Lectures 7-Consumer Behaviour

8/10/2019 Lectures 7-Consumer Behaviour

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CONSUMER BEHAVIOUR


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Consumers are not alike.

They vary in age, income, educational

qualifications and spending patterns.

Consumers are constantly involved in decision

making whether the products they purchased

are:

-Consumed slowly over time (such as a house or

a car which involve a complicated decision

process) or


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-Consumed quickly (such as food which may be

a relatively simple and routine decision-making

process).

HOW DO BUYERS MAKE THEIR BUYING

DECISIONS?


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Consumers do not make decisions in a

vacuum.

Rather, they are influenced by at least four

major factors

1. Psychological factors (e.g. Motivation-

which is an internal force that directs people to

act in a particular way or to satisfy a particularneed)


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2. Sociological/socio-cultural factors(e.g. Culture, family, social class,

reference groups)

3. Marketing mix factors (i.e. Price,promotion, distribution and product).

4. Situational factors (e.g. social

surroundings, physical surroundings,

temporal effects, antecedent states)


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Social surroundings refer to the social

environment in which the decision is takingplace. For example the people present at the time

might influence the decision.

Physical surroundings (e.g. having appropriate

music played in the store, prominent sales

posters, cleanliness of the store might influence

the decision)


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Temporal effects refer to aspects such as time of

the day, time of the year (for instance,

Christmas).

Antecedentrefers to aspects such as ones mood

or the amount or lack of cash on hand that can

influence choice.


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THE CONSUMER DECISON PROCESS

The buyer goes through the following decision

making stages.

Stage 1: Need Recognition

Stage 2: Search for InformationStage 3: Pre-Purchase Evaluation of Information

Stage 4: Purchase

Stage 5: Post Purchase Feelings


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The marketers job is to understand the buyers

behaviour and influences at each stage of thebuying process.

1STSTAGE: RECOGNITION OF NEEDThe first stage in the buying process is when the

buyer recognizes that he or she has a need.


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Major psychological factors that can influence

consumers recognition of needs are:

(i) Motivation (an internal force that directs peopleto act in a particular way or to satisfy a particular

need)

A person obviously has many needs that vary in

importance under different circumstances.

Therefore, the objectives of consumers are to satisfy

a hierarchy of needs.


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For example, Maslows Hierarchy of Needs

proposed that people have the following five hierarchy

of needs:Physiological (e.g. food, shelter, clothing etc)

Safety(e.g. insurance policy, fire extinguishers)

Belongingness and Love (e.g. Clubs, family)Self Esteem (e.g. status, education)

Self Actualization ( reaching ones full potential in life

e.g. in Art class, education, music, politics, religion)

(For a diagram see Exhibit 5-5 of Arens, Weigold and

Arens (2009) page 155)


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According to Maslow the first basic need (i.e.

Physiological need) dominates a persons

behaviour until it is satisfied; then the second needbecomes pre-potent until it is satisfied; and so on.

Although Maslow is not a perfect framework, it

provides marketers with a useful system for

identifying the possible needs that a consumer

might be seeking to satisfy.

It also explains why these needs change from time

to time.


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(ii) Attitude is another psychological factor that

can influence consumer decision.(NOTE: Attitude is a learned pre-disposition to

respond in a consistently favourable or

unfavourable manner with respect to a givenobject).

The object could be a product, brand, salesperson,

or retail store.


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Many consumer needs arise from internally

generated desires for food, shelter and clothing.

The need may also result from the breakdown of

the old product or from a constant need for

repairs.

Social interactions with friends or associates can

often lead to buyer interest in new products.


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Promotion-mix (i.e. advertising, personal selling,

sales promotion and publicity) can make peopleaware of unfilled wants or needs.


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In general, the stage of problem recognition can be

influenced by:

Psychological factors (e.g. motivation and

attitude),

Sociological/socio-cultural factors (e.g. Culture,

family, social class, reference groups)

Marketing mix factors (i.e. Price, promotion,

distribution and product).

Situational factors (e.g. social surroundings,

physical surroundings, temporal effects, antecedent

states)


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To influence this need recognition stage companies

can advertise to the following four broad of

markets (depending on the target markets theywish to reach):

1.Consumer markets (i.e. people who buy goodsand services for their own use);

2. Business markets (i.e. Organizations that buygoods and services to use or to resell).


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Within the business markets we have:

(i) Reseller markets (those companies that buy to

resell) and

(ii) industrial markets (those manufacturing

companies that buy products to be used to produce

other goods and services).3.Government markets (e.g. Federal, state

government etc).

4. Global markets or Transnational markets (i.e.markets in foreign countries),


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2ND STAGE: INFORMATION SEARCH

When the individual recognizes his (or her needs),he then enters into a state of information search for

alternative ways of filling the need.

The information search stage is important because

this is where marketing can help the buyer gather

necessary data by:


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-Training the sales people so that they will have the

right information to answer customers questions.

Such questions include:Can the old product be repaired?

If a new product is needed, what brands are

available?

What features are offered by different models? etc.


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Marketers at this stage of information search

should:

Have tags and brochures that informs buyersabout merchandise

Design the point-of-purchase displays, news

paper ads, television ads and radio commercialsthat give consumers information on:

-Prices

- Product availability

-Product desirable features

- Various payment methods etc.


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3RD STAGE: EVALUATION OF

ALTERNATIVESThis is where the buyer weighs the advantages and

disadvantages of the various alternatives and

eventually makes a decision.

Because this stage is a mental process, it is hard to

observe and consequently, is more difficult formarketing people to influence.

H k h ld b i i d h


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However, marketers should bear in mind that:

(i) Consumers view a product as a multi-attribute

objects, that is, as a bundle of attributes.

(ii) Consumers have been found to apply various

evaluation procedures to make a choice among

multi-attribute objects. The criteria that consumers

use in their evaluations include:

-Price

-Past experience

-Opinion of members of their families and other

reference groups.

-Attitudes towards various brands, etc


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4TH STAGE: PURCHASE

Once the customer has decided to buy, then the

seller has to complete the purchase transaction.

The job of the marketer at this stage includes:

-making the product conveniently available so that

the customers do not have to travel great distances

or wait in lines for it;

-the marketers should simplify the credit

arrangements including packaging and delivery.


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5TH STAGE: POST PURCHASE BEHAVIOUR

Typically, most buyers experience some postpurchase anxieties.

Leon Festinger refers to this state as Cognitive

dissonance.

Festinger theorises that people strive for internal

harmony, consistency or congruity among theircognitions (knowledge, attitudes, beliefs, values).


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Post-purchase cognitive dissonance occurs because

each of the alternatives considered by the consumers

usually has both advantages and limitations.

Therefore, when the purchase decision is finally

made, the selected alternatives have somedrawbacks.

At this stage, the marketer needs to have advertisingor personal selling that will reassure buyers.


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By stressing desirable features of a product through

promotion, it will reduce dissonance.

Finally, the way consumers are treated on returns,

repairs, warranty service etc, will influence the

decision process for subsequent purchases.

NOTE: This lecture is based on your text book andon Philip Kotler et. al; and W. Stanton marketing

books.

Documents

Lectures 7-Consumer Behaviour