Consumer Behaviour
Lecture 1 – Introduction
Consumer behaviour is a process
Doesn’t just occur when the consumer pays for their good or service
Exchange – where two or more parties give and receive something of value
- An integral part of marketing
Consumer – the one who identifies their need or desire, makes a purchase and then
disposes of that product during the three stages of consumption process
- Most of the time other people play a role in these sequences of events
- The one who purchases the product or service may not be the same as the
one who uses it, such as a parent buying clothes for a teenager.
- Or in other times one person may act as the influencer, where they
recommend a certain product without actually buying or using it
- Consumers don’t necessarily have to be individuals they may be an
organisation or a group, where one or several people may purchase a
product that multiple people are going to use, such as the purchasing officer
ordering office supplies
- In larger organisations the purchasing decision may be down to a large group
of people, such as accountants, designers, engineers and sale personnel
The three stages of the consumption process from the Consumer’s Perspective:
1) Pre-purchase issues
- How does the consumer decide they need a product
- Where can they best learn about alternative sources
2) Purchase issues
- Is acquiring the product a stressful or pleasant experience
- What does this purchase say about the consumer
3) Post-purchase issues
- Is the product providing pleasure of performing its intended function
- How does the consumer eventually dispose of the product
- What are the environmental consequences of that disposure
The three stages of the consumption process from the Marketer’s Perspective
1) Pre-purchase issues
- How are attitudes towards products formed
- How do attitudes change
- How do consumers perceive which product is superior to another
2) Purchase issues
- How do situational factors, such as time pressure, or store displays affect the
consumer’s purchase decision
3) Post-purchase issues
- What determines if a customer is satisfied with a product
- Are they likely to purchase it again
- Does the consumer tell others about their experience with the product and
influence others’ purchase decisions
, Consumer Behaviour
Marketers need to understand the wants and needs of different consumer segments.
Society has evolved away from the concept of mass culture, wherein many
consumers share in the same preferences, to a much more diverse one where we
have our options have been enormously expanded
Because of this it has become more important than ever to identify these more
distinct market segments and tailor more specialised messages and products that
cater to these groups
Sometimes businesses identify their most faithful customers or heavy users as a
market segment
However, there are many other demographics whose data and trends marketers use
to reveal and also predict the size of markets for many products, for example:
Age
- Consumers of different age groups have different needs and wants
- However, those who belong to the same age group differ, they don’t
necessarily have the same set of values and common cultural experience
- For younger people, a company may build up a loyal customer base through
social media, with employees talking to them in a more relaxed and casual
tone
Gender
- Even from a young age, products are clearly marketed for boys and girls
- Marketing strategies are often based on assumptions about what will appeal
to each gender
- Such as microwaves being sold alongside TVs and radios and marketed
almost exclusively to men, as at the time these products would only appeal to
men
Family Structure
- A person’s family and marital status and marital status is another important
demographic as it influences a consumer’s spending priority
- Such as young bachelors and newlyweds being more likely to exercise, go out
to bars, concerts and movies and consume alcohol
- Families with young children are going to purchasing health foods and fruit
juices, whereas single-parent homes and those with older children buy more
junk food
Social Class and Income
- Belonging to the same social class are approximately equal in terms of their
income and social standing in the community
- They have similar occupations
- Same taste in music, clothing, leisure activities, and art
- These people also tend to socialise with each other and share many ideas and
values
, Consumer Behaviour
- The distribution of wealth is an important factor for marketers as it identifies
the groups that have the greatest buying power and market potential
Race and Ethnicity
- African, Hispanic and Asian Americans are the three fastest growing ethnic
groups in the US
- With society becoming more multicultural, there are an increasing number of
opportunities to develop and deliver specialised products to racial and ethnic
groups
Geography
- Companies alter products, and tailor make them to appeal to consumers
living in different parts of the country
- Such as changing the name of a product depending on where you live
Lifestyle
- Consumers may share demographics, such as age and gender, however, they
have different lifestyles
- How we feel about ourselves, our values, how we spend our spare time are
all factors that help determine the products that most appeal to us, or even
make us feel good
Segmenting by Behaviour: Relationships and “Big Data”
- Key to success is building a relationship between the customer that will last a
lifetime
- Relationship Marketing – marketers interacting with customers on a regular
basis thus giving them good reasons to maintain a bond with the company
- Database Marketing – tracking the buying habits of specific customers to
tailor products and messages specifically to these peoples wants and needs
Our choices as consumers relate in powerful ways to the rest of our lives.
Marketing has an influence on how we perceive the world
Ads show us how we should act
Pop culture has a far reaching impact on our live, be it how we acknowledge cultural
events to how we view social issues
Marketers are able to influence people’s preferences for movies and music
Our motivations to consume are complex and varied.
