors:

The various factors that influence the consumer behavior are as follows:

a. Marketing factors such as product design, price, promotion, packaging, positioning and distribution.
b. Personal factors such as age, gender, education and income level.
c. Psychological factors such as buying motives, perception of the product and attitudes towards the product.
d. Situational factors such as physical surroundings at the time of purchase, social surroundings and time factor.
e. Social factors such as social status, reference groups and family.
f. Cultural factors, such as religion, social class—caste and sub-castes.

2. Undergoes a constant change:

Consumer behavior is not static. It undergoes a change over a period of time depending on the nature of
products. For example, kids prefer colorful and fancy footwear, but as they grow up as teenagers and young
adults, they prefer trendy footwear, and as middle-aged and senior citizens they prefer more sober footwear.
The change in buying behavior may take place due to several other factors such as increase in income level,
education level and marketing factors.

3. Varies from consumer to consumer:

All consumers do not behave in the same manner. Different consumers behave differently. The differences
in consumer behavior are due to individual factors such as the nature of the consumers, lifestyle and culture.
For example, some consumers are technophilic. They go on a shopping and spend beyond their means.

They borrow money from friends, relatives, banks, and at times even adopt unethical means to spend on
shopping of advance technologies. But there are other consumers who, despite having surplus money, do
not go even for the regular purchases and avoid use and purchase of advance technologies.

4. Varies from region to region and country to county:

The consumer behavior varies across states, regions and countries. For example, the behavior of the urban
consumers is different from that of the rural consumers. A good number of rural consumers are conservative
in their buying behaviors.

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The rich rural consumers may think twice to spend on luxuries despite having sufficient funds, whereas the
urban consumers may even take bank loans to buy luxury items such as cars and household appliances. The
consumer behavior may also vary across the states, regions and countries. It may differ depending on the
upbringing, lifestyles and level of development.

5. Information on consumer behavior is important to the marketers:

Marketers need to have a good knowledge of the consumer behavior. They need to study the various factors
that influence the consumer behavior of their target customers.

The knowledge of consumer behavior enables them to take appropriate marketing decisions in
respect of the following factors:

a. Product design/model
b. Pricing of the product
c. Promotion of the product
d. Packaging
e. Positioning
f. Place of distribution

6. Leads to purchase decision:

A positive consumer behavior leads to a purchase decision. A consumer may take the decision of buying a
product on the basis of different buying motives. The purchase decision leads to higher demand, and the
sales of the marketers increase. Therefore, marketers need to influence consumer behavior to increase their
purchases.

7. Varies from product to product:

Consumer behavior is different for different products. There are some consumers who may buy more
quantity of certain items and very low or no quantity of other items. For example, teenagers may spend
heavily on products such as cell phones and branded wears for snob appeal, but may not spend on general
and academic reading. A middle- aged person may spend less on clothing, but may invest money in savings,
insurance schemes, pension schemes, and so on.

8. Improves standard of living:

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The buying behavior of the consumers may lead to higher standard of living. The more a person buys the
goods and services, the higher is the standard of living. But if a person spends less on goods and services,
despite having a good income, they deprive themselves of higher standard of living.

9. Reflects status:

The consumer behavior is not only influenced by the status of a consumer, but it also reflects it. The
consumers who own luxury cars, watches and other items are considered belonging to a higher status. The
luxury items also give a sense of pride to the owners.

1.3. Applying Consumer Knowledge:

1.3.1. Consumer behavior and Marketing management;
1.3.2. Consumer Behavior and Social marketing,

What is Marketing Management all about?

Marketing Management is the leading marketing text because its content and organization consistently
reflect changes in marketing theory and practice. The very first edition of Marketing Management,
published in 1967, introduced the concept that companies must be customer-and-market driven. But there
was little mention of what have now become fundamental topics such as segmentation, targeting, and
positioning. Concepts such as brand equity, customer value analysis, database marketing, e-commerce,
value networks, hybrid channels, supply chain management, and integrated marketing communications
were not even part of the marketing vocabulary then. Marketing Management continues to reflect the
changes in the marketing discipline over the past 40 years.

