Chapter 1: Introduction to consumer behaviour
Consumer behaviour defined:
- Describes a multitude of mental and physical processes associated with consumer decision making.
- Includes all related activities of consumers/buyers from pre purchase stage when they begin thinking about purchasing,
through to actual purchase stage phase, to post purchase evaluation.
- Context dependent always.
Multiple disciplines and their contribution to the field
Economic, psychological, sociological, cultural
Studying consumer behaviour from:
Economic perspective:
- Investigation of consumers behaviour from a rational viewpoint
- Consumers formulate one's needs in terms of concrete and rational criteria
- Can’t only rely on economic principles
Psychological perspective:
- Acknowledge individual consumer traits Motivation, Personality, Attitude, Perceptions.
- Addresses consumers product preference at a personal level.
- Brands character is shaped to specific personality traits to attract market segments.
- Consumers are often attracted to products/brands the enhance or support personalities
- Temporal choices: Temptations of immediate ownership of a product can exceed consumers concern about obligations
to pay back multiple instalments with interest in the future.
Sociological and socio-psychological perspectives:
- Sociology: Studies human behaviour at group or society level. Focuses on society
- Social psychology: Studies individuals.
- Provides theoretical frameworks that analyses/interprets cross cultural influences in society.
- Interprets issues like consumers socioeconomic status, lifestyle and socio-psychological aspects of consumption.
- Consumer judgments are based on shared meaning they attach to certain images, brands and products.
- These perspectives are used to design measuring instruments and interpret findings.
Cultural perspective
- Anthropology: Study of humans/human behaviour and societies in the past and present. Focuses on culture.
- Cultural anthropology: Helps understand consumption behaviour and product needs of specific cultures.
- cultural perspective acknowledges long-term influences on consumers consumption practices and accentuates deeper
understanding of the meaning of products, brands and symbols in a cultural context.
- Etic Perspective: Approach that considers viewpoint of other cultures.
- Emic Perspective: Specific to one culture
Why decision making is important to marketers
- Marketers aim to influence consumer decisions
- It's difficult to predict consumer decisions as they differ in terms of how and why they were made, type of decision and
who the decision makers are and where consumers are located.
Simple vs Complex decision making
Simple consumer decisions
- Reasonable degree of experience and skill.
- Product holds minimal risk.
- Product is easy to replace.
- Selection of reputable brand.
Complex consumer decisions
- Consumer has little or no experience.
- Some form of risk attached.
- Many product alternatives exist.
,Impulsive purchase decisions
- Fairly swift.
- This is a purchase decision person makes at a point of purchase without any prior consideration.
example: Buying a chocolate when paying for groceries.
Habitual Purchase decisions
- These are purchase decisions based on similar decisions made in the past.
example: Buying your favourite brand of tea every month.
Factors that influence buying decisions
- Consumer skill and ability to handle the buying decision.
- Consumers involvement during decision process owing to particular interest in the process or the lack thereof
- Variety of products to choose from
- Context in which the decision is made
Handling consumer decisions
Simple consumer decisions
- Little external information
- Personal info from friends and family or generally trusted people
Complex consumer decisions
- More info is required as complexity increases
- This is non personal info from technical reports, ads and electronic media
- Takes time and effort
The consumer decision making process
Inputs → Process → Outputs (3 stages)
Inputs
Personal/Internal level:
- Customers’ existing knowledge
- Learning, prior experience
- Personal characteristics such as motives, intellectual capacity, perception, personality and attitude
External level:
- Influenced by marketing and socio-cultural factors
- Controllable marketing forces: Marketing related factors that can be manipulated by an organization such as product,
price, place, process and personnel.