Consumers often buy products not because of what they do but for what they mean
Meaning that the role the product plays is an important factor for consumers
The deeper meaning of a product can help it stand out from other products and
services
Happiness is linked to satisfying needs and wants but meaningfulness is linked to
activities where individuals are able to express themselves and impact others in a
positive way
This brings up the distinction between a need and a want
- A need is something a person must have in order to live or achieve a goal
, Consumer Behaviour
- A want is manifestation of a need based on personal and cultural factors
Technology and culture create a new “always on” consumer.
24/7 access to smartphones has allowed consumers to have constant access to
online markets without actually needing to leave their homes
Consumers have instant access to information
The internet of things, where objects have devises inside them that communicate
with each other, is a growing trend
AI is becoming more and more powerful over time, allowing for faster and more
personalised ads for consumers
There are differing perspectives regarding how and what we should understand about
consumer behaviour.
Research into consumer behaviour is done for both academic pursuits and so marketing
bodies are informed in order to make practical decisions. This research can be divided into
two categories: The Positivity Perspective, wherein there is a focus on the objectivity of
science and seeing consumers as being able to make rational decisions. Conversely The
Interprets (or CCT) Perspective focuses on the subjectivity of each customer’s experience,
how their behaviour can be interpreted in many different ways, rather than just one single
explanation
Ethical business is good business
Ethics in business are rules by which actions in the marketplace are guided. Most in any
given culture are able to discern between right and wrong, good and bad and therefore
these standards are followed. Ethical issues are faced by marketers, they need to determine
the appropriate level of “want” they generate for their consumers to purchase things they
don’t really need or isn’t necessarily good for them. Furthermore, there is the issue of
materialism, the importance consumers attach to objects and goods and how far
organisations go in encouraging this mindset and behaviour.
Marketers are obliged to provide safe and functional products as part of their business
practices
Maximising customer satisfaction is desirable on both an ethical and financial level. Products
and advertainments are regulated to ensure they are safe, clear and accurate. Those who
research consumer behaviour can play a role in this, with those doing Transformative
Consumer Research (TRC) working towards bringing about real social change. Companies
also have a responsibility to social issues through their Corporate Social Responsibility (CSR)
practices.
Consumer Behaviour directly impacts major public policy in society
Lecture 1 – Introduction
Consumer behaviour is a process
Doesn’t just occur when the consumer pays for their good or service
Exchange – where two or more parties give and receive something of value
- An integral part of marketing
Consumer – the one who identifies their need or desire, makes a purchase and then
disposes of that product during the three stages of consumption process
- Most of the time other people play a role in these sequences of events
- The one who purchases the product or service may not be the same as the
one who uses it, such as a parent buying clothes for a teenager.
- Or in other times one person may act as the influencer, where they
recommend a certain product without actually buying or using it
- Consumers don’t necessarily have to be individuals they may be an
organisation or a group, where one or several people may purchase a
product that multiple people are going to use, such as the purchasing officer
ordering office supplies
- In larger organisations the purchasing decision may be down to a large group
of people, such as accountants, designers, engineers and sale personnel
The three stages of the consumption process from the Consumer’s Perspective:
1) Pre-purchase issues
- How does the consumer decide they need a product
- Where can they best learn about alternative sources
2) Purchase issues
- Is acquiring the product a stressful or pleasant experience
- What does this purchase say about the consumer
3) Post-purchase issues
- Is the product providing pleasure of performing its intended function
- How does the consumer eventually dispose of the product
- What are the environmental consequences of that disposure
The three stages of the consumption process from the Marketer’s Perspective
1) Pre-purchase issues
- How are attitudes towards products formed
- How do attitudes change
- How do consumers perceive which product is superior to another
2) Purchase issues
- How do situational factors, such as time pressure, or store displays affect the
consumer’s purchase decision
3) Post-purchase issues
- What determines if a customer is satisfied with a product
- Are they likely to purchase it again
- Does the consumer tell others about their experience with the product and
influence others’ purchase decisions
, Consumer Behaviour
Marketers need to understand the wants and needs of different consumer segments.