Firms now sell goods and services through a variety of direct and indirect channels. Mass advertising is not
nearly as effective as it was, so marketers are exploring new forms of communication, such as experiential,
entertainment, and viral marketing. Customers are telling companies what types of product or services they
want and when, where, and how they want to buy them. They are increasingly reporting to other consumers
what they think of specific companies and products—using e-mail, blogs, podcasts, and other digital media
to do so. Company messages are becoming a smaller fraction of the total “conversation” about products
and services.

In response, companies have shifted gears from managing product portfolios to managing customer
portfolios, compiling databases on individual customers so they can understand them better and construct
individualized offerings and messages. They are doing less product and service standardization and more
niching and customization. They are replacing monologues with customer dialogues. They are improving

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their methods of measuring customer profitability and customer lifetime value. They are intent on
measuring the return on their marketing investment and its impact on shareholder value. They are also
concerned with the ethical and social implications of their marketing decisions.

As companies change, so does their marketing organization. Marketing is no longer a company department
charged with a limited number of tasks—it is a company-wide undertaking. It drives the company’s vision,
mission, and strategic planning. Marketing includes decisions like who the company wants as its customers,
which of their needs to satisfy, what products and services to offer, what prices to set, what communications
to send and receive, what channels of distribution to use, and what partnerships to develop. Marketing
succeeds only when all departments work together to achieve goals: when engineering designs the right
products; finance furnishes the required funds; purchasing buys high-quality materials; production makes
high-quality products on time; and accounting measures the profitability of different customers, products,
and areas.

To address all these different shifts, good marketers are practicing holistic marketing. Holistic marketing is
the development, design, and implementation of marketing programs, processes, and activities that
recognize the breadth and interdependencies of today’s marketing environment. Four key dimensions of
holistic marketing are:

1. Internal marketing—ensuring everyone in the organization embraces appropriate marketing

principles, especially senior management.
2. Integrated marketing—ensuring that multiple means of creating, delivering, and communicating value
are employed and combined in the best way.
3. Relationship marketing—having rich, multifaceted relationships with customers, channel members,
and other marketing partners.
4. Performance marketing—understanding returns to the business from marketing activities and
programs, as well as addressing broader concerns and their legal, ethical, social, and environmental
effects.

These four dimensions are woven throughout the book and at times spelled out explicitly. The text
specifically addresses the following tasks that constitute modern marketing management in the 21st century:

1. Developing marketing strategies and plans

2. Capturing marketing insights and performance
3. Connecting with customers
4. Building strong brands
5. Shaping the market offerings

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6. Delivering and communicating value
7. Creating successful long-term growth

What is Consumer Behavior in Marketing?

Marketing is so much more than creating a catchy phrase or a jingle people will sing for days.
Understanding consumer behavior is a vital aspect of marketing. Consumer behavior is the study of how
people make decisions about what they buy, want, need, or act in regards to a product, service, or company.
It is critical to understand consumer behavior to know how potential customers will respond to a new
product or service. It also helps companies identify opportunities that are not currently met.

A recent example of a change in consumer behavior is the eating habits of consumers that dramatically
increased the demand for gluten-free (GF) products. The companies that monitored the change in eating
patterns of consumers created GF products to fill a void in the marketplace. However, many companies did
not monitor consumer behavior and were left behind in releasing GF products. Understanding consumer
behavior allowed the pro-active companies to increase their market share by anticipating the shift in
consumer wants.

The Three Factors

To fully understand how consumer behavior affects marketing, it's vital to understand the three factors that
affect consumer behavior: psychological, personal, and social.

Psychological Factors

In daily life, consumers are being affected by many issues that are unique to their thought process.
Psychological factors can include perception of a need or situation, the person's ability to learn or
understand information, and an individual's attitude. Each person will respond to a marketing message
based on their perceptions and attitudes. Therefore, marketers must take these psychological factors into
account when creating campaigns, ensuring that their campaign will appeal to their target audience.