- Uncontrollable marketing forces: Economic conditions, public policy, competition in marketplace and forces of nature
- Socio-cultural factors: social status, cultural impacts, family influences
Process
Phases of process stage:
1. Need recognition:
- Any given point when a consumer needs something
2. Information search:
- Gathered pre-purchase information will depend on the urgency or seriousness of the product need
- Limited search: experienced consumer, minimal risks, reputable brand
- Extensive search: Less experienced consumer, pertinent risk perception, unfamiliar product brands
3. Evaluation of alternatives:
Evoked set of possibilities: consumer identifies number of possibilities
- 3-7 possible product choices ensure less intimidating and confusing evaluation process
- Evoked set: includes products/brands that consumers like and are familiar with
- Consumers identifies more acceptable alternatives and rejects products that are less acceptable
,Decision rules:
- Used to identify most suitable alternative from evoked set of products
Compensatory strategy:
Consumer assigns a score to each relevant product attribute to identify product with highest weighted score
Non-compensatory strategy:
Does not allow one positive attribute to compensate for one or more negative features of a product/service 4 options when
using this strategy:
1. Conjunctive rule:
Consumers assign certain minimum acceptable levels or cut off points for project features
2. Disjunctive rule:
Products that meet or exceed minimum cut off points are retained
3. Lexicographic rule:
Consumers evaluate potentially suitable products individually by considering product features in order of importance
4. Affect referral rule:
Applied when consumer considers an entire product based on overall perceptions gained from experience or prior exposure to a
brand
Outputs
Actual consumer decision depends on consumer perception of most important criteria
Cognitive dissonance:
- Feeling of discomfort or uncertainty consumer experiences immediately after purchase has been concluded
- more likely to occur after an expensive purchase
Main cause of cognitive dissonance:
- conscious awareness of positive attributes of products not selected and the realization that
- the decision can't be easily reversed
Positive feedback relieves cognitive dissonance:
- once consumers start using product and concludes it performs to expectation
- when someone else admires product choice indicating it was a wise decision
- when concrete evidence that supports product choice is performed
Positive disconfirmation:
- product performs better than expected
- cognitive discrepancy: product exceeded expectations
- culminates as consumer satisfaction
- satisfied customers more likely to return to where they received good service
Negative disconfirmation:
- product fails consumer expectations
- negative cognitive discrepancy
- will cause disconfirmation unless consumer finds good reason to explain the negative disconfirmation
The evolution of the marketing concept
Historical overview
production orientation:
- second half of the 1940s
- increase of production of goods to overcome shortage at the time
- philosophy was to manufacture and sell whatever products the market demanded
- production was poorly planned in terms of consumer product specific needs
- market became overstocked with low quality products
, product orientation:
- 1950s
- particular attention to quality of products
- many products weren't designed with consumer needs in mind
sales orientation:
- 1960s
- manufacturers revised effort to sell abundance of goods on the market
- transaction orientated efforts
- aggressive, persuasive sales techniques
- typical when product supply exceeds customer need
Customer orientation:
- 1960s
- John F Kennedy propagated consumer Bill of Rights
- fundamental part of his campaign
societal marketing concept:
- aims to protect consumers and to prevent exploitation of vulnerable consumers by overenthusiastic marketers
retro marketing:
- consumers are cleverly tricked into becoming interested in new product developments through ingenious marketing
techniques
- old brands revived by relying on nostalgia
relationship orientation:
- since 1990s
- customer care
- it costs 5 times more to attract new customers than it is to retain one existing one
- focuses on responsibility of retailers to secure long-term, profitable relationships with customers and stakeholders
Personal/social marketing orientation:
- gaining momentum as a result of technology such as the Internet and cell phone connectivity
Consumer behaviour defined:
- Describes a multitude of mental and physical processes associated with consumer decision making.
- Includes all related activities of consumers/buyers from pre purchase stage when they begin thinking about purchasing,
through to actual purchase stage phase, to post purchase evaluation.
- Context dependent always.
Multiple disciplines and their contribution to the field
Economic, psychological, sociological, cultural
Studying consumer behaviour from:
Economic perspective:
- Investigation of consumers behaviour from a rational viewpoint
- Consumers formulate one's needs in terms of concrete and rational criteria
- Can’t only rely on economic principles
Psychological perspective:
- Acknowledge individual consumer traits Motivation, Personality, Attitude, Perceptions.
- Addresses consumers product preference at a personal level.
- Brands character is shaped to specific personality traits to attract market segments.
- Consumers are often attracted to products/brands the enhance or support personalities
- Temporal choices: Temptations of immediate ownership of a product can exceed consumers concern about obligations
to pay back multiple instalments with interest in the future.
Sociological and socio-psychological perspectives:
- Sociology: Studies human behaviour at group or society level. Focuses on society
- Social psychology: Studies individuals.
- Provides theoretical frameworks that analyses/interprets cross cultural influences in society.
- Interprets issues like consumers socioeconomic status, lifestyle and socio-psychological aspects of consumption.
- Consumer judgments are based on shared meaning they attach to certain images, brands and products.
- These perspectives are used to design measuring instruments and interpret findings.
Cultural perspective
- Anthropology: Study of humans/human behaviour and societies in the past and present. Focuses on culture.
- Cultural anthropology: Helps understand consumption behaviour and product needs of specific cultures.
- cultural perspective acknowledges long-term influences on consumers consumption practices and accentuates deeper
understanding of the meaning of products, brands and symbols in a cultural context.
- Etic Perspective: Approach that considers viewpoint of other cultures.
- Emic Perspective: Specific to one culture
Why decision making is important to marketers
- Marketers aim to influence consumer decisions
- It's difficult to predict consumer decisions as they differ in terms of how and why they were made, type of decision and
who the decision makers are and where consumers are located.
Simple vs Complex decision making
Simple consumer decisions
- Reasonable degree of experience and skill.
- Product holds minimal risk.
- Product is easy to replace.
- Selection of reputable brand.
Complex consumer decisions
- Consumer has little or no experience.
- Some form of risk attached.
- Many product alternatives exist.
