consumer behaviour

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1. Introduction

Consumers make many buying decisions every day. Most large companies research consumer buying decisions in depth to answer questions about what, where, when, why, how, and how much consumers buy. Marketers can study actual consumer purchases to find out what they buy, where and how much. But learning about the whys of consumer buying behaviour is not so easy; the answers are often locked deep within the consumer’s head.

The central question for marketers is How do consumers respond to various marketing efforts the company might use? The starting point is the stimulus-response model of buyer behaviour (Figure 1). It shows that marketing and other stimuli enter the consumer’s “black box” and produce certain responses. Marketing stimuli consist of four Ps product, price, place and promotion. Other stimuli include major forces and events in the buyer’s environment economic, technological, political and cultural. All these inputs enter the buyer’s black box, where they are turned into a set of observable buyer responses product choice, brand choice, dealer choice, purchase timing, and purchase amount.

The marketer wants to understand how the stimuli are changed into responses inside the consumer’s black box, which has two parts. First, the buyer’s characteristics influence how he or she perceives and reacts to the stimuli. Second, the buyer’s decision process itself affects the buyer’s behaviour. We look at buyer characteristics as they affect buying behaviour and then at the buyer decision process. (Kotler & Armstrong (000), Marketing � An Introduction, 5th Edition, Prentice-Hall Inc, USA)

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Figure 1

. Characteristics Affecting Consumers Behaviour



The key factors affecting consumer behaviour are culture, social, personal and psychological. The sub-factors are defined under each of the following factors

.1. Cultural Factors

These may influence marketing strategy planning in terms of implementing your product on an international scale and having to localise the product and its benefits to meet with cultural or social standards. It exerts the broadest and deepest influence on consumer behaviour. The marketer needs to understand the role played by the following buyer’s;



· Culture � It is the set of basic values, perceptions, wants and behaviours learned by a member of society from family and other important institutions. Every group or society has a culture, and cultural influences on buying behaviour may vary greatly from country to country. Failure to adjust to these differences can result in ineffective marketing or embarrassing mistakes. Marketers are always trying to spot cultural shifts in order to discover new products that might be wanted. The shift toward informality has resulted in more demand for casual clothing and simpler home furnishings. And the increased desire for leisure time has resulted in more demand for convenience products and services.

· Subculture � Each culture contains smaller subcultures, or groups of people with shared value systems based on common life experiences and situations. Subcultures include nationalities, religions, racial groups and geographic regions. Many subcultures make up important market segments, and marketers often design products and marketing programs tailored to their needs.

· Social classes � They are society’s relatively permanent and ordered divisions whose members share similar values, interests and behaviours. Social class is not determined by income but is measure as a combination of occupation, income, education, wealth and other variables. In some social systems, members of different classes are reared for certain roles and cannot change their social position. Marketers are interested in social class because people within a given social class tend to exhibit similar buying behaviour. Social classes show distinct product and brand preferences in areas such as clothing, home furnishings, leisure activity and automobiles.

.. Social Factors

These may influence marketing strategy planning in terms of identifying which groups in society influence the target market the most thus allowing for promotional activities to be directed towards the ‘influencers’. A consumer’s behaviour is influenced by the following;



· Groups � When groups have a direct influence and to which a person belongs are membership groups. In contrast, reference groups serve as direct or indirect points of comparison or reference in forming a person’s attitudes or behaviour. People often are influenced by reference groups to which they do not belong. Marketers try to identify the reference groups of their target markets. Reference groups expose a person to new behaviours and lifestyles, influence the person’s attitudes and self-concept and create pressures to conform that may affect the person’s product and brand choices. The importance of group influence varies across products and brands. It tends to be strongest when the product is visible to others whom the buyer respects. Manufacturers of products and brands subjected to strong group influence must figure out how to reach opinion leaders. Many marketers try to identify opinion leaders for their products and direct marketing efforts towards them.

