What Is Consumer Behaviour?

What Is Consumer Behaviour?

Consumer behaviour is the study of how individuals, groups, and organisations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. Marketers must deeply understand buyer behaviour because the central purpose of marketing is to serve and satisfy customers — and you cannot do that without knowing how they think, feel and decide.

Factors Influencing Consumer Behaviour

Consumer purchases are strongly influenced by four major factors:

1. Cultural Factors — The most fundamental influence on a person's wants and behaviour:

• Culture — The set of basic values, perceptions, wants and behaviours learned by a person from their family and other key institutions. Culture is the most fundamental cause of a person's wants and behaviour.
• Subculture — Groups with shared value systems based on common life experiences (nationality, religion, racial group, geographic region). Subcultures form important market segments.
• Social class — Relatively permanent and ordered divisions in a society whose members share similar values, interests and behaviour. Determined by education, income, occupation, wealth and other variables.

2. Social Factors — Influence via relationships and group membership:

• Reference groups — Groups that have a direct (membership groups) or indirect influence on attitudes or behaviour. Opinion leaders within reference groups are especially important.
• Family — The most important consumer buying organisation in society. Husband, wife, and children's roles in buying decisions vary widely by product and culture.
• Roles and status — Each person's position in a group. People choose products that reflect their role and status in society.

3. Personal Factors — Individual characteristics:

• Age and life-cycle stage — Tastes in food, clothing, furniture and recreation are often age-related. Buying is also shaped by the stage in the family life cycle.
• Occupation — A person's job strongly influences goods and services purchased.
• Economic situation — Income, savings, borrowing power and attitudes toward spending versus saving all affect product choice.
• Lifestyle — A person's pattern of living expressed in their AIO dimensions: Activities, Interests and Opinions.
• Personality and self-concept — Each person's unique psychological characteristics influence buying behaviour. Brands also have personalities, and consumers prefer brands whose personalities match their own.

4. Psychological Factors — Internal mental processes:

• Motivation — A motive (or drive) is a need that is sufficiently pressing to direct a person toward satisfaction. Maslow's hierarchy arranges needs from most pressing (physiological: food, water, shelter) to least pressing (self-actualisation). People try to satisfy the most important need first before moving to the next.
• Perception — The process by which people select, organise and interpret information to form a meaningful picture of the world. Three perceptual processes: selective attention, selective distortion, selective retention.
• Learning — Changes in an individual's behaviour arising from experience. Drives, stimuli, cues, responses and reinforcement shape learning.
• Beliefs and attitudes — A belief is a descriptive thought about something. An attitude is a person's consistently favourable or unfavourable evaluation, feeling or tendency toward an object. Attitudes are hard to change.

The Buyer Decision Process (5 Stages)

Consumers typically pass through five stages when making a purchase:

1. Need Recognition — The buyer recognises a problem or need. It can be triggered by internal stimuli (hunger, thirst, a worn-out item) or external stimuli (an advertisement, a friend's recommendation, smelling coffee as you walk past a café).
2. Information Search — The buyer seeks information from: personal sources (family, friends, neighbours), commercial sources (advertising, salespersons, websites), public sources (consumer reports, social media) and experiential sources (handling, examining, using the product). User-generated content (UGC) — reviews, videos, blogs created voluntarily by consumers — is increasingly influential in this stage.
3. Evaluation of Alternatives — The consumer processes information to arrive at brand choices. Marketers need to study buyers to understand how they actually evaluate alternatives so they can take steps to influence that evaluation favourably.
4. Purchase Decision — The consumer forms a purchase intention and ultimately makes a purchase. Two factors can come between the intention and the decision: (1) attitudes of others (a friend says “don't buy that brand”) and (2) unexpected situational factors (sudden price increase, job loss, another product becomes more urgent).
5. Post-Purchase Behaviour — The consumer takes further action based on satisfaction or dissatisfaction. Satisfied customers buy again, tell others, and become brand advocates. Dissatisfied customers return the product, complain, or write negative reviews. Cognitive dissonance is the discomfort consumers feel after a difficult purchase decision — was this the right choice?

Roles in the Buying Process

Five different roles can be identified in most buying processes:

• Initiator — The person who first suggests buying a particular product or service
• Influencer — A person whose views or advice carry some weight in making the final buying decision
• Decider — The person who ultimately makes the buying decision (whether to buy, what to buy, how or where to buy)
• Buyer — The person who makes the actual purchase
• User — The person who consumes or uses the product or service

These five roles may be played by different people (e.g. a child initiates, parents decide and buy) or by the same person (solo purchase).

Types of Buying Behaviour

Buying behaviour varies greatly with the type of purchase decision:

• Complex buying — High involvement, significant brand differences. Buyers are highly involved and spend time researching (e.g. buying a car or house).
• Dissonance-reducing — High involvement, few brand differences. Buyer purchases quickly but may become uncertain after the purchase, leading to cognitive dissonance.
• Variety-seeking — Low involvement, significant brand differences. Buyers switch brands frequently for the sake of variety, not dissatisfaction.
• Habitual buying — Low involvement, few brand differences. Routine repurchase with little deliberation (e.g. buying salt or a familiar breakfast cereal).

The Adoption Process for New Products

When a new product is launched, consumers pass through five adoption stages:

1. Awareness — Consumer learns of the new product but lacks information
2. Interest — Consumer seeks information about the new product
3. Evaluation — Consumer considers whether trying the product makes sense
4. Trial — Consumer tries the product on a small scale
5. Adoption — Consumer decides to make full and regular use of the product

People differ in how quickly they adopt new products. Innovators (venturesome, first to try) are followed by early adopters (opinion leaders), then early majority, late majority (sceptical), and finally laggards (tradition-bound). Marketers target innovators and early adopters first to create buzz and credibility.

Five characteristics affect an innovation's rate of adoption: relative advantage (does it outperform existing options?), compatibility (does it fit consumer values and experience?), complexity (is it easy to understand and use?), divisibility (can it be tried on a limited basis?), and communicability (can results be easily observed or described?).