Consumer behaviour

Have you ever thought about the steps you take before you make a purchase? Are you someone that insists research needs to be done in order to find the best deal? Or are you happy purchasing any product, no matter what brand, because you prefer variety?

Buyer behaviour can be grouped into 4 categories based on the type of purchase the buyer is making.

Habitual buying behaviour

This type of buying behaviour is where a consumer buys a product out of habit because they have bought the same product over a long period of time and may not even consider competitor brands. They may see no difference between competitors or may see no value in comparing. An example of habitual buying behaviour is when you go to the supermarket and buy your favourite everyday grocery items.

Variety seeking behaviour

In this type of buying behaviour, a consumer may switch between brands because they are seeking variety or because they are curious to try something new. They are not necessarily dissatisfied with the previous brands they have purchased, but they are not loyal to a particular brand each time they purchase. For example, when a consumer buys body wash or hand soap, they may wish to try a new scent or try a hand soap that foams.

Complex buying behaviour

Complex buying processes usually involve lots of research, thought and consideration by the consumer. This consumer is highly involved in the decision-making process because they are so invested in the outcome of their decision, unlike habitual and variety-seeking buying behaviours. Consumers would use this type of process when making high-risk purchases like a house, a car, a university course, a boat, etc.

Dissonance-reducing buying behaviour

The consumer is quite involved in this type of buying process as the purchase carries a high price, or it is an item that is not purchased frequently. Therefore, the buyer considers the purchase as important, yet may not conduct significant research about brands as the eventual purchase is usually made because the item is conveniently available across multiple brands or suppliers. The consumer usually finds it difficult to choose between brands and is worried they may make the wrong decision because there is not much variation between brands and the pricing.

There are 5 stages of the buyer’s decision process that describe the journey a customer takes before making a purchase (also referred to as the 'customer buying process').

Identify the problem

This is where the consumer identifies a gap and begins to look for a product to help fill that void.

Information search

At this stage, the consumer is aware of the product they need and will search online, face-to-face or through word of mouth.

Evaluate alternatives

The consumer will compare the prices, qualities and functionalities of each product.

Purchase

The consumer makes a decision on the product they will purchase.

Post-purchase

Feedback and evaluation are provided. Will the consumer become a regular customer? Or will this be a regretful purchase?

Have you ever thought about why your tastes or interests may be different from those of your friends or family? Why do you prefer a black outfit compared to your friend who tends to look for brightly coloured clothes?

There are critical reasons that can sway the decision-making between individuals and this comes down to psychological, social, cultural, economic and personal factors.

Even though not consciously aware of it, consumers always have a preference for, say, cleaning products, chocolates, drinks and even hair products. Curious? Next time you are shopping, look at what you have purchased in order to explore your own buying patterns.

Why is this relevant? Let's find out.

It is essential for marketers to have a sound understanding of what occurs in the customer’s mind--resulting in a buyer’s response. Buyer characteristics play a big role in the consumer’s behaviour process.

The primary 4 factors that help form the buyer’s characteristics are:

1. cultural
2. social
3. personal
4. phycological.

This graphic illustrates the buyer’s influencing factors:

Cultural factors

A buyer’s influencing cultural factors may be broken down into the following sections and factors.

Culture

This is the most basic contributing factor to a person’s wants and behaviour. It is a set of basic values, perceptions, wants and behaviours learned by a member of society from family and other important institutions.

Cultural group or a subculture

This is a group of people with shared value systems based on common life experiences and situations.

Social classes

These are relatively permanent and ordered divisions in a society, whose members share similar values, interests and behaviours.

Social factors

There are 4 main social factors that influence consumers:

1. consumers’ groups
2. family
3. social roles
4. status.

Various groups are formed when two or more people interact to accomplish individual or mutual goals.

An individual’s attitudes and behaviour are influenced by many small groups.

Do recognise any of the five groups listed below?

1. Membership groups: Typically family, religious and professional groups.

2. Reference groups: A group of individuals that consumers might compare themselves against and may strive to emulate–a popular celebrity, for example.