· Family � Family members can strongly influence buyer behaviour. The family is the most important consumer buying organization in society. Marketers are interested in the roles and influence of the husband, wife and children on the purchase of different products and services. Couples’ involvement varies widely by product category and by stage in the buying process. Buying roles change with evolving consumer lifestyles.

· Role and Status � A person belongs to many groups � family; clubs; organizations. The person’s position in each group can be defined in terms of both role and status. A role consists of the activities people are expected to perform according to the persons around them. Each role carries a status reflecting the general esteem given to it by society. People often choose products that reflect their roles and status in society.

.. Personal Factors

The planning of marketing strategies must incorporate personal factors as they influence greatly the decision making process that the consumers use i.e. a person’s economic situation will greatly affect product choice or looking at the family lifecycle, a consumer may be young and still be strongly influenced by family members and the socialisation process they are adopting. A buyer’s decisions are influenced by personal characteristics such as;

· Age and Life-cycle stage

People change the goods and services they buy over their life-times. Buying is also shaped by the stage of the family life cycle, the stages through which families might pass as they mature over time. Marketers often define their target markets in terms of life-cycle stage and develop appropriate products and marketing plans for each stage. Traditional family life-cycle stages include young singles and married couples with children. Marketers are increasingly catering to a growing number of alternative, non-traditional stages such as unmarried couples, couples marrying later in life, childless couples, single parents, extended parents, and others.

· Occupation

A person’s occupation affects the goods and services bought. Blue-collar workers tend to buy more rugged work clothes, whereas white-collar workers buy more business suits. Marketers try to identify the occupational groups that have an above-average interest in their products and services. A company can even specialize in making products needed by a given occupational group. Thus, computer software companies will design different products for brand managers, accountants, engineers, lawyers and doctors.

· Economic Situation

A person’s economic situation will affect product choice. Marketers of income-sensitive goods watch trends in personal income, savings and interest rates. If economic indicators point to a recession, marketers can take steps to redesign, reposition and re-price their products accordingly.

· Lifestyle

A person’s pattern of living as expressed in his or her activities (work, hobbies, shipping, sport, social events), interests (food, fashion, family, recreation) and opinions (about themselves, social issues, business, products). It captures something more than the person’s social class or personality; it profiles a person’s whole pattern of acting and interacting in the world.

· Personality and Self-Concept

Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting response to one own environment. Personality usually describes in terms of traits such as self-confidence, dominance, sociability, autonomy, defensiveness, adaptability and aggressiveness. Personality can be useful in analysing consumer behaviour for certain product or brand choices. Many marketers use a concept related to personality-a person’s self-concept. The self-concept is that people’s possessions contribute to and reflect their identities; that is, “we are what we have.” Sequentially to understand consumer behaviour, the marketer must first understand the relationship between consumer self-concept and possessions.

.4. Psychological Factors

A person’s buying choices are influenced by four major psychological factors which are

· Motivation

A person has many needs at any given time. Some are biological, arising from states of tension such as hunger, thirst, discomfort. Others needs are psychogenic; rising from the need for recognition, esteem or belonging. A need becomes a motive when it is aroused to sufficient level of intensity. A motive is a need that is sufficiently pressing to drive the person to act.

Freud’s theory It assumed that the psychological forces shaping peoples behaviour are largely unconscious and that a person cannot fully understand his/her motivations. A technique called laddering can be use to trace a persons motivations from the stated instrumental ones to the more terminal ones. Then the marketer can decide at what level to develop the message and appeal.

Maslow’s theory It sought to explain why people are driven by particular needs at particular times. The theory is based on that

- there is a hierarchy of needs

- some needs are more basic than others

- the more basic needs must be satisfied first

- as level of needs is satisfied, a person moves on to the next level

Maslow hierarchy of needs are shown as below



Physiological needs are concerned with self preservation and these are the basic needs of life involving those elements required to sustain and advance the human race. Safety needs relate to protection against danger and deprivation. Once the more basic needs have been satisfied behaviour is influenced by the need for belonging, association and acceptance by others. The final need is what Maslow termed ‘self actualisation’ which means self-fulfilment in terms of becoming all that one is capable of being and one has reached the pinnacle of personal potential.

