Unit 5: Consumer Behaviour - Subjective Questions

Consumer behaviour refers to the study of how individuals, groups, or organizations select, purchase, use, evaluate, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants.

Scope of consumer behaviour:

• Studies the buying process, including need recognition, information search, evaluation, purchase, and post-purchase behaviour.
• Examines the influence of cultural, social, personal, and psychological factors.
• Covers both individual and organizational consumers.
• Explains how consumers use and evaluate products after purchase.
• Helps marketers understand changing preferences, lifestyles, and consumption patterns.
• Supports decisions related to product design, pricing, promotion, distribution, and market segmentation.

Buyer behaviour is the process through which a buyer identifies a need, searches for alternatives, evaluates available choices, makes a purchase, and assesses the result.

The major influencing factors are:

• Cultural factors: Culture, subculture, social class, traditions, and values influence preferences and consumption patterns.
• Social factors: Family, reference groups, social roles, and status affect buying decisions.
• Personal factors: Age, occupation, income, lifestyle, personality, and stage of life influence product selection.
• Psychological factors: Motivation, perception, learning, beliefs, and attitudes shape how buyers respond to marketing stimuli.
• Situational factors: Time pressure, physical surroundings, purchase occasion, and the availability of money may change behaviour.
• Marketing factors: Product features, price, advertising, sales promotion, packaging, and distribution also affect the final decision.

A consumer buying decision may involve several individuals performing different roles:

• Initiator: The person who first suggests buying a product or service. For example, a child may suggest purchasing a new television.
• Influencer: The person whose advice, opinion, or expertise affects the decision. A friend may recommend a particular smartphone brand.
• Decider: The person who makes the final decision regarding what to buy, where to buy, or how much to spend.
• Buyer: The person who actually places the order and completes the transaction.
• User: The person who consumes or uses the product. In a family purchase, the buyer and user may be different.
• Gatekeeper: The person who controls the flow of information to other decision-makers, such as a receptionist controlling access to a purchasing manager.

Understanding these roles helps marketers target the appropriate person with relevant communication.

The study of buyer behaviour is important because it enables marketers to understand the reasons behind consumer decisions.

Significance:

• Helps identify consumer needs and wants accurately.
• Supports the development of products that provide greater customer value.
• Assists in dividing the market into meaningful market segments.
• Helps marketers select suitable target markets and positioning strategies.
• Improves decisions related to product features, branding, pricing, packaging, and distribution.
• Enables effective advertising by identifying suitable appeals, media, and messages.
• Helps predict changes in consumer preferences and market demand.
• Reduces the risk of product failure by testing consumer expectations.
• Supports customer satisfaction, loyalty, and long-term relationships.
• Helps organizations understand competitors by studying how customers compare alternatives.

A buying motive is the reason or internal force that encourages a consumer to purchase a particular product or service.

Important buying motives include:

• Physiological motives: The desire to satisfy basic needs such as food, clothing, shelter, and rest.
• Safety motives: The desire for protection, security, health, insurance, and financial stability.
• Social motives: The desire for friendship, belongingness, affection, and acceptance.
• Esteem motives: The desire for status, recognition, prestige, and respect from others.
• Self-development motives: The desire for achievement, knowledge, creativity, and personal growth.
• Economic motives: The desire to save money, obtain value, earn income, or maximize utility.
• Emotional motives: Feelings such as pride, fear, love, comfort, or pleasure.
• Rational motives: Logical considerations such as quality, durability, price, reliability, and performance.

Maslow's hierarchy of needs explains human motivation through five levels of needs, generally arranged from basic to higher-order needs:

1. Physiological needs: Basic requirements such as food, water, clothing, and shelter.
2. Safety needs: Protection from physical and financial risks, including insurance and secure housing.
3. Social needs: Friendship, family relationships, belongingness, and affection.
4. Esteem needs: Status, achievement, recognition, and prestige.
5. Self-actualization needs: Personal growth, creativity, fulfillment, and realization of potential.

Relevance to consumer behaviour:

• Consumers often purchase products to satisfy one or more of these needs.
• A food advertisement may appeal to physiological needs, while an insurance advertisement may appeal to safety needs.
• Luxury cars, designer clothing, and premium brands may appeal to esteem needs.
• Educational courses, travel, and creative products may appeal to self-actualization.
• The hierarchy helps marketers design appropriate product benefits and promotional appeals.

However, consumers may pursue several needs simultaneously, and the order may vary across individuals and cultures.

