Chapter Three: Consumer Buying Behavior

3.1. Consumer Buying Behavior

Organizations put a great deal of efforts in analyzing their markets for one basic reason they want
to know why the customer selects one product and rejects another (or one store or restaurant in the
case of refilling). With this information, companies can tailor their marketing efforts to appeal to the
buyer’s motives. The motives of individual consumers generally are different from those of
organization buyers. Consumer buyer behaviors refer to the buying behavior of final consumers.
Individuals and households who buy goods and services for personal consumption. In the study of
consumer buying behavior, marketers attempt to explain the reason that induces individuals to buy
products. One way to look at the psychology of buying is in terms of how consumers make
decision. The aim of marketing is to meet and satisfy target customers’ needs and wants. The field
of consumer behavior studies how individual, groups, and organization select, buy, use, and dispose
of goods, services, ideas of experiences to satisfy their needs & desires.
Understanding consumer buying behavior and “Knowing customers” are never simple. Customers
may state their needs and wants but act otherwise. They may not in touch with their deeper
motivations. They may respond to influences that change their mind at the last minute.
Nevertheless, marketers must study their target customers’ wants, perception, preferences, and
shopping & buying behavior. A simple formula sums up the decision making process that nearly
everyone goes through when making a purchase.
Choice want + Ability to buy + Attitude toward the brand
3.1.1. The Buyer’s Decision Process
Types of Buying Decision Behavior
Consumer decision-making varies with the type of buying decision. The decision to buy tooth paste,
a tennis racket, a personal computer, and a new car are all very different. Complex and expensive
purchases are likely to involve more buyer deliberation and more participants. The types of
consumer buying behavior based on the degree of buyer involvement and the degree of differences
among brands is as illustrated below.
1. Complex Buying Behavior
Complex buying behavior involves a three step-process. First, the buyer develops beliefs about the
product. Second, he/she develops attitudes about the product. Third, he/she makes a thoughtful

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choice, consumers engage in complex buying behavior when they are highly involved in a purchase
and aware of significant differences among brands.
This is usually the case when the product is expensive, bought infrequently, risky, and highly self
expressive. Typically they consume does not know much about the product category. For example,
a person buying a personal computer may not know what attributes to look for. Many product
features carry no meaning unless the buyer has done some research. The marketer needs to
differentiate the brand's features, use print media to describe the brands benefits, and motivate store
sales personnel and the buyer's acquaintances to influence the final brand choice.
2. Dissonance – Reducing Buying Behavior
Sometimes the consumer is highly involved in a purchase but sees little difference in brands. The
high involvement is based on the fact that the purchase is expensive infrequent and risky. In this
case, the buyer will shop around to learn what is available but will buy fairly quickly, perhaps
responding primarily to a good price or to purchase convenience.
For example, carpet buying is a high involvement decision because carpeting is expensive and self-
expressive, yet the buyer may consider most carpet brands in a given price range to be the same.
After the purchase, the consumer might experience dissonance that steps from noticing certain
disquieting features or hearing favorable things about other brands. The consumer will be alert to
information that supports his or her decision. In this example, the consumer first acted, then
acquired new beliefs, then ended up with a set of attitudes.
Marketing communications should supply beliefs and evaluations that help the consumer feel good
about his or her brand choice.
3. Habitual Buying Behavior
Many products are bought under conditions of low involvement and the absence of significant
brand differences. Consider salt, consumers have little involvement in this product category. They
go to the store and reach for the brand. If they keep reaching for the same brand, it is at of habit, not
strong brand loyalty. There is good evidence that consumers have low involvement with most low-
cost frequently purchased products.
With these products, consumer behavior does not pass through the normal sequence of beliefs,
attitudes and behavior. Consumers do not search extensively for information, evaluate
characteristics and make a decision on which brand to buy. Instead, they are passive recipients of
information in television or print ads. Ad repetition creates brand familiarity rather than brand
conviction.