Personal Factors

Personal factors are characteristics that are specific to a person and may not relate to other people within
the same group. These characteristics may include how a person makes decisions, their unique habits and
interests, and opinions. When considering personal factors, decisions are also influenced by age, gender,
background, culture, and other personal issues.

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For example, an older person will likely exhibit different consumer behaviors than a younger person,
meaning they will choose products differently and spend their money on items that may not interest a
younger generation.

Social Factors

The third factor that has a significant impact on consumer behavior is social characteristics. Social
influencers are quite diverse and can include a person's family, social interaction, work or school
communities, or any group of people a person affiliates with. It can also include a person's social class,
which involves income, living conditions, and education level. The social factors are very diverse and can
be difficult to analyze when developing marketing plans.

However, it is critical to consider the social factors in consumer behavior, as they greatly influence how
people respond to marketing messages and make purchasing decisions. For example, how using a famous
spokesperson can influence buyers.

Consumer Behavior Models

Through research and observation, several models have been developed that help further explain why
consumers make decisions, including the black box, personal variables and complex models.

The black-box model is based on external stimulus-response, meaning something triggers the consumer to
make buying decisions that are influenced by many factors, including marketing messages, sampling,
product availability, promotions, and price.

When influenced by the personal-variable model, consumers make decisions based on internal factors.
These internal factors may include personal opinions, belief systems, values, traditions, goals, or any other
internal motivator.

The third consumer behavior model is the complex model. The complex model considers both internal and
external variables.

CONSUMER BEHAVIOR: THE PSYCHOLOGY OF MARKETING

The study of consumers helps firms and organizations improve their marketing strategies by understanding
issues such as how

• The psychology of how consumers think, feel, reason, and select between different alternatives (e.g.,
brands, products, and retailers);
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• The psychology of how the consumer is influenced by his or her environment (e.g., culture, family,
signs, media);
• The behavior of consumers while shopping or making other marketing decisions;
• Limitations in consumer knowledge or information processing abilities influence decisions and
marketing outcome;
• How consumer motivation and decision strategies differ between products that differ in their level of
importance or interest that they entail for the consumer; and
• How marketers can adapt and improve their marketing campaigns and marketing strategies to more
effectively reach the consumer.

Consumer behavior involves the study of how people--either individually or in groups--acquire, use,
experience, discard, and make decisions about goods, services, or even lifestyle practices such as socially
responsible and healthy eating. As an evolving phenomenon, one should not be overly dogmatic about this
definition. Numerous alternatives, each taking a slightly different angle and emphasizing different aspects.
However, the scope presented here suggests that:

• The behavior occurs either for the individual, or in the context of a group (e.g., friends influence what
kinds of clothes a person wears, or family tradition influences which brand of laundry detergent is
bought).
• Consumer behavior involves the use and disposal of products as well as the study of how they are
purchased. Product use is often of great interest to the marketer, because this may influence how a
product is best positioned or how we can encourage increased consumption. Since many environmental
problems result from product disposal (e.g., motor oil being sent into sewage systems to save the
recycling fee, or garbage piling up at landfills) this is also an area of interest.
• Consumer behavior involves services and ideas as well as tangible products.
• The impact of consumer behavior on society is also of relevance. For example, aggressive marketing
of high fat foods, or aggressive marketing of easy credit, may have serious repercussions for the national
health and economy.

