Consumer Buying Behavior and Decision Making

MR. O CHAHELE
 After studying this chapter,
you should be able to:
• What is consumer behaviour.
• Discuss the importance of consumer
behavior.
• Understand consumer decision making and
some of the important influences on those
decisions.
• Distinguish between low-involvement and
high-involvement consumer behavior.
• Understand how attitudes influence
consumer purchases.

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 After studying this chapter,
you should be able to:
• What influences consumer behaviour?
• How do you classify consumer goods?
• Outline the consumer decision making
process?
• What is diffusion of innovation?
• Recognize the outcomes of consumers’
decisions to purchase or not to purchase and
how they affect marketing success.

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 Why studying consumer behaviour?

• Predict the consumption patterns and behaviour

• Helps in designing the marketing mix
• Helps in designing the marketing strategy
• Modern marketing philosophy
• Achievement of marketing goals
• Adjusting marketing plan over time
• Developing new products
• Maximum customer satisfaction

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 What is Consumer Behaviour?

• Those activities directly involved in

obtaining , consuming and disposing of
products and services, including the
decision processes that precede and
follow these actions

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 What is Consumer Behaviour?

• The behaviours that consumers display in

searching for, purchasing, using, evaluating and
disposing of products and services that they
expect will satisfy needs.
• A study of how people make decisions about
what they buy, want, need or act in regards to a
product or service of a company.

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 Introduction to the
• Topic
Consumer behaviour: the process individuals or
groups go through to select, purchase, and use
goods, services, ideas or experiences to satisfy their
needs and desires.
• Why do we (marketers) care?
• We want to understand why
consumers make the decisions that Understand
they do, so that we will be able to
predict what they will do in a given
situation, so that ultimately, we will Predict
be able to influence that process.
• Why do people buy?
• It relates to value, but that is getting Influence
ahead of ourselves.
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 Consumer Buying Behavior

• Consumer buying behavior:

– Refers to the buying behavior of individuals
and households who buy goods and services
for personal use.
– These people make up the consumer
market.
• The central question for marketers is:
– “How do consumers respond to various
marketing efforts the company might use?”
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 Scope of consumer behaviour

• What the consumer buy

• Why they buy it
• When do they buy it
• How often they buy it
• How often they use it

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 THE CONSUMER
DECISION MAKING PROCESS

Fig 5.1 taken from Kerin et al. (2009), p.

116

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 STEP ONE: PROBLEM AWARENESS

During problem awareness, the consumer

recognizes that the good, service, organization,
person, place, or idea may solve a problem of
shortage or unfulfilled desire.

Many consumers are hesitant to react to

unfulfilled desires because there are risks and
the benefits may be hard to judge.

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 STEP TWO: INFORMATION SEARCH

• Information search involves listing alternatives that will

solve the problem at hand and a determination of the
characteristics of each.
• Once the information search is completed, it must be
determined whether the shortage or unfulfilled desire
can be satisfied by any alternative.
• Internet shopping sites such as Amazon.com have
become a common source of information about
products. Epinions.com is an example of consumer-
generated review site.
• sources of information, such as advertisements,
brochures, company Web sites, and sales people.

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 STEP THREE: EVALUATION OF
ALTERNATIVES/PRODUCT
EVALUATION

The alternatives are evaluated on the basis of the

consumer’s criteria and the relative importance of
these criteria. They are then ranked and a choice
made.

Evaluative criteria are certain characteristics that

are important to you such as the price of the
product, the size, color, durability, weight and
packaging. Some of these characteristics are
more important than others.
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 STEP FOUR: PRODUCT CHOICE AND
PURCHASE

• The purchase act involves the exchange of money or a

promise to pay for a product, or support in return of
ownership of a specific good, the performance of a
specific service, and so on.

• Purchase decisions remaining at this stage center

on
the place of purchase, terms and availability.

• If the above elements are acceptable, a consumer will

make a purchase.

• If you are buying a high-definition television, you might

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 STEP FIVE: POSTPURCHASE USE AND
EVALUATION

• Frequently, the consumer engages in post-purchase

behavior. Buying one item may lead to the purchase
of another.

• Re-evaluation of the purchase occurs when the

consumer rates the alternative selected against
performance standards.

