CHAPTER 3

Theoretical Background.

What is Consumer Behaviour?

How many times throughout the day do people make product decisions? If you stop to think
about it, many product decisions are made every day, some without much thought. What
should I wear? What should I eat? What am I going to do today? Many product decisions are
answered routinely every day and they help move the economy of cities, countries and
ultimately the world.

Provide value and customer satisfaction.

Effectively target customers.

Enhance the value of the company.

Improve products and services.

Create a competitive advantage

Understand how customers view their products versus their competitors products.

Expand the knowledge base in the field of marketing,

Apply marketing strategies toward a positive effect on society (encourage people to

support charities, promote healthy habits, reduce drug use etc.)

Product decisions also shape life for the consumer. How can simple decisions be so
important? Why do marketers spend millions of dollars to uncover the reasons behind these
decisions?

To define consumer behaviour: it is the study of consumers and the processes they use to
choose, use (consume), and dispose of products and services. A more in depth definition will
also include how that process impacts the world. Consumer behaviour incorporates ideas
from several sciences including psychology, biology, chemistry and economics.

"All marketing decisions are based on assumptions and knowledge of consumer behaviour,"
(Hawkins and Mothers Baugh, 2007). Researching consumer behaviour is a complex process,
but understanding consumer behaviour is critical to marketers-they can use it to.

Consumer Buying Behavior

Consumer buying behavior is the sum total of a consumer's attitudes, preferences,

intentions, and decisions regarding the consumer's behavior in the marketplace when
purchasing a product or service. The study of consumer behavior draws upon social science
disciplines of anthropology, psychology, sociology, and economics.
Standard Behavioral Model
The standard model of consumer behavior consists of a methodical and structured process.
Let's take a brief look at each step.
Problem recognition - The first step is problem recognition. During this step, the consumer
realizes that she has an unfulfilled need or want. Let's use the example of a consumer who
has just been informed by her mechanic that fixing her car will cost more than it's worth. Our
consumer realizes that she now has a transportation problem and wants to fulfill that need
with the purchase of a car.
Information search - The next step is to gather information relevant to what you need to
solve the problem. In our example, our consumer may engage in research on the Internet to
determine the types of vehicles available and their respective features.
Evaluation - After information is gathered, it is evaluated against a consumer's needs, wants,
preferences, and financial resources available for purchase. In our example, our consumer has
decided to narrow her choices down to three cars based upon price, comfort, and fuel
efficiency.
Purchase - At this stage, the consumer will make a purchasing decision. The ultimate
decision may be based on factors such as price or availability. For example, our consumer has
decided to purchase a particular model of car because its price was the best she could
negotiate and the car was available immediately.
Post-purchase evaluation - At this stage, the consumer will decide whether the purchase
actually satisfies her needs and wants. Is our car purchaser happy with her purchase? If she is
not satisfied, why isn't she?

Factors Influencing Consumer Buying Behaviour

Introduction
Consumer behaviour is affected by many uncontrollable factors. Just think, what influences
you before you buy a product or service? Your friends, your upbringing, your culture, the
media, a role model or influences from certain groups?
Culture
Culture is one factor that influences behaviour. Simply culture is defined as our attitudes and
beliefs. But how are these attitudes and beliefs developed? As an individual growing up, a

child is influenced by their parents, brothers, sister and other family member who may teach
them what is wrong or right. They learn about their religion and culture, which helps them
develop these opinions, attitudes and beliefs. These factors will influence their purchase
behaviour however other factors like groups of friends, or people they look up to may
influence their choices of purchasing a particular product or service. Reference groups are
particular groups of people some people may look up towards to that have an impact on
consumer behaviour. So they can be a singer like the Lady Gaga or your immediate family
members. Opinion leaders are those people that you look up to because your respect their
views and judgments and these views may influence consumer decisions. So it maybe a
friend who works with the IT trade who may influence your decision on what computer to
buy. The economic environment also has an impact on consumer behaviour; do consumers
have a secure job and a regular income to spend on goods? Marketing and advertising
obviously influence consumers in trying to evoke them to purchase a particular product or
service.
Social Status
People's social status will also impact their behaviour. What is their role within society? Are
they Actors? Doctors? Office worker? and mothers and fathers also? Clearly being parents
affects your buying habits depending on the age of the children, the type of job may mean
you need to purchase formal clothes, the income which is earned has an impact. The lifestyle
of someone who earns 250000rs would clearly be different from someone who earns 25000rs.
Also characters have an influence on buying decision. Whether the person is extrovert
(outgoing and spends on entertainment) or introvert (keeps to themselves and purchases via
online or mail order) again has an impact on the types of purchases made.

Maslows Hierarchy of Needs

Abraham Maslow's Hierarchy of Needs theory explores the factors behind human
achievement and sets out the answer in the form of a hierarchy. Maslow suggests individuals
first need to satisfy basic physiological needs such as shelter hunger and thirst. When these
have been met, they move up to the next stage of the hierarchy; safety needs, where the
priority is things like job security and knowing that you have a regular income. Safety is
followed by social needs such as love and belonging. Things that influence self-esteem are
next in the hierarchy; status, recognition, job title and even wearing branded clothing make
up self-esteem needs as they imply a certain status. The last stage is self-actualisation or the
point where an individual believes they have met their potential and all of their needs have
been met. But how does Maslow's concept help an organisation trying to market a product or
service?

Well as we have established earlier within this website, marketing is about meeting needs and
providing benefits, so the task involves marketing products that meet the needs of your target
market. For example, supermarkets sell value brands to meet the physiological needs of

hunger and thirst whilst luxury retailer Harrods develops products and services for those who
have met their esteem needs and are at the top of Maslow's Hierarchy of Needs Model.

Types of Buying Behaviour.

There are four types of buying behaviour.

1. Complex buying behaviour is where the individual purchases a high value brand and
seeks a lot of information before the purchase is made.
2. Habitual buying behaviour is where the individual buys a product out of habit e.g. a
daily newspaper, sugar or salt.
3. Variety seeking buying behaviour is where the individual likes to shop around and
experiment with different products. So an individual may shop around for different
breakfast cereals because he/she wants variety in the mornings!
4. Dissonance reducing buying behaviour is when buyers are highly involved with the
purchase of the product, because the purchase is expensive or infrequent. There is
little difference between existing brands an example would be buying a diamond ring,
as people believe there is little difference between diamond brand manufacturers.

Summary

There are five stages in the consumer purchase process

Problem/Need Recognition

Information search

Evaluation of purchases

Purchase decision

Post purchase behaviour

Culture and social status has a big impact on consumer purchasing behaviour and product
development should take these into account. Marketers should also be aware of Maslow's
Hierarchy of needs theory during product selection, market segmentation, and marketing
campaign planning