3. Aspirational groups: An individual does not belong to this group, but would want to be a part of it.

4. Opinion leaders: These may be people such as influencers (buzz marketing can be used to enlist opinion leaders as brand ambassadors).

5. Online social networks: Social network content that promotes products to build closer relationships with consumers.

Personal factors

There are 6 personal factors that affect consumer behaviour:

• age and lifecycle stage
• education
• occupation
• economic circumstances
• lifestyle
• personality and self-concept.

Psychological factors

There are 5 psychological factors affecting consumer behaviour:

• motivation
• perception
• learning
• beliefs
• attitudes.

Motivation

'Motivation research' refers to qualitative research designed to probe consumers’ hidden, subconscious motivations. For instance, a baby boomer who buys a sports car might explain that they simply like the feel of the wind in their hair. At a deeper level, they may be buying the car to feel young and independent again.

Perception

Perception is the process by which people select, organise and interpret information to form a meaningful picture of the world. A consumer's perception helps them give meaning to their environment.

Three examples of the perception of consumers are explained below.

1. Selective Attention: Consumers are constantly bombarded with information and will screen out stimuli.
2. Selective Distortion: Messages do not always come across in the same way the sender intended.
3. Selective Retention: People will forget much that they learn, but will tend to retain information that supports their attitudes and beliefs.

Learning

'Learning' refers to the changes in an individual’s behaviour arising from experience. Learning theorists say that most human behaviour is learned. The consumer’s learning factor has an influence on their learning effect; and also on the practical result of a marketing strategy.

Belief

Belief is a descriptive thought that a person holds about something. Beliefs may be based on real knowledge, opinion or faith, and may or may not carry an emotional charge.

Marketers are interested in the beliefs that people formulate about specific products and services because these beliefs make up product and brand images that affect buying behaviour. If some of the beliefs prevent purchase, the marketer will want to launch a campaign to 'correct' those beliefs.

Attitudes, however, are difficult to change; thus, companies generally try to fit their products into existing attitudes rather than attempt to change attitudes.

Attitude

'Attitude' refers to a person’s consistently favourable or unfavourable evaluations, feelings and tendencies towards an object or idea. There are 3 main components of attitude that influence consumer behaviour.

A marketer's job is to keep up-to-date with the latest trends in consumer behaviour and influences that surround purchases. They must continually work to gather the information that influences the decision-making process and then launch advertising campaigns to make consumers believe the products are 'needs' rather than 'wants'.

Being aware of what sways consumers into making purchases allows marketers to understand how they can connect with the target audience to achieve profitability for their business.

People don’t know what they want until you show it to them. This famous quote is from the one and only Steve Jobs–co-founder of Apple.

Apple is a prime example of a company that has changed the world with products that many consumers now believe they need rather than want! Apple’s customer base has become so loyal that purchasing new devices regularly without considering alternatives or competitors is commonplace.

Trying to understand what goes on in a consumer’s head and exactly what makes them purchase is a goal of every business. The only way to do this is to study the psychological principles, theories and models of consumer behaviour.

Consumer buying habits are continually evolving, so businesses need to keep up with ongoing trends and habits.

Originally, it was believed consumers were straightforward and consistent; however, with ongoing research, it has become apparent that consumers are unpredictable and have numerous factors that can determine their decision-making when buying products.

Businesses aim to understand this behaviour through 'consumer behaviour models'.

Research helps identify the common behaviours among particular groups and how this can be used to predict reactions from customers. The models can be split into 2 groups: traditional and contemporary.  However, in this topic, we will focus on the traditional models of consumer behaviour.

The Economic Model

This is one of the oldest models used by economists. It focuses on the importance of monetary or financial considerations whilst making a decision. 

The model states how individuals try to maximise their satisfaction by investing the minimum amount (money or resources) to meet their needs and wants (quantity).

This is reflected in the income effect, substitution effect and price effect.

• Income effect: When a person earns more income, they will have more money to spend and so they will purchase more.