• Cognitive dissonance, doubt that a correct purchase

decision has been made, can be reduced by follow-
up calls, extended warranties, and post-purchase
advertisements.
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 STEP SIX: DISPOSAL OF THE PRODUCT

• Finally, the consumer

dispose the product

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 Factors that Increase the Level of
Pre- purchase Search

• Product Factors: Higher search when

– It is a long-lasting or infrequently used
product
– There are frequent changes in product
styling
– Large volume is purchased
– The price is high
– There are many alternative brands
– There is much variation in features

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 Factors that Increase the Level of
Pre-purchase Search
• Consumer Factors: Higher search
when:
– Consumers are well-educated, have higher
income levels and are younger
– Consumers are low in dogmatism and risk
perception
– Level of involvement is high
– Shopping is seen as an enjoyable activity

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 Classification of Consumer Goods

• Convenience goods
• Shopping goods
• Specialty goods
• Unsought goods

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 Convenience Goods

• Bought frequently, quickly and with

a minimum emotional involvement
• Most are non-durable goods of low
value and are frequently purchased in
small quantities e.g bread, soaps.
• Further categorised

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 Shopping Goods

• Consumers do a lot of selection and

comparison based on various
parameters before buying the item
• Goods are usually of higher value than
convinience goods
• Examples-Television, home furnitures

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 Specialty Goods

• These are goods which are very

unique, unusual and luxurious in nature.
• Have characteristics that impel consumers
to make special efforts to find them
• Consumers do not consider the price at all
• Examples include expensive imported
cars

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 Unsought Goods

• Go and Research

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 Influences on Consumer Behaviour

• A consumer’s behaviour can be

influenced by many factors:
– Group factors e.g. culture, family, friends
– Individual factors e.g. gender, age, personality
– Psychological factors e.g. perception,
involvement, time pressure

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 Factors influencing consumer behaviour

Influences of consumer behaviour

Internal influences External influences

Personal Psychological Cultural

Social factors
Factors factors factors

Age, Motivation,
Income, Perception, Culture,
Family, Role
Occupation, Learning, Social
and status
Life style, Belief and class
Personality attitude

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 Cultural Influences

• Culture:
– The values, ideas, • Culture is learned and
attitudes, and transmitted from one
symbols that people generation to the next.
adopt to
communicate,
interpret, and
interact as
members of
society.

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 Values

• Values:
– Shared beliefs or cultural norms about
what is important or right.

Cultural values directly influence how

Consumers view and use individual
products, brands, and services.

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 A Group Factor: Culture

• Culture- a set of values, attitudes and

preferences passed on from one
generation to the next

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 Subcultures

• Ethnic Patterns:
– The norms and values of specific groups or
subcultures within a society.

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 Subcultures

• Demographic characteristics used to

identify subcultures:
– Nationality - Hispanics, Italians

– Race - African-American,
American Indian, Asian

– Region - New England, the South

– Age - Elderly, teenager

– Religion - Catholic, Jewish,

fundamentalist
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 Social Class Influences

• Social Classes:
– Relatively homogeneous divisions
within a society that contain people
with similar values, needs,
lifestyles, and behavior.

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 Family Influences and the Family Life Cycle

• Family influences play two

important roles in:

– The socialization of people.

– Affecting individual
purchase decisions.

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 Family Influences and the Family Life Cycle

• Family Life Cycle:

– The sequence of steps a family goes through:
• From young, to

• Single adults, to

• Married couples whose children have left home, to

• The retired survivor

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 Motivation
• Motivation:
– Refers to a state or condition within a person
that prompts goal-directed behavior.

• Maslow’s Hierarchy:

– Self-actualization Needs - Art, books,

recreation
– Esteem Needs - Clothing, home furnishings
– Love and Belonging Needs - Mementos, gifts,
photos
– Safety Needs - Burglar alarms, seat belts
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 Consumer Behavior Outcomes

Consumer Learning happens when changes

occur in knowledge or behavior patterns.

Marketers influence consumers by imparting knowledge

through advertising, product labels, and personal selling.

Marketers hope consumers will attend to, comprehend,

and then remember these messages

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 The Effect of Gender

• Are men and women really different?