There are four main applications of consumer behavior:

• The most obvious is for marketing strategy—i.e., for making better marketing campaigns. For example,
by understanding that consumers are more receptive to food advertising when they are hungry, we learn
to schedule snack advertisements late in the afternoon. By understanding that new products are usually
initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the
population, we learn that (1) companies that introduce new products must be well financed so that they

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 can stay afloat until their products become a commercial success and (2) it is important to please initial
customers, since they will in turn influence many subsequent customers’ brand choices.
• Social marketing involves getting ideas across to consumers rather than selling something. Marty
Fishbein, a marketing professor, went on sabbatical to work for the Centers for Disease Control trying
to reduce the incidence of transmission of diseases through illegal drug use. The best solution,
obviously, would be if we could get illegal drug users to stop. This, however, was deemed to be
infeasible. It was also determined that the practice of sharing needles was too ingrained in the drug
culture to be stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein created a
campaign that encouraged the cleaning of needles in bleach before sharing them, a goal that was
believed to be more realistic.
• As a final benefit, studying consumer behavior should make us better consumers. Common sense
suggests, for example, that if you buy a 64-liquid ounce bottle of laundry detergent, you should pay
less per ounce than if you bought two 32-ounce bottles. In practice, however, you often pay a size
premium by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you
to the need to check the unit cost labels to determine if you are really getting a bargain.

There are several units in the market that can be analyzed. Our main thrust in this course is the consumer.
However, we will also need to analyze our own firm’s strengths and weaknesses and those of competing
firms. Suppose, for example, that we make a product aimed at older consumers, a growing segment. A
competing firm that targets babies, a shrinking market, is likely to consider repositioning toward our market.
To assess a competing firm’s potential threat, we need to examine its assets (e.g., technology, patents,
market knowledge, awareness of its brands) against pressures it faces from the market. Finally, we need to
assess conditions (the marketing environment). For example, although we may have developed a product
that offers great appeal for consumers, a recession may cut demand dramatically.

How to Apply Consumer Behavior to Your Marketing Strategy

The main goal of marketing is to create and keep customers. The more you understand your customers and
why they do what they do, the closer you are to reaching this goal. What motivates your customer to buy?
What are their needs and wants? How does their personality affect what they are buying? If you aren’t able
to answer these questions, it might be time to analyze some consumer behavior.

Consumer behavior is the study of consumers and the processes they use to choose, use (consume), and
dispose of products and services [1]. This basically refers to how and why people make purchase decisions.
Most marketers are constantly striving to understand their customer’s behavior better, because it really
makes a difference all areas of the company. If you figure out exactly why people are choosing your product,

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you can emphasize this trait in its packaging, advertising and promotions. It can be detrimental for
companies to focus on values that are found to be irrelevant to consumers in the end.

This article is designed to walk you through the process of getting to know your customer and buying
situation. This should be beneficial to areas outside of marketing that work with customers as well. Even if
you are already actively involved in consumer behavior research, hopefully this will sharpen your skills
and add more depth to your current process.

Article Contents

[Click on section below to quickly navigate this blog page]

• Consumer Needs and Wants

• How Personality Affects Behavior
• Understanding Purchasing Behavior
• How to Apply it: Next Steps
• Conclusion

Consumer Needs and Wants

When a consumer starts to feel they are missing something, they become motivated to purchase. They
recognize a need and attempt to satisfy it with a want. These needs can range from physical to biological
such as safety, security, love, affiliation, prestige, esteem and self-fulfillment [2]. Your product/service
should satisfy one of these needs. For example, a product that satisfies the need of prestige should be
luxurious and high-status. The people concerned with their status are willing to pay a high price, so the
quality and reputation should be sublime.

It’s important to understand how this motivation develops inside a person in order to understand when and
where people want to buy. Consumers process information through exposure to stimulus, actively paying
attention to it, assigning meaning, retaining the meaning, and retrieving and applying the information to a
problem or need they have [3]. If you know what drives people to buy products/services, you understand
the need they are trying to satisfy. You can understand the end of the chain and work backwards. How can
you make this need feel obvious and urgent to consumers? How can you market it in a way that is
memorable and grabs people's attention?

Many companies know how to do this well and end up convincing their customer they have a new need.
Tespo, a pill-free monthly vitamin company, educates consumers on the harmful ingredients in typical
vitamins. They say that 90% of all vitamins contain manufacturing fillers, such as Magnesium Stearate, but

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their pill-free dispenser doesn’t [4]. Consumers typically see vitamins as a healthy choice, but Tespo shows
them that they are actually making a bad decision and should replace that need with their product instead.