The consumer buying decision process consists of the following stages:

1. Need recognition: The consumer identifies a difference between the current state and the desired state. The need may be triggered by internal factors or external stimuli.
2. Information search: The consumer collects information from personal experience, family, friends, advertisements, websites, salespeople, and online reviews.
3. Evaluation of alternatives: Available brands are compared on criteria such as price, quality, features, design, convenience, and warranty.
4. Purchase decision: The consumer selects a product, brand, seller, quantity, timing, and method of payment.
5. Post-purchase behaviour: The consumer evaluates whether the product met expectations. Satisfaction may lead to repeat purchases, while dissatisfaction may lead to complaints or brand switching.

The process may be lengthy for expensive and risky purchases but brief for routine, low-cost products.

Need recognition occurs when a consumer realizes a gap between the existing condition and a desired condition. This gap creates a problem that the consumer seeks to solve.

Need recognition may arise from:

• Internal stimuli: Hunger, thirst, fatigue, discomfort, or a desire for improvement.
• External stimuli: Advertising, social media, product displays, recommendations, new technology, or observing another person.

Marketers can respond by:

• Identifying important problems faced by target customers.
• Designing products that provide relevant solutions and benefits.
• Using advertising to highlight a problem and present the product as a solution.
• Offering demonstrations, trials, samples, or consultations.
• Communicating changes in lifestyle, technology, or social expectations.
• Ensuring product availability when consumers are ready to purchase.

Ethical marketing should create awareness of genuine needs rather than manipulate consumers into unnecessary purchases.

Information search is the stage in which a consumer gathers knowledge about products, brands, prices, and sellers before making a decision.

Sources of information:

• Personal sources: Family, friends, colleagues, and reference groups.
• Commercial sources: Advertisements, salespeople, websites, packaging, catalogues, and retailer displays.
• Public sources: Reviews, consumer organizations, news reports, and comparison platforms.
• Experiential sources: Product trials, demonstrations, sampling, and personal use.

Importance:

• Reduces perceived financial, functional, and social risk.
• Helps consumers compare competing alternatives.
• Improves confidence in the purchase decision.
• Increases awareness of new products and brands.
• Allows marketers to understand which information sources influence customers.
• Helps firms provide accurate product information and address consumer concerns.

During the evaluation stage, consumers compare brands or products that can satisfy the recognized need.

The evaluation process generally involves:

• Establishing choice criteria, such as price, quality, durability, design, performance, safety, and convenience.
• Assigning different levels of importance to each criterion.
• Comparing the perceived performance of competing brands.
• Considering personal preferences, budget, risk, and brand reputation.
• Forming a preference or intention to purchase.

Consumers may use a compensatory approach, in which strength on one attribute compensates for weakness on another. For example, a higher price may be accepted because of superior quality. They may also use a non-compensatory approach, rejecting a product that fails to meet an essential requirement.

Marketers should communicate clear benefits, provide comparisons, reduce perceived risk, and make the brand accessible at the point of purchase.

Post-purchase behaviour refers to the consumer's feelings, evaluation, and actions after buying and using a product.

• Satisfaction: It occurs when perceived performance meets or exceeds expectations. Satisfied consumers are more likely to repurchase and recommend the brand.
• Dissatisfaction: It occurs when perceived performance is below expectations. It may result in complaints, returns, negative reviews, or brand switching.
• Cognitive dissonance: It is the mental discomfort experienced when a consumer doubts whether the selected product was the best alternative, especially after an expensive or important purchase.

Marketers can improve post-purchase reactions by:

• Setting realistic expectations.
• Providing reliable product performance.
• Offering installation, training, warranties, and after-sales service.
• Requesting feedback and resolving complaints quickly.
• Sending reassurance and usage information after purchase.

Effective post-purchase support strengthens loyalty and reduces negative word-of-mouth.

Consumer buying decisions are influenced by several groups of factors:

• Cultural influences: Culture provides values, beliefs, customs, and norms that shape consumption. Subcultures and social classes may create different preferences.
• Social influences: Family members, friends, reference groups, opinion leaders, and social roles affect brand choices and purchase behaviour.
• Personal influences: Age, occupation, income, lifestyle, personality, self-concept, and family life cycle influence what consumers buy.
• Psychological influences: Motivation creates the desire to act; perception determines how information is interpreted; learning changes future behaviour; and beliefs and attitudes influence brand evaluation.
• Situational influences: The purchase occasion, urgency, physical environment, time available, and current mood can modify the decision.

Marketers study these influences to create accurate segments and develop suitable positioning and communication strategies.