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 A Psychological Process: Perception

• Perception is the process by which an

individual selects, organizes, and interprets
information to create a meaningful picture of
the world.
• We perceive our world

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 Concepts of Interest
• Involvement: the relative importance of perceived
consequences of the purchase to a consumer. The level of
involvement determines the extent of effort a person puts into
the
purchase decision. • Note that: involvement is determined by
the consumer, not the product, and
the level will influence:
– the amount of time spent making the
decision
– the amount and quality of information
sought
• Involvement is also influenced by the
perceived risk felt by the consumer.
• Buying a digital camera would be an
example of a high involvement decision.
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 High- and Low-Involvement Decisions

• Involvement: • Consumer
– The level of Information
importance or Processing:
interest – The cognitive
generated by a processes by which
product or a consumers interpret
decision. and integrate
information from the
environment.

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 High-and Low-Involvement Decisions

• High-involvement Decisions:
– Characterized by high levels of importance
thorough information processing, and
substantial differences between alternatives.
• Low-involvement
Decisions:
– Occur when
relatively little
personal interest,
relevance, or
importance is
associated with a
purchase.
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 What happens when
involvement is Low?
• Routine buying behaviour
– Very Low involvement
– Problem recognition – purchase
– Buy what we bought before
– Little time and effort
– Examples:

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 What happens when
involvement is Low?
• Routine buying behaviour
– Very Low involvement
– Problem recognition – purchase
– Buy what we bought before
– Little time and effort
– Examples:

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 What happens when
involvement is moderate?
• Limited Problem Solving
– Moderate involvement
– Unwilling or unable to spend more than
limited time and effort
– Willing to compare a few alternatives
– Use shortcuts or recommendations
– Examples

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 Types of Buying Behaviour

• Extended Problem Solving

– Medium to High involvement
– Willing to spend time and effort
– Careful search and evaluation of information
– Undertake all 5 stages of decision process
– Examples:

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 Comparison of problem-solving variations

1-45 Fig 5.3 Kerin et al. (2009), p.120

 Culture

• Culture is the most basic cause of

a person’s wants and behavior.
– Culture is learned from family,
church, school, peers, colleagues.
– Culture reflects basic values, perceptions,
wants, and behaviors.
– Cultural shifts create opportunities for new
products or may otherwise influence
consumer behavior.
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 Subculture
• Subculture:
– Groups of people with shared value systems
based on common life experiences.
• Major subculture groups:
– Hispanic consumers
– African-American consumers
– Asian-American consumers
– Mature consumers

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 Social Class
• Social class:
– Society’s relatively permanent and ordered
divisions whose members share similar
values, interests, and behaviors.
– Measured by a combination of occupation,
income, education, wealth, and other
variables.
– Class categories include upper class, middle
class, working class, and lower class.
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 Social Factors
• Groups and social networks:
– Membership, reference, and aspirational
groups.
• Marketers attempt to reach opinion leaders within
groups important to target market.
• Opinion leaders are recruited as brand
ambassadors or for buzz marketing.
– Online social networks allow marketers to
interact with consumers.

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 Social Factors
• Family:
– Strongly influences buying behavior.
– Gender stereotypes for certain types of
purchases are relaxing in the U.S.
– Children are very influential, and have
substantial disposable income of their own.
• Roles and status:
– Role = Expected activities.
– Status = Esteem given to role by society.
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 Personal Factors
• Age and life-cycle stage:
– People change the goods they buy over their
lifetimes.
• Occupation:
– Occupation influences the purchase of
clothing and other goods.
• Economic situation:
– Some goods and services are especially
income-sensitive.
– Economic situation often influences choice of
store as well. 5 - 51

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 Personal Factors
• People within the same subculture, social
class, and occupation may have
different lifestyles.
• Lifestyle:
– Pattern of living as expressed in his or her
activities, interests, opinions.
• People buy the lifestyles represented by
products or services.

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 Personal Factors
• Personality:
– Refers to the unique psychological
characteristics that distinguish a person or
group.
– Generally defined in terms of traits.
– Self-concept theory suggests that people’s
possessions contribute to and reflect
their identities.
– Brands may also have personalities.
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 Personal Factors
• Motivation:
– A motive (or drive) is a need that is
sufficiently pressing to direct the person to
seek satisfaction.
– Maslow’s hierarchy of needs explains why
people are driven by needs at particular
times.