Society has evolved away from the concept of mass culture, wherein many
consumers share in the same preferences, to a much more diverse one where we
have our options have been enormously expanded
Because of this it has become more important than ever to identify these more
distinct market segments and tailor more specialised messages and products that
cater to these groups
Sometimes businesses identify their most faithful customers or heavy users as a
market segment
However, there are many other demographics whose data and trends marketers use
to reveal and also predict the size of markets for many products, for example:
Age
- Consumers of different age groups have different needs and wants
- However, those who belong to the same age group differ, they don’t
necessarily have the same set of values and common cultural experience
- For younger people, a company may build up a loyal customer base through
social media, with employees talking to them in a more relaxed and casual
tone
Gender
- Even from a young age, products are clearly marketed for boys and girls
- Marketing strategies are often based on assumptions about what will appeal
to each gender
- Such as microwaves being sold alongside TVs and radios and marketed
almost exclusively to men, as at the time these products would only appeal to
men
Family Structure
- A person’s family and marital status and marital status is another important
demographic as it influences a consumer’s spending priority
- Such as young bachelors and newlyweds being more likely to exercise, go out
to bars, concerts and movies and consume alcohol
- Families with young children are going to purchasing health foods and fruit
juices, whereas single-parent homes and those with older children buy more
junk food
Social Class and Income
- Belonging to the same social class are approximately equal in terms of their
income and social standing in the community
- They have similar occupations
- Same taste in music, clothing, leisure activities, and art
- These people also tend to socialise with each other and share many ideas and
values
, Consumer Behaviour
- The distribution of wealth is an important factor for marketers as it identifies
the groups that have the greatest buying power and market potential
Race and Ethnicity
- African, Hispanic and Asian Americans are the three fastest growing ethnic
groups in the US
- With society becoming more multicultural, there are an increasing number of
opportunities to develop and deliver specialised products to racial and ethnic
groups
Geography
- Companies alter products, and tailor make them to appeal to consumers
living in different parts of the country
- Such as changing the name of a product depending on where you live
Lifestyle
- Consumers may share demographics, such as age and gender, however, they
have different lifestyles
- How we feel about ourselves, our values, how we spend our spare time are
all factors that help determine the products that most appeal to us, or even
make us feel good
Segmenting by Behaviour: Relationships and “Big Data”
- Key to success is building a relationship between the customer that will last a
lifetime
- Relationship Marketing – marketers interacting with customers on a regular
basis thus giving them good reasons to maintain a bond with the company
- Database Marketing – tracking the buying habits of specific customers to
tailor products and messages specifically to these peoples wants and needs
Our choices as consumers relate in powerful ways to the rest of our lives.
Marketing has an influence on how we perceive the world
Ads show us how we should act
Pop culture has a far reaching impact on our live, be it how we acknowledge cultural
events to how we view social issues
Marketers are able to influence people’s preferences for movies and music
Our motivations to consume are complex and varied.
Consumers often buy products not because of what they do but for what they mean
Meaning that the role the product plays is an important factor for consumers
The deeper meaning of a product can help it stand out from other products and
services
Happiness is linked to satisfying needs and wants but meaningfulness is linked to
activities where individuals are able to express themselves and impact others in a
positive way
This brings up the distinction between a need and a want
- A need is something a person must have in order to live or achieve a goal
, Consumer Behaviour
- A want is manifestation of a need based on personal and cultural factors
Technology and culture create a new “always on” consumer.
24/7 access to smartphones has allowed consumers to have constant access to
online markets without actually needing to leave their homes
Consumers have instant access to information
The internet of things, where objects have devises inside them that communicate
with each other, is a growing trend
AI is becoming more and more powerful over time, allowing for faster and more
personalised ads for consumers
There are differing perspectives regarding how and what we should understand about
consumer behaviour.
Research into consumer behaviour is done for both academic pursuits and so marketing
bodies are informed in order to make practical decisions. This research can be divided into
two categories: The Positivity Perspective, wherein there is a focus on the objectivity of
science and seeing consumers as being able to make rational decisions. Conversely The
Interprets (or CCT) Perspective focuses on the subjectivity of each customer’s experience,
how their behaviour can be interpreted in many different ways, rather than just one single
explanation
Ethical business is good business
Ethics in business are rules by which actions in the marketplace are guided. Most in any
given culture are able to discern between right and wrong, good and bad and therefore
these standards are followed. Ethical issues are faced by marketers, they need to determine
the appropriate level of “want” they generate for their consumers to purchase things they
don’t really need or isn’t necessarily good for them. Furthermore, there is the issue of
materialism, the importance consumers attach to objects and goods and how far
organisations go in encouraging this mindset and behaviour.
Marketers are obliged to provide safe and functional products as part of their business
practices
Maximising customer satisfaction is desirable on both an ethical and financial level. Products
and advertainments are regulated to ensure they are safe, clear and accurate. Those who
research consumer behaviour can play a role in this, with those doing Transformative
Consumer Research (TRC) working towards bringing about real social change. Companies
also have a responsibility to social issues through their Corporate Social Responsibility (CSR)
practices.
Consumer Behaviour directly impacts major public policy in society