,Impulsive purchase decisions
- Fairly swift.
- This is a purchase decision person makes at a point of purchase without any prior consideration.
example: Buying a chocolate when paying for groceries.
Habitual Purchase decisions
- These are purchase decisions based on similar decisions made in the past.
example: Buying your favourite brand of tea every month.
Factors that influence buying decisions
- Consumer skill and ability to handle the buying decision.
- Consumers involvement during decision process owing to particular interest in the process or the lack thereof
- Variety of products to choose from
- Context in which the decision is made
Handling consumer decisions
Simple consumer decisions
- Little external information
- Personal info from friends and family or generally trusted people
Complex consumer decisions
- More info is required as complexity increases
- This is non personal info from technical reports, ads and electronic media
- Takes time and effort
The consumer decision making process
Inputs → Process → Outputs (3 stages)
Inputs
Personal/Internal level:
- Customers’ existing knowledge
- Learning, prior experience
- Personal characteristics such as motives, intellectual capacity, perception, personality and attitude
External level:
- Influenced by marketing and socio-cultural factors
- Controllable marketing forces: Marketing related factors that can be manipulated by an organization such as product,
price, place, process and personnel.
- Uncontrollable marketing forces: Economic conditions, public policy, competition in marketplace and forces of nature
- Socio-cultural factors: social status, cultural impacts, family influences
Process
Phases of process stage:
1. Need recognition:
- Any given point when a consumer needs something
2. Information search:
- Gathered pre-purchase information will depend on the urgency or seriousness of the product need
- Limited search: experienced consumer, minimal risks, reputable brand
- Extensive search: Less experienced consumer, pertinent risk perception, unfamiliar product brands
3. Evaluation of alternatives:
Evoked set of possibilities: consumer identifies number of possibilities
- 3-7 possible product choices ensure less intimidating and confusing evaluation process
- Evoked set: includes products/brands that consumers like and are familiar with
- Consumers identifies more acceptable alternatives and rejects products that are less acceptable
,Decision rules:
- Used to identify most suitable alternative from evoked set of products
Compensatory strategy:
Consumer assigns a score to each relevant product attribute to identify product with highest weighted score
Non-compensatory strategy:
Does not allow one positive attribute to compensate for one or more negative features of a product/service 4 options when
using this strategy:
1. Conjunctive rule:
Consumers assign certain minimum acceptable levels or cut off points for project features
2. Disjunctive rule:
Products that meet or exceed minimum cut off points are retained
3. Lexicographic rule:
Consumers evaluate potentially suitable products individually by considering product features in order of importance
4. Affect referral rule:
Applied when consumer considers an entire product based on overall perceptions gained from experience or prior exposure to a
brand
Outputs
Actual consumer decision depends on consumer perception of most important criteria
Cognitive dissonance:
- Feeling of discomfort or uncertainty consumer experiences immediately after purchase has been concluded
- more likely to occur after an expensive purchase
Main cause of cognitive dissonance:
- conscious awareness of positive attributes of products not selected and the realization that
- the decision can't be easily reversed
Positive feedback relieves cognitive dissonance:
- once consumers start using product and concludes it performs to expectation
- when someone else admires product choice indicating it was a wise decision
- when concrete evidence that supports product choice is performed
Positive disconfirmation:
- product performs better than expected
- cognitive discrepancy: product exceeded expectations
- culminates as consumer satisfaction
- satisfied customers more likely to return to where they received good service
Negative disconfirmation:
- product fails consumer expectations
- negative cognitive discrepancy
- will cause disconfirmation unless consumer finds good reason to explain the negative disconfirmation
The evolution of the marketing concept
Historical overview
production orientation:
- second half of the 1940s
- increase of production of goods to overcome shortage at the time
- philosophy was to manufacture and sell whatever products the market demanded
- production was poorly planned in terms of consumer product specific needs
- market became overstocked with low quality products
, product orientation:
- 1950s
- particular attention to quality of products
- many products weren't designed with consumer needs in mind
sales orientation:
- 1960s
- manufacturers revised effort to sell abundance of goods on the market
- transaction orientated efforts
- aggressive, persuasive sales techniques
- typical when product supply exceeds customer need
Customer orientation:
- 1960s
- John F Kennedy propagated consumer Bill of Rights
- fundamental part of his campaign
societal marketing concept:
- aims to protect consumers and to prevent exploitation of vulnerable consumers by overenthusiastic marketers
retro marketing:
- consumers are cleverly tricked into becoming interested in new product developments through ingenious marketing
techniques
- old brands revived by relying on nostalgia
relationship orientation:
- since 1990s
- customer care
- it costs 5 times more to attract new customers than it is to retain one existing one
- focuses on responsibility of retailers to secure long-term, profitable relationships with customers and stakeholders
Personal/social marketing orientation:
- gaining momentum as a result of technology such as the Internet and cell phone connectivity