How Personality Affects Behavior

People will establish their needs differently based on their personality. Personality is the combination of
characteristics or qualities that form an individual’s distinctive character. By focusing on the personality of
a specific person, you can find patterns or long-term tendencies to think, feel and act in particular ways [5].
The way they feel will affect what they need to buy, the way they think will affect how they decide which
product or service, and the way they act will affect how they actually purchase.

Let’s say you are trying to target an open-minded customer who cares about charity. This person generally
feels happy, calm and hopeful and thinks in a selfless way. If they need to buy a new refrigerator, they will
probably be open to many different types and brands. They might make a decision based on how the layout
makes them feel and what the brand does for charity. Since they are self-less, they will consider the needs
of the family members and other people using the product first. Then they will purchase in a calm and
collected way. The promotion can be centered around charitable giving, versatility and the way the
refrigerator makes you feel.

Marketers don’t just sell products; they are helping shape personalities. Everyone has a self-image of how
you see yourself regardless of how others see you. The ideal self-image is who you aspire to be one day
and this usually affects how you buy the most. Your self-image affects your self-esteem motive, therefore
buying a product can make you feel good about yourself [6]. Therefore, marketers can also help change
personalities with their products in order to make people more satisfied.

Understanding Purchasing Behavior

Fortunately for marketers, consumers buy products and services in a systematic and almost predictable way.
As stated earlier, consumers identify a need and find a way to solve it. For many situations, the technique
to solve it is routinized and doesn’t take much effort to evaluate the choices. This is called habitual
evaluation which refers to a state in which the consumer disregards marketing materials placed in a store,
because of brand loyalty, lack of time, repeat purchasing or other reasons [2]. If this is your customer, there
is less of a need to fight your competitors and maintain a competitive advantage. People are going to
purchase the products no matter what. As long as you can grab the attention of new customers and make
them loyal, you are golden.

The opposite purchasing behavior would be extensive evaluation in which people consider the prices and
promotions of all brands before making a decision [2]. This is typically for higher priced items like cars,
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homes, and travel packages. It’s a major decision that requires time in order to avoid regret. If your
product/service is valuable and highly important, then your marketing should reflect how your consumer
will go about purchasing. You know they will research all your competitors, so it’s important for you to be
fair and stand out. Why is your option the best?

How to Apply it: Next Steps

If you are still lost in how to apply these consumer behavior techniques to your marketing strategy, take a
look at these techniques. This will help you get started and understand your customer.

1. Laddering - If you need help understanding why consumers make product choices, consider
conducting laddering research. The interviewer asks for an attribute and continues to ask more
questions about that attribute until reaching the end goal. This goal will be what moves consumers at
an emotional level in order to purchase [7].
2. Segmentation - Are you struggling figuring out who your customer even is? Try collecting multiple
characteristics and grouping your customers together. When you find a relevant characteristic for a
group of people, you can try focusing as your target market.
3. Targeting - Targeting this group of people can be tricky, since each segment should be target
differently in order to maximize potential. In the past, marketers would target based on demographics
like age and gender, but consumer insights are moving way beyond this. It is more efficient to target
based on learning behaviors, personality traits and self-concepts [6]. If you're interested in learning
more about targeting, please refer back to our previous entry on Demographic Research.
4. Positioning - Your positioning statement is very important and possible the easiest fix to issues. What
you say about the product/service should appeal to the customer’s motivations. It should offer
functional, emotional and economic benefits.

Conclusion

By embracing consumer behavior, you are putting the customer at the center of your marketing activities.
Isn’t this the goal of marketing? It’s all about the customer. How people think, decide, and act when they
buy things will influence all other sectors of marketing and many other business areas.

By effectively tracking your consumers' behaviors and pinpointing precisely who your consumers are, you
can restructure your entire marketing campaign around the needs and interests of the consumers. If this is
conducted in the correct way, the right products will be implemented at the right price through the right
channels with the right message. You will know your customer inside and out!