• Substitution effect: If a substitute product is available at a cheaper price, then the product in question will be less preferred or utilised by people.

• Price effect: When the price of a product is less, consumers tend to purchase more quantify of that product. This may include discounts or bulk purchases where customers are able to purchase a maximum quantity for the best price.

This model focuses purely on the price which for many is deemed an unsuccessful representation of consumer behaviour due to the lack of a broader perspective that can influence (both internally and externally) consumers' decision-making.

It is seen as one-dimensional and assumes how consumers behave based on money and economics. It does not take into consideration social, cultural or personal factors.

This is where other models come to play as they recognise other vital aspects such as perception, motivation, learning, personality and cultural factors.

The Learning Model

This model is strongly influenced by Russian Physiologist Ivan Pavlov’s theory of 'classical conditioning'.

Pavlov’s classical conditioning experiments centred around training dogs to respond to the sound of a bell that was associated with food. The dogs were conditioned to associate the bell with food and they would salivate when they heard it.

The Learning Model of consumer behaviour tries to predict consumer behaviour in response to drives.

Drives 

Can be internal needs that are often presented as the lower tiers on Abraham Maslow’s hierarchy of needs (see below). Internal drives include physiological needs like food and shelter.

1. Self-actualisation
2. Esteem
3. Love/belonging
4. Safety
5. Physiological

Learned drives are associated with the higher tiers on the hierarchy of needs (e.g. social approval, confidence, creativity).

Consumer drives are triggered by 2 types of cues:

1. Product cues: These are received by the consumer directly from the product (e.g. its colour, style or price). 
2. Informational cues: These are received by the consumer from other sources (e.g. word of mouth, promotion and advertising).  

Reinforcement

Reinforcement occurs when the consumer’s experience with the product is good. If the consumer is happy and satisfied with the purchase they are more likely to repeat the purchase, strengthening the association the product has with the cues and the consumer's drive.

The Psychoanalytic Model

The next example of a consumer behaviour model is the 'psychoanalytic model'. This theory is derived from the pioneer behind modern-day psychology, Sigmund Freud.

Freud introduced how various components of personality can act as a motive in human behaviour. According to his theory, individuals operate at conscious and subconscious levels to identify their desires, thoughts, interests and needs. This model has been used

Sigmund Freud divided the human personality into 3 components: the id, the superego and the ego.

ID

This focuses on the human instinctive elements--the desires individuals are born with. They are primitive and operate largely for pleasure and avoidance of pain.

When relating this to consumer behaviour, individuals may have specific interests and products that they gravitate toward without truly understanding why it appeals to them. They just know it’s something they need and it feels right to have.

It’s important to note that this behaviour can be unconscious and can be explained through their individual personality and inborn desires.

Superego 

This identifies the internal expression of society's moral and ethical codes of conduct. It drives the individual to fulfil their needs in a socially-acceptable function--individuals may direct their behaviour to satisfy their desires in a realistic and socially-accepting way.

Ego

This is when consumers try to balance between both the id and superego according to reality and rational thinking. It is obtained from both parents and society as it provides individuals with a sense of right and wrong when making decisions and judgements.

This is relevant to businesses as they have taken this approach to sell products that come with a story and image behind them. The view is that buyers will be influenced by symbolic factors and this will ultimately drive them into buying a product.

Freud’s theory essentially describes humans as incomplete puzzles and advertising companies strategise their marketing techniques to fit the mould of a puzzle piece each individual is missing.

For example, say you see an ad for a tailored suit. As humans, it is in our nature to want to fit in within society. We have the need to feel accepted and capable. You notice this ad is marketing these suits as a symbol of intelligence and success. Within their campaign you see a man wearing this suit, driving an expensive car, and demanding respect from his peers. When looking at this ad, it may appeal to you as the message you have taken from this is: that for people to find you successful, you need to wear a tailored suit.

Marketers use this approach to appeal to desires individuals have.