· Perception

Perception is the process by which physical sensations such as sights, sounds, touch, tastes, and smells are selected, organised, and interpreted. The eventual interpretation of a stimulus allows it to be assigned meaning. A perceptual map is a widely used marketing tool that evaluates the relative standing of competing brands along relevant dimensions. People are exposed to a great amount of stimuli every day and can form different perceptions of the same stimulus because of three perception processes selective attention, selective distortion, and selective retention.

· Attitudes and Beliefs

An attitude is a predisposition to evaluate an object or product positively or negatively. The attempts to change consumers’ attitudes and behaviours in ways that are beneficial to the society as a whole are referred to social marketing. Attitudes are made up of three components beliefs, affect, and behavioural intentions. Depending on the consumer’s level of involvement and the circumstances, though, attitudes can result from other hierarchies of effects as well. (Michael R. Solomon (00), Consumer Behavior � Buying, Having, and Being, 5th Edition, Prentice-Hall International Inc, USA)

· Learning

Learning is the process by which individuals acquire the purchase and consumption knowledge and experience they apply to future related behaviour. Although some learning is intentional, much learning is incidental. Basic elements that contribute to an understanding of learning are motivation, cues, response, and reinforcement. There are two schools of thought as to hoe individuals learn � behavioural theories and cognitive theories. Both contribute to an understanding of consumer behaviour. Behaviour theorists view learning as observable responses to stimuli, whereas cognitive theorist believe that learning is a function of mental processes. Three major behavioural learning theories are classical conditioning, instrumental conditioning, and observational learning. (Leon G. Schiffman / Leslie Lazar Kanuk (000), Consumer Behavior, 7th Edition, Prentice-Hall, USA)

. Marketing Strategy Planning

The process of developing and maintaining a strategic fit between the organisation’s goals and capabilities and its changing marketing opportunities. It involves defining a clear company mission, setting supporting objectives, designing a sound business portfolio, and coordinating functional strategies.

.1 Marketing Mix

It is the set of controllable tactical marketing tools � Product, Price, Place, and Promotion � that the firm blends to produce the response it wants in the target market.

For example, when Sony introduces a new product, they do not believe in product research before the launch. They believe that if the product is going to be a success, the customers will decide. When the MD was introduced, the target market was the ‘MTV Generation’. Due to the fact that the first and second launches was extremely unsuccessful, Sony, admitted that for the third launch, had done its research and the target market was people aged 18 to 4, who buy twelve or more CDs a year whom have a higher than average income.

· Product

The MiniDisc similar to a CD is half the size, magnetically encoded and enables 74 minutes of high quality music on one disc. It enables editing and erasing whole tracks or sectors of specific songs. The latest innovation, a network MiniDisc, can be connected to laptop and PC kits that enable users to download digital music files stored on their computers hard drive on to a MiniDisc.

· Promotion

With a major success in Japan, Sony knew they had a world-class product, but the launch in USA proves a failure due to high prices aimed at a young market, and the CD was still in the introductory stage of its product lifecycle. The MD was re-launched with the biggest music giveaway with extensive magazine advertising. Sony also gave away over a million MDs. Although sales had rose but still less than the sales in Japan, as people saw the MD as a replacement for the CD and not the cassette as intended. Sony was lack of support from the record companies. They did not support pre-recorded MDs due to lacking demand from consumers. At this point Sony believed the only reason for poor sales was due to poor marketing. Increased competition from companies meant that there was more support for the product that saw sales increase. Sony worked hard to convince the US market that there was a need for the MD. The main aim of the marketing from the beginning was to show people that the MD was a cool product, which was the way of the future and is a product that fits into our new digital age. With a redesigned logo, Sony has highlighted many similarities and differences between the MD Walkman and the original. Also the use of the Sony Walkman brand name has been used to suggest that the MD Walkman is an upgrade of the original for the future. With adverts such as ‘go create’ and ‘create the soundtrack to your life’ the MD is aimed at the fashion conscience, youth culture and to ‘cool’ people emphasising features such as portability, mobility, edit features and superior sound quality.