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 1.3.3. Consumer and Governmental decision making,

(iii) Consumer behavior and governmental decision-making:

In recent years the relevance of consumer-behavior principles to governmental decision-making has

become quite evident. Two major areas of activity have been affected (a) government policies that provide
services to the public or result in decisions that influence consumer behavior and (b) the design of legislation
to protect consumer or to assist them evaluating products and services.

1.3.4. Consumer Behavior and De-marketing;

(iv) Consumer behavior and demarcating:

The term demarcating refers to such efforts to encourage consumers to reduce their consumption of
particular products or services (e. g antismoking campaign). Various government policies have supported
the effort by private enterprise to stimulate the public to greater levels of consumption because of their
favorable effect on economic development. However, it has become increasingly clear that we are entering
an era of scarcity in terms of some natural resources such as oil, natural gas, and even water. These scarcities
have led to promotions stressing conservation rather than consumption.

(v) Consumer behavior and consumer education:

Consumers also stand to benefit from orderly investigations of their own behavior. This can occur on an
individual basis or as part of more formal educational program. What is learned about consumer behavior
can also directly benefit consumers in a more formal sense. The knowledge can serve as data for the
development of educational programs designed to improve consumers’ decision-making regarding products
and services. Such courses are increasingly popular in higher education, which is based on a clear
understanding of the important variables influencing consumers.

1.4. Modeling behavior:

1. Modeling is a method used in certain techniques of psychotherapy whereby the client learns by
imitation alone, without any specific verbal direction by the therapist (See Cognitive behavior therapy)
and
2. Modeling is a general process in which persons serve as models for others, exhibiting the behavior to
be imitated by the others. This process is most commonly discussed with respect to children in
developmental psychology.

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Confusingly, the word refers both to the behavior of the learner and the teacher.

Modeling is an important component of neurolinguistics programming (NLP), which field has further
developed specialized techniques involving modeling. (See NLP modeling.)

As the name implies, in the modeling the client learns new skills by imitating another person, such as a
parent or therapist, who performs the behavior to be acquired. A younger client may be exposed to behaviors
or roles in peers who act as assistants to therapist & then be encouraged to imitate & practice the desired
new responses. For example, modeling may be used to promote the learning of simple skills such as self-
feeding for a profoundly intellectually disabled child, or more complex skills such as being more effective
in social situations for a shy withdrawn adolescent.

1.4.1. Internal Variables,

1.4.2. External Variables and

Internal/External Influences/variables on Consumer Behavior

Consumer behavior is quite subjective as a consumer decision-making process is affected by number of

factors. The most substantial personal influences that affect consumers purchase decisions can be classified
in two categories (Hoyer & Macinnis, 2009) that are as follows:

Internal influences: Internal influences are also known as personal influences and it includes perceptions,
attitude, motivation, lifestyle, learning and roles. These internal influences affect all our purchase decisions
(Dawson & Kim, 2009).

External Influences: These influences are also recognized as social influences and it includes cultures,
social norms, subcultures, family roles, household structures, and groups that affect an individual's purchase
decision (Bennett, 2009).

Throughout the discussion of internal and external influences it can be said that every condition and
influence is different and it also varies from one consumer to another. Some influences can be changed by
marketers whereas some can only be handled when they occur. Understanding of these influences is
essential as with this marketers' can assist consumers in their purchase decisions (East, Wright & Vanhuele,
2008).

1.4.3. Decision-making Process.

CHAPTER 5: Buying Decision Process of Consumer

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The buying decision process of consumer intervenes between the marketing strategy and the outcomes.
That is, the outcomes of the organization’s marketing strategy are determined by its interaction with the
consumer decision process. The organization can succeed only if consumers see a need that its product can
solve, become aware of the product and its capabilities, decide that it is the best available solution, proceed
to buy it, and become satisfied with the result of the buying. An individual who purchases products and
services from the market for his/her own personal consumption is called as consumer decision making
process.