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Marketers of such products find it effective to use price and sales promotions to stimulate product
trial. Television advertising is more effective than print because it is a low-involvement medium
that is suitable for passive learning.
4. Variety Seeking Buying Behavior
Some buying situations are characterized by low involvement but significant brand differences.
Here consumers often do a lot of brand switching. Think about cookies. The consumer has some
beliefs about cookies, chooses a brand of cookies without much evaluation, and evaluates the
product during consumption. Next time, the consumer may reach for another brand out of a wish for
a different taste. Brand switching occurs for the sake of variety rather than dissatisfaction.
The market leader and the minor brands in thus product category have different marketing
strategies. The market leader will try to encourage habitual buying behavior by dominating the shelf
space, avoiding out-of-stock conditions, and sponsoring frequent reminder advertising. Competitor
firms will encourage variety seeking by offering lower prices, deals, coupon, free samples, and
advertising that presents reasons for trying something new.
3.1.2 The Stages of the Buying Decision Process
Buyers to reach a buying decision pass through five stages: problem recognition, information
search, evaluation of alternatives, purchase decision and post purchase behavior. This model
emphasizes that the buying process starts long before the actual purchase and continues after the
purchase. Buyers may not need to pass through all stages with every purchase they make. In more
routine purchases, consumers may skip some of these stages. However consideration of all the
stages arises when a consumer faces a new purchase situation, especially one involving extensive
problem solving.
1. Problem Recognition
The buying process starts when problem or need is recognized. The need can be triggered by
internal as well as external factors. The marketer needs to determine the factors and situations that
usually trigger consumer problem recognition. The marketer should research consumers to find out
what kinds of needs or problems arise, what brings them about, and how they lead the consumer to
a particular product
2. Information search
An aroused consumer may or may not search for more information. If the consumer’s drive is
strong and a satisfying product is near at hand, the consumer is likely to buy it then. If not, the

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consumer may simply store the need in memory or undertake an information search bearing on the
need.
At one level the, the consumer may simply enter heightened attention or may go into active
information search.
A. heightened attention – the consumer become receptive to the information related to the
product that satisfy their need (product class advertisings, products used by friends and
product conversations)
B. Active information search: the consumer looks for reading materials, phones to friends,
and gathers information in other ways.
The amount of consumer search activity increases as the consumer moves from decisions that
involve limited problem solving to those that involve extensive problem solving.
The consumer can obtain information from any of several sources: consumers information sources
include:
 Personal sources: family, friends, neighbors etc
 Commercial sources: advertising, sales people, dealers, packaging, displays etc
 Public sources: mass media, consumer rating organizations etc
 Experiential sources: handling, examining, and using the product
The relative influence of those information sources varies with the product and buyer. Generally,
the consumer receives the most information about a product from commercial sources- those
controlled by the marketer. The most effective sources, however, tend to be personal.
In order to prepare effective communication to target markets the marketer should carefully identify
consumers’ sources of information and the importance of each source.
3. Evaluation of Alternatives
The marketer needs to know about alternative evaluation that is, how the consumer processes
information to arrive at brand choices. Unfortunately, no simple single evaluation process is used by
all consumers- nor even by one consumer in all buying situation. Instead, several evaluation
processes are at work.
Marketers should study buyers to find out how they actually evaluate brand alternatives. If they
know what evaluation processes go on, marketers can take steps to influence the buyer’s decision.
4. Purchase Decision

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In the evaluation stage consumer ranks brand and forms purchase intentions. Generally, the
consumer’s purchase decision will be to buy the most preferred brand, but tow factors can come
between the purchase intention and the actual purchase.

1. The first factor is the attitude of others. Suppose you have the intention to buy an
expensive player. How much another person’s attitudes will affect some one’s choice
depends both on the strength of the person’s altitudes towards the individual’s buying
decision and on the individual’s wishes to comply with the person’s wishes.

2. Purchase intention is also influenced by unexpected situational factors. The consumer

forms a purchase intention based on such factors as expected family income, expected price,
and expected benefits from the product. When the consumer is about to act unexpected
situational factors may arise to change the purchase intention.
5. Post Purchase Behavior
The marketer’s job does not end when the product is bought. After purchasing the product;
consumer will be satisfied or dissatisfied and will be engaged in post purchase behavior of interest
to the market.
The marketer must monitor:
a. Post Purchase Satisfaction
Satisfaction is the function of closeness between expectation and performance
If expectation is > performance  the consumer will be disappointed
If expectation is = performance  the consumer will be satisfied
If expectation is < performance  the consumer will be delighted
b. Post Purchase Action
Satisfaction or dissatisfaction influences the subsequent behavior of consumers.
If the buyer is satisfied
 will purchase the product again
 talks favorably about the product
 pays attention to competing brand and advertising
 and may buy other products from the company
If the buyer is dissatisfied he/she has a choice between taking and not taking any action. If he/she
acts, he/she can take;