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 Personal Factors
• Maslow’s hierarchy of needs:
– Physiological needs
– Safety needs
– Social needs
– Esteem needs
– Self-actualization
• Hierarchy implies that lower level needs
(physiological) must be satisfied first.
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 Psychological Factors
• Perception:
– Process by which people select, organize,
and interpret information to form a meaningful
picture of the world.
– Perception can be influenced by:
• Selective attention
• Selective distortion
• Selective retention

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 Psychological Factors
• Learning:
– Defined as changes in an individual’s
behavior arising from experience.
– Occurs due to an interplay of drives, stimuli,
cues, responses, and reinforcement.
– Strongly impacted by the consequences of an
individual’s behavior.
• Behaviors with satisfying results tend to
be repeated.
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 Beliefs and
Attitudes
• Belief:
– A descriptive thought that a person
holds about something.
• Attitude:
– A person’s consistently favorable or
unfavorable evaluations, feelings, and
tendencies toward an object or idea.

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 Stages in the Adoption Process
1. Awareness: Consumer becomes aware of the
new product, but lacks information about it.
2. Interest: Consumer seeks information about
new product.
3. Evaluation: Consumer considers whether
trying the new product makes sense.
4. Trial: Consumer tries new product on a
small scale to improve his or her estimate
of its value.
5. Adoption: Consumer decides to make full and
regular use of the new product.
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 Adopter Categorization
• Individual differences influence the
speed with which people will try new
products, yielding five adopter
categories:
– Innovators
– Early adopters
– Early majority
– Late majority
– Laggards
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 Adopter Categories

• Innovators - These constitute 2 ½ % of

the market and are those adventurous
and risk takers type of customers who
immediately try a new product or model as
soon as it appears on the market.
• Early Adopters – They constitute
13.5% of the market and are often
opinion leaders who adopt new
products, readily, but only after careful
consideration.
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 Adopter Categories

• Early majority – These constitute 34% of

the market, weigh risks carefully and
accept an innovation before an average
person.
• Late majority – These constitute 34% of
the market and are skeptical consumers
who take their time before commitment to
a new product. They may adopt a product
as a result of peer pressure and when
they are satisfied that the new product is
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 Adopter Categories

• Laggards - These constitute 16% of the

market and are the last to try an
innovation. The laggards tend to be
older, traditionally oriented to the past
and suspicious of the new.

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 ADOPTER CATEGORIES

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 PRODUCT LIFE CYCLE

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 PLC & ADOPTER
CATEGORY

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 PLC

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 Product Characteristics that Influence the
Rate of Adoption
• Relative advantage:
– Is the innovation superior to existing products?
• Compatibility:
– Does the innovation fit the values and experience
of the target market?
• Complexity:
– Is the innovation difficult to understand or use?
• Divisibility:
– Can the innovation be used on a limited basis?
• Communicability:
– Can results be easily observed or described to
others?
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 Business Markets

• Market structure • Nature of the

and demand: buying unit:
– Contains far fewer – Business
but larger purchases involve
more decision
buyers.
participants.
– Business demand – Business buying
is derived from involves a more
consumer demand. professional
– Business markets purchasing effort.
have more 5 - 69

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 Business Markets

• Key differences exist between

business and consumer buying
situations:
– Business buyers usually face more
complex buying decisions.
– The business buying process tends to be
more formalized.
– Buyers and sellers are much more
dependent on each other in business
markets.
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 Major Influences on Business Buyers

• Environmental factors
– Examples: Supply conditions, political and
regulatory developments.
• Organizational factors
– Examples: Objectives, procedures
• Interpersonal factors
– Examples: Authority, empathy
• Individual factors
– Examples: Age, personality, risk attitudes
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 DMU

• Starter – This refers to a person or thing

which triggers a purchase. In any buying
situation someone or something suggests
the idea of buying the particular product or
service. For example children may trigger
the purchase of a television set.

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 • Purchaser – The person who actually
buys the product or service. The
Purchaser does not make any decision but
simply buys as instructed. In our television
example the eldest child maybe the
purchaser.

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 • Adviser – This refers to a person who
gives advice or recommendation on what
product or service to buy. A sales
representative, friend, neighbour or
colleague may be an adviser.

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 • Decider – The person who makes the
decision on what to purchase, where and
how to purchase it. The decider is
normally one who has financial authority or
power to dictate the final choice. In our
television example the father may be the
decider.

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 DMU

• End –user – This refers to the person or

people who uses the product of service. In
our television example, end users are
members of the entire family.
• Finance – The money or credit that
allows the purchase to be made.
• Gate-Keeper research

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 THANK YOU

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