5.1 About Consumer Decision Process

The term consumer decision produces an image of an individual evaluating the attributes of a set of
products, brands, or services and rationally selecting the one that solves a clearly recognized need for the
minimum cost. Consumers do make decisions in this manner. Further, many consumer decisions focus not
on brand attributes but rather on the feelings or emotions associated with acquiring or using the brand or
with the situation in which the product is purchased or used. Although purchases and related consumption
behavior driven by emotional or situational needs have characteristics distinct from the traditional attribute-
based model, the decision process model provides useful insights into all types of consumer purchases. To
understand the complete process of consumer decision making, let us first go through the following
example: Consumer went to a nearby retail store to buy a laptop for himself. The store manager showed
him all the latest models and after few rounds of negotiations, Consumer immediately selected one for
himself. In the above example the laptop is the product which Consumer wanted to purchase for his end-
use.

Why do you think Consumer went to the nearby store to purchase a new laptop? The answer is very simple.
Consumer needed a laptop. In other words, it was actually Consumer’s need to buy a laptop which took
him to the store. The Need to buy a laptop can be due to any of the following reasons:

✓ His/Her old laptop was giving him problems.

✓ He/She wanted a new laptop to check his personal mails at home.
✓ He/She wanted to gift a new laptop to his wife.
✓ He/She needed a new laptop to start his own business.
The store manager showed Consumer all the samples available with him and explained the features and
specifications of each model. This is called information. Consumer before buying the laptop checked few
other options as well. The information can come from various other sources such as newspaper, websites,
magazines, advertisements, billboards etc. This explains the consumer buying decision process.

5.2 Types of Consumer Decisions

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Figure 5.1 Indicates, there are various types of consumer decision processes. As the consumer moves from
a very low level of involvement with the purchase to a high level of involvement, decision making becomes
increasingly complex. While purchase involvement is a continuous process, it is useful to consider nominal,
limited, extended decision making as general description of the types of processes that occur along various
points on the continuity. Here, the types of decision making processes are not distinct but rather mixed into
each other.

The level of Purchase involvement means, the

purchase process triggered by the need to
consider a particular purchase. Therefore,
purchase involvement is a temporary position
of an individual. It is influenced by the
interaction of individual, product, and
situational characteristics. Purchase
involvement is not the same as product
involvement. A consumer may be very
involved with a brand or a product category
and have a very low level of involvement with
a particular purchase of that product because of
brand loyalty, time pressure or other reasons.

5.2.1 Nominal Decision Making

Nominal decision making, sometimes referred

to as habitual decision making, in effect
involves no decision per se. As figure5.1
indicates, a problem is recognized, internal
search provides a single preferred solution.
Nominal decisions occur when there is very low involvement with the purchase. A nominal decision does
not even include consideration of the “do not purchase” alternative. Nominal decisions can be divided into
two different categories

✓ Brand Loyal Purchase

✓ Repeat Purchase

5.2.2 Limited Decision Making

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Limited decision making involves internal and limited external search. It covers the middle portion between
nominal decision making and extended decision making. Simply, limited decision making is similar to
nominal decision making. Limited decision making also occurs in response to some emotional or situational
needs. The decisions include evaluating only the newness or novelty of the available alternatives. Limited
decision making recognizing a problem for which there are several possible solutions. There is internal and
a limited amount of search. A few alternatives are evaluated on a few dimensions using simple selection
rules. The purchase and use of the product are given very little evaluation afterward, unless there is a service
problem or product failure.

5.2.3 Extended Decision Making

Extended decision making involves an extensive internal and external information search followed by a
complex evaluation of multiple alternatives and significant post purchase evaluation. It involves a high
level of purchase involvement. After the purchase, there is a doubt about the appropriateness of product
and a complete evaluation of the purchase takes place. Relatively few consumer decisions reach this level
of complexity. Products like, home, personal computers, and complex recreational items such as home
theatre systems are frequently purchased through extended decision making.

(for detail, follow the CHAPTER 5: Buying Decision Process of Consumer)

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