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 Private action
 Not to buy the product again
 Warn friends not to buy it
 Return the product
Public action
 Complaining to the co.
 Going to a lawyer
 Complaining to others etc
c. Post Purchase Use And Disposal
Marketers should monitor how buyers use and dispose the product.
 If they store the product they may not be satisfied.
 If they find new use to the product marketers should advertise the new use.
3.1.2. Major Factors Influencing Consumer Buying Behavior
Consumers’ buying behavior is influenced by many cultural, social, personal and psychological
factors. The factors influencing a consumer’s buying behavior in summarized forms are as follows:
1. Cultural Factors
2. Social Factors
3. Personal Factors
4. Psychological Factors
1. Cultural Forces
Cultural factors exert the broadest and deepest influence on consumer behavior. The roles played by
the buyer’s culture, subculture, and social classes are particularly important.
Culture: is the most fundamental determinant of person’s wants & behavior. E.g. A growing child
acquires a set of values, perceptions, preferences, and behavior through his or her family and other
key institutions.
Subculture: each culture consists of smaller subcultures that provide more specific identification
and socialization for its members. It includes nationalities, religions, racial groups, and geographical
regions. Many subcultures make up important market segments, and marketers often design
products and marketing programs tailored to their needs.
Social Class: All human societies exhibit social stratification. Stratification sometimes takes the
form of a caste system where the members of different castes are reared for certain roles and cannot
change their caste membership.

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Social classes are relatively homogenous and ending divisions in a society, which are hierarchal,
ordered and whose members share similar values, interests, and behavior.
Social classes do not reflect income alone but also other indicators such as occupation, education,
and area of residence. Social classes differ in their dress, speech, patterns, recreational preferences,
and many other characteristics.
2. Social Factors
Reference Group: A person’s reference group consists of all the groups that have a direct (face-to-
face) or indirect influence on the person’s attitudes or behavior. Groups having a direct influence on
a person are called membership Groups. Some membership groups are primary groups, such as
family, friends, neighbors, and coworkers, those with whom the person interacts fairly continuously
and informally. People also belong to secondary groups, such as religious, professional, and trade
union groups, which tend to be more formal and require less continuous interaction.

People are significantly influenced by their reference groups in at least three ways. Reference
groups expose the person to new behavior and lifestyle, and influence the person’s attitudes and
self-concept; they create pressures to conform that may affect the person’s product brand and
vendor choices. People are also influenced by groups to which they do not belong. Aspirational
groups are those a person would like to join. For example, a young boy may aspire to be part of
Ethiopian Coffee Sport Club and may identify himself with this group even though he is not a
member. Dissociative groups are those whose values or behavior a person rejects.

The importance of group influence varies by product and brand. It tends to be strongest when the
product is visible to others whom the buyer respects. Purchases of products that are used privately
are not greatly affected by group influence.

Groups commonly have opinion leaders. These are people within a reference group who, because
of special skills, knowledge, personality, or other characteristics, exert influences over others.
Opinion leaders are found in all strata of society, and one person may be an opinion leader in one
product area and a follower in another.

A business should identify the opinion leaders in their community and make sure that they are
invited to important events. For example, the guest list for the grand opening of a restaurant or the
first anniversary of a hotel should include opinion leaders.

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Family: Family members can strongly influence buyer behavior. We can distinguish between two
families in the buyer's life. The buyer's parents making the “family of orientation". The "family of
procreation" - the buyer's spouse and children - have a more direct influence on everyday buying
behavior. The family is the most important consumer- buying organization in society.
Role and Status : A person belongs to many groups: family, clubs, and organizations. An
individual’s position in each group can be defined in terms of role and status.

A Role consists of the activities that a person is expected to perform according to the persons
around him or her. Each role influences buying behavior. For example, college students dining with
their parents may act differently than when they are dining with peers. Each role carries a status
reflecting the general esteem given to it by society. People often choose products that show their
status in society.
3. Personal Factors

A buyer’s decisions are also influenced by personal characteristics. These include, the buyer’s age
and stage in the life cycle, occupation, economic circumstance, lifestyle, personality, and self-
concept.