The Sociological Model

This model is the most used model that marketers utilise when attracting consumers. It has created the foundation for techniques used within advertisements as it shows that purchases are influenced by an individual's place within society and the group they may fit into. These groups will exert influence on their buying--this can be family, friends, work groups or hobby groups.

They believe an individual will essentially purchase items based on what they believe is appropriate to the societal groups they find themselves in. By doing this, consumers will believe that when purchasing a product, they will maintain their position in that group.

To thrill consumers, marketers want to sell to the consumers' desires so the individuals can continue to conform to their lifestyles within their various groups.

Consider the examples below.

Adidas advertisement to make consumers believe their shoes will help them run faster.

JD advertisement to show celebrities wearing their clothes. If consumers are in groups within society that look up to celebrities as role models or idols they will want to keep updated with the latest fashion trends.

If consumers are looking to lose weight, they will probably be interested in companies that can guarantee fast results.

If consumers work within the corporate world, they will probably need to continue to maintain their dress requirements to keep up with their co-workers.

Understanding the different reasons why consumers are driven to purchase will help marketers map their strategies and marketing messages. These will be used to create eye-catching products with the correct pricing to hook their target audience.

Marketers also use these models to assess trends and observe the changes in the market in order for them to keep up with demand--enabling them to predict and plan the best times to launch their products and special offers.

If marketers can get this right, they will see positive feedback from consumers and perhaps even gain customer loyalty and retention which will ultimately help build their brand.

What type of buyer are you? 

Now that you have had the opportunity to learn about consumer behaviour and the factors that come into place when we make decisions, have you thought about the process you take when purchasing items? Are you someone that does research to find the best deal? Are you loyal to one brand? Or do you simply just shop to meet your basic needs?  

In this activity, reflect on what type of consumer you are. 

Below, you will see a set of questions. Select A, B or C in response to each question. This will help identify which type of consumer you are.

What kind of consumer are you?

1. Before making a major purchase, I research the product. 
   1. Always
   2. Sometimes
   3. Never 
2. Bringing a grocery list is important when shopping.  
   1. Always
   2. Sometimes
   3. Never 
3. I check a store’s return and refund policy before I buy things. 
   1. Always
   2. Sometimes
   3. Never 
4. I love sales and coupon codes. 
   1. Always
   2. Sometimes
   3. Never 
5. I love buying bulk.
   1. Always
   2. Sometimes
   3. Never 
6. I’m happy to return a product if it’s not up to standard. 
   1. Always
   2. Sometimes
   3. Never 
7. I always try to get the best deal. 
   1. Always
   2. Sometimes
   3. Never 
8. I’m not a big fan of emotional and impulsive buying.  
   1. Always
   2. Sometimes
   3. Never 
9. I think products need to be compared before making a purchase.
   1. Always
   2. Sometimes
   3. Never 
10. If I have a question about a product, I ask a salesperson about it until my question is answered. 
    1. Always
    2. Sometimes
    3. Never 
11. I always make sure my receipts are kept.
    1. Always
    2. Sometimes
    3. Never 
12. I don’t focus on brand names. 
    1. Always
    2. Sometimes
    3. Never 

Count the number of As, Bs, and Cs you have selected.

If you answered mostly As: 

You are a shopper that likes to research products before making the commitment to buy. Your decisions are very well thought out and you don’t usually spend your money unless you need to. You love your deals and sales and know your rights as a consumer.   

If you answered mostly Bs: 

You have a good foundation when it comes to using your money wisely; however, you still find moments where you see yourself making impulsive purchases. It would be good to find some products on sale as well as become used to using coupons in order to get the best deal. You don’t really focus on keeping your receipts so it would be important to keep track so you are aware of what you spend your money on. There is always room for improvement.  

If you answered mostly Cs: 

You have some areas of improvement when it comes to spending and using your money wisely. You don’t seem to really care about finding the right deal and saving your money. You also might want to learn more about your rights as a consumer to make sure you are not being cheated. Try to find coupons and do some research on the products you purchase before making a commitment. Hopefully, this will help you save money in the long run and help you become aware of where your money is spent.