· Price

Whenever Sony re-launched the MD prices were cut realising that the price was limiting sales, and also aware that it would take sometime before MD would become affordable to the public. Sony used a price-skimming strategy charging the highest possible price for the MD which strategy worked in Japan. Due to the fact that in Japan CD prices are extremely high, it was more cost effective for the Japanese to buy a MD and to then hire and copy to MD. Demand increased allowing the price to fall due to economies of scale. In America conversely CD prices were low and therefore there was no demand for a high-quality recording device. Another theory is that the consumers have less disposable income as they tend to spend more on real estate and larger products for the home. MD price has clearly been reduced since the introduction making the MD more affordable to the target market. Today, cost of a blank MD is less than a high quality cassette.

· Place (Distribution)

Sony also has a number of independent dealers who deal only in Sony products. Products are distributed to these dealers through a central distribution warehouse who order the products when needed. MDs are widely available on the Internet too.

4. Conclusion

Consumer buyer behaviour is influenced by four keys set of buyer characteristics cultural, social, personal and psychological. Although many of these factors cannot be influenced by the marketer, they can be useful in identifying interested buyers and in shaping products and appeals to serve consumer needs better. Culture is the most basic determinant of a person’s wants and behaviour. It includes the basic values, perceptions, preferences and behaviour that a person learns from family and other important institutions. Subcultures are “cultures within cultures that have distinct values and lifestyles and can be based on anything from age to ethnicity. People with different cultural and sub-cultural characteristics has different product, and brand preferences. As a result, marketers may want to focus their marketing programs on the special needs of certain groups.

Social factors also influence a buyer’s behaviour. A person’s reference groups � family, friends, social organizations, professional associations � strongly affect product and brand choices. The buyer’s age, life-cycle stage, occupation, economic circumstances, lifestyle, personality and other personal characteristics influence his or her buying decisions. Consumer lifestyles � the whole pattern of acting and interacting in the world � are also an important influence on purchase decisions. Finally, consumer buying behaviour is influenced by four major psychological factors � motivation, perception, learning and belief and attitudes. Each of these factors provides a different perspective for understanding the workings of the buyer’s black box.

5. Bibliography

Ø Frances Brassington / Stephen Pettitt (000), Principles of Marketing, nd Edition, Pearson Education Limited, England

Ø Kotler & Armstrong (000), Marketing � An Introduction, 5th Edition, Prentice-Hall Inc, USA

Ø Neal / Quester / Hawkins (000), Consumer Behaviour � Implications for Marketing Strategy, nd Edition, McGraw-Hill, Australia

Ø Michael R. Solomon (00), Consumer Behavior � Buying, Having, and Being, 5th Edition, Prentice-Hall International Inc, USA

Ø Michael J. Baker (16), Marketing � An Introductory Text, 6th Edition, MacMillan Press Ltd, London

Ø Kotler & Armstrong (1), Principles of Marketing, th Edition, Prentice-Hall International Inc, USA

Ø Leon G. Schiffman / Leslie Lazar Kanuk (000), Consumer Behavior, 7th Edition, Prentice-Hall, USA

Journals

Ø Bonoma, T.V., ‘Major sales Who really does the buying?’ Harvard Business Review, 60, May-June, pp. 111-1, 18

Ø Lawson, R.W., ‘The family life cycle a demographic analysis’, Journal of Marketing Management, Vol 4, No. 1., 188

Ø Murphy, P.E. and Staples, W., ‘A modernisedfamily life cycle’, Journal of Consumer Reseach, June, 17

Ø Sheth, J.N. ‘A model of industrial buyer behaviour’, Journal of Marketing, Vol. 7, No. 4, pp. 50-6, 17

Ø Webster, F.E. and Wind, Y., ‘A general model of organisational buying behaviour’, Journal of marketing, 6, April, pp. 1-17, 17

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