Age & stage in the life cycle

The types of goods and services people buy change during their lifetimes. Preferences for leisure
activities, travel destinations, food and entertainment are often age related.
Buying behavior is also shaped by the family life cycle stages. If we take examples in towns,
Young unmarried persons usually have few financial burdens, and spend a good portion of their
discretionary income on entertainment. Young married people without children have high
discretionary incomes and dine out frequently. Once they have children, their purchases from
restaurants can change to more delivery and carry out. When the children leave home, the
discretionary income can jump, and expenses on dining out can increase.

Marketers are expected to define their target markets in life-cycle terms and develop appropriate
products and marketing plans.

Occupation
A Person’s occupation also influences his or her consumption patterns. A blue-collar worker will
buy work clothes, work shoes, and launch boxes .A company president will buy expensive suits, air
travel, country club membership, and a large sailboat. The marketer tries to find out the different
occupational group of the segment and draft the plan accordingly.
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Economic Circumstance

Economic considerations are very powerful and influence the consumer behavior to a great extent.
The human beings want to maximize their satisfaction through their limited resources. Economic
model is based on the assumption that the price of the product affects its demand.
Product choice is greatly affected by ones economic circumstances. Income is the most powerful
economic factor to influence consumer behavior because it gives him purchasing power from the
marketer’s point of view. Here the disposable income is important than the gross income. Out of the
disposable income, a major share is spent to meet the basic needs like food, shelter, education etc.
The remaining income after it is called discretionary income. People’s economic circumstances
consist of their spendable income (its level, stability, and time pattern), savings and assets
(including the percentage that is liquid), debts, borrowing power, and attitude toward spending
versus saving.
Lifestyle : People coming from the same subculture, social class and occupation may lead quite
different lifestyles.
A person’s life style is the person’s pattern of living in the world as expressed in the person’s
activities, interests, and opinions. Life style portrays the “Whole person” interacting with his or her
environment.
Personality and Self-Concept : Each person has a distinct personality that influences his or her
buying behavior.
By personality, we mean a person’s distinguishing psychological characteristics that lead to
relatively consistent and ending responses to his or her environment.
Personality is usually described in terms of such traits as self-confidence, dominance, autonomy,
difference, sociability, defensives, and adaptability.
4. Psychological Factors
A person’s buying choices are influenced by four major psychological factors- motivation,
perception, learning, beliefs, and attitudes. We shall discuss the above factors as follows.
Motivation : A person has many needs at any given time. Some needs are biogenic. They arise
from physiological states of tension such as hunger, thirst, and discomfort.
Other needs are psychogenic; they arise from psychological states of tension such as the need of
recognition, esteem, or belonging. A need becomes a motive when it is aroused to a sufficient level
of intensity. A motive is a need that is sufficiently pressing to drive a person to act. Satisfying the
need reduces the felt tension.
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 Perception : A motivated person is ready to act. How the motivated person actually acts is
influenced by his or her perception of the situation.
Perception is the process by which an individual selects, organizes, and interprets information
inputs to create a meaningful picture of the world.
People can form different perceptions of the same stimulus because of three perceptual processes:
selective attention, selective distortion and selective retention.
Selective Attention: the tendency for people to screen out most of the information to which they are
exposed. People are exposed to a great amount of stimuli every day. For example, the average
person may be exposed to a lot of ads a day. And it is impossible for a person to pay attention to all
these stimuli. Thus, marketers have to work especially hard to attract the consumer's attention. Their
message will be lost on most people who are not in the market for the product. Moreover, even
people who are in the market may not notice the message unless it stands out from the surrounding
see of other ads.
Selective Distortion: it describes the tendency of people to adapt information to personal meanings.
In other words, noted stimuli do not always come across in the intended way. Each person fits
incoming information into un-existing mind-set. People tend to interpret information in a way that
will support what they already believe. Thus, marketers must try to understand the mindsets of
consumers and how these will affect interpretations of advertising and sales information.
Selective Retention: people also will forget much that they learn. They tend to retain information
that supports their attitudes and beliefs. Because of selective retention, a person is likely to
remember good points made about a particular product, which he/she is familiar, and forget good
points made about competing products.
Because of selective exposure, distortion and retention marketers have to work hard to get their
messages through. This fact explains why marketers use so much drama and repetition in sending
messages to their market.
Marketers must therefore be careful to take these perceptual processes into account in designing
their marketing campaigns.
Learning : Learning involves changes in an individual's behavior arising from experience. When
people act, they learn. Learning theorist believe that learning is produced through the interplay of
drives, stimuli, responses, and reinforcement. A drive is a strong internal stimulus that calls for
action. Cues are minor stimuli that determine when, where, and how the person responds. The

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practical significant of learning theory for marketers is that they can build up demand for a product
by associating it with strong drives, using motivating cues, and providing positive reinforcement.
Beliefs and Attitudes
Through doing and learning, People acquire beliefs and attitudes. These in turn influence their
buying behavior.
A Belief is a descriptive through that a person holds about something.
These beliefs may be based on real knowledge, opinion or faith, and may or may not carry an
emotional charge. Manufactures are very interested in the beliefs that people carry in their heads
about their products and services. These beliefs make up product and brand images, and people act
on their image.
An Attitude is a person’s enduring favorable or unfavorable evaluation, emotional, feelings, and
action tendencies toward some object or idea.
Attitude is a learned predisposition to respond to an object or class of objects in a consistently
favorable or unfavorable way. People have attitudes toward almost everything Religion politics,
clothes, music, and food and so on. Attitude put then into frame of mind of liking or disliking an
object, moving toward or away from it. Attitudes have the following characteristics:
 Attitudes are learned
 Attitudes have an object
 Attitudes have direction and intensity, and
 Attitudes tend to be stable and generalizable.
3.1.3. Consumer Buying Role
To be successful, marketers have to go beyond the various influences on buyers and develop an
understanding of how consumers actually make their buying decisions.
Marketers must identify who makes the buying decisions, the types of buying decisions and steps in
the buying process.
We can distinguish six roles people might play in a buying decision:
Initiator: A person who first suggests the idea of buying the product or service
Influencer: A person whose view or advice influences the decision
Decider: A person who decides on any component of buying decision- whether to buy, what to
buy, how to buy, or where to buy.
Buyer: The person who makes the actual purchase
User: A person who consumes or uses the product or services.

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Gatekeeper: people who have the power to prevent sellers or information from reaching members of
the buying center. For example, purchasing agents, receptionists, and telephone operators may
prevent sales persons from contacting users or deciders.
E.g. suppose a person wants to learn a computer. His/ her interest might have been initially
stimulated by his/ her friend (initiator). In finding for a computer house, he/ she might have
consulted someone he/she knows, who made some suggestions (Influencers)?
He/ she made the final decision (decider). His/her parents enroll him/ her at the computer house
(buyer). He/She starts learning the computer (user).
3.2 .Organizational Buying Behavior
The business market consists of all business users, organization that buys goods and services for
one of the following purposes.
 To make other goods and services
 To resell to other business users or to consumers and
 To conduct the organizations operations
3.2.1. Characteristics of Business Market
Business buying behaviors, like consumer buying behavior is initiated when an around need (a
motive) is recognized. This lead to goal-oriented activity designed to satisfy the need. Once again,
marketers must try to determine what motivates the buyer, and then understand the buying process
and buying patterns of business organizations in their markets.
3.2.2.1. Characteristics of Business Market Demand
Four demand characteristics differentiate the business market from the consumer market: Demand
is derived; Demands tend to be inelastic; Demand is widely fluctuating; and the market is well
informed.
1. Demand is derived : The demand for a business product is derived from the demand for the
consumer products in which that business product is used. Thus the demand for steel depends
partially on consumers demand for automobiles and refrigerators, but it also depends on the demand
for butter, baseball gloves and co-players. This is because the tool, machines, and other equipment
needed to makes these items are made of steel. Consequently, as the demand for baseball gloves
increases, companies may buy more steel for sewing machines or filing cabinet.
2. Demand is inelastic : Another characteristic of the business market is demand elasticity of
business products.
Elasticity of demand refers to how responsive demand is to a change in the price of a product.

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The demand for many business products is relatively inelastic which means that the demand for a
product responds very little to changes in its price.
As a result, when the price of the business product changes, there is very little change in the price of
the related consumer products. Since there is no appreciable shift in the demand for the consumer
goods, then – by virtue of the derived demand feature – there is no change in the demand for the
business product.
3. Demand is widely fluctuating
Although the demand for business goods does not change much in response to price changes, it does
respond to other factors. In fact, market demand for most classes of business goods fluctuates
considerably more than the demand for consumer products.
A major reason for these fluctuations is that individual businesses are very concerned about having
a shortage of inventory when consumer demand increases or being caught with excess inventory
should consumer demand decline. Thus they tend to over react to signals from the economy,
building inventories when they see signs of growth in the economy and working inventories down
when the sign suggests stagnation. When the actions of all the individuals firms are combined, the
effect on their suppliers is widely fluctuating demand. This is known as the acceleration principle.
4. Buyers are well informed
Typically, business buyers are better informed about what they are buying than are ultimate
consumers. They know more about the relative merits of alternatives sources of supply and
competitive products for three reasons. First, there are relatively few alternatives for a business
buyer to consider. Consumers typically have many more brands and sellers from which to choose
than do business buyers.
Second, the responsibility of a buyer in an organization is ordinarily limited to a few product.
Unlike, a consumer who buys many different things, a purchasing agent’s job is to be very
knowledgeable about a narrowly defined set of products. Third, for most consumer purchase, an
error is only a minor inconvenience. However, in business buying the rest of mistake may be
thousands of dollars or even the decision maker’s job.
This need for information has a significant marketing implication. Sellers of business products place
greater emphases on personal selling than do firms that market consumer products.
Business sales people must be carefully selected, properly trained, and adequately compensated.
They must give effective sales presentations and furnish satisfactory service both before and after
each sales is made.

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Sales executives are devoting increased effort to the assignment of sales people to key accounts to
ensure that these representative are compatible with business buyers.
3.2.2.2. Characteristics of Business Market Structure
A. Number and type of Business users
Number of buyers : The business market contains relatively few buying units compared to the
consumer market.
The business market seems even more limited to most companies, because they sell to only a small
segment of the total market.
Size of Business users : While the business market may be limited in the total number of buyers, it
is large in purchasing power. A relatively small percentage of firms account of the greatest share of
the value added to products by manufacturing.
The marketing significance of these facts is that buying power in many business markets is highly
concentrated in a relatively few firms. That is, a high percentage of industry sales are accounted for
by a very small number of firms.
B. Regional concentration of business users
There is substantial regional concentration is many major industries and among business users as a
whole. A firm that sell producers used in copper mining will find the block of its market is
concentrated area.
C. Vertical and Horizontal Business market
For effective marketing planning, a company should know whether the market for its products is
vertical or horizontal. If a firm’s product is usable by virtually all firms in only one or two
industries, it has a vertical business market. For example, some precision instruments are intended
only for the marine market, but every boat builder or ship builder is a potential customer.
If the product is usable by many industries, then it is said to have a broad or horizontal business
market. For example, lubricating oils and greases may be sold to a wide variety of industries.
D. Buying Power of Business Users
Another determinant of business market demand is the purchasing power of business customers.
This can be measured either by the expenditures of business usurer by their sales volume. However,
such information is not always available or is very difficult to estimate. In such cases purchasing
power is estimated indirectly, using an activity indicators of buying power – measures of
manufacturing activity, measures of mining activity, measures of agricultural activity of measures
of construction activity. That is some market factor related to sales and expenditure.

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3.2.2.2 Buying Situations in Organizational Buying
The business buyer faces many decisions in making a purchase. The number of decisions depends
on the type of buying situation. Three types of organizational purchase based on their degree of
complexity include: new-task buying; straight re buy, and modified re buy.
1. New-task buying
This is the most difficult and complex buying situation because it is a first-time purchase of a major
product. Typically more people are involved in new task buying than in the other two situations
because the risk is great. Information needs are high and the evaluation of alternative is difficult
because the decision makers have little experience with the product.
2. Straight Re-buy
This is a routine, low involvement purchase with seminal information needs and no great
considerations of alternatives. These buying decision are made in the purchasing department,
usually from a predetermined list of acceptable suppliers.
3. Modified Re-buy
This buying situation is somewhere between the other two in terms of time and people involved,
information needed, and alternative considered.

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