Consumer buying behaviour varies according to the level of involvement and the perceived differences among brands.

Marketing implications:

• Habitual purchases require reminders, availability, and sales promotions.
• Variety-seeking purchases require attractive packaging, new features, and frequent innovation.
• Dissonance-reducing purchases require reassurance, warranties, and strong after-sales service.
• Complex purchases require detailed information, demonstrations, expert advice, and comparative communication.

Consumer buying behaviour concerns individuals or households purchasing products for personal use, whereas business buying behaviour concerns organizations purchasing goods or services for organizational purposes.

Business or industrial buying behaviour has several distinctive characteristics:

• Derived demand: Demand for industrial goods depends on demand for the final consumer product.
• Fewer but larger buyers: Industrial markets usually contain fewer buyers, but each buyer may place a large order.
• Professional purchasing: Purchases are often handled by trained buyers, engineers, finance officers, and managers.
• Multiple decision-makers: The buying decision is made by a buying centre rather than by one individual.
• Technical evaluation: Specifications, quality standards, performance, compatibility, and safety are carefully assessed.
• Formal procedures: Organizations may use quotations, tenders, purchase orders, contracts, and approval systems.
• Long-term relationships: Reliable suppliers and service providers are often preferred for repeated transactions.
• Negotiation and reciprocal dealings: Price, delivery schedules, credit terms, customization, and service are commonly negotiated.
• Greater emphasis on service: Installation, maintenance, training, and technical support are important parts of the total offering.

An industrial buying centre consists of all individuals and groups who participate in or influence an organizational purchase.

• Initiators: Recognize a need and begin the purchasing process.
• Users: Use the purchased product or service and often provide technical requirements.
• Influencers: Supply expertise, establish specifications, or evaluate alternatives.
• Buyers: Have formal authority to select suppliers, negotiate terms, and place orders.
• Deciders: Possess authority to approve the final supplier or purchase option.
• Gatekeepers: Control information and access to other members, such as purchasing assistants or technical coordinators.

The composition of the buying centre depends on the product's complexity, cost, risk, and strategic importance. Marketers should identify each participant and provide information relevant to that person's role.

The industrial buying process is a systematic procedure used by organizations to purchase products or services.

1. Problem recognition: The organization identifies a need, deficiency, or opportunity for improvement.
2. General need description: The organization defines the broad quantity and characteristics required.
3. Product specification: Technical specifications, quality standards, materials, performance, and compatibility are established.
4. Supplier search: Potential suppliers are identified through directories, trade exhibitions, referrals, websites, and previous relationships.
5. Proposal solicitation: Qualified suppliers are invited to submit quotations, tenders, or detailed proposals.
6. Supplier selection: Proposals are evaluated using criteria such as price, quality, delivery, capacity, reputation, service, and financial stability.
7. Order-routine specification: The organization finalizes quantities, delivery schedules, payment terms, warranties, and other conditions.
8. Performance review: The buyer evaluates supplier performance and decides whether to continue, modify, or terminate the relationship.

The process may be shortened for routine purchases and expanded for new-task buying situations.

Industrial buying situations can be classified as follows:

• New-task buying: The organization purchases a product or service for the first time. It involves high uncertainty, extensive information search, detailed specifications, and participation by many decision-makers.
• Modified rebuy: The organization has purchased the product before but wants to change specifications, suppliers, price, delivery terms, or service conditions. Some evaluation and negotiation are required.
• Straight rebuy: The organization routinely reorders a product from an existing supplier without significant changes. The process is generally quick and handled through established procedures.

Marketing implications:

• New-task buying requires education, technical consultation, demonstrations, and risk reduction.
• Modified rebuy creates opportunities for competing suppliers to offer improvements or better terms.
• Straight rebuy depends heavily on reliability, consistent quality, competitive pricing, and strong relationships.

Psychological processes strongly influence how consumers respond to marketing information.

• Perception: It is the process through which consumers select, organize, and interpret information. The same advertisement may be interpreted differently by different people.
• Learning: It refers to changes in behaviour resulting from experience, information, or repeated exposure. A positive product experience may encourage repeat purchase.
• Beliefs: These are descriptive thoughts that consumers hold about a product or brand, such as beliefs about quality, safety, or reliability.
• Attitudes: These are relatively consistent evaluations, feelings, and tendencies toward an object or brand. Attitudes may be favourable, unfavourable, or neutral.

Marketers can influence these processes through clear messages, consistent branding, product demonstrations, customer experiences, testimonials, and corrective information. Changing an established attitude may require substantial evidence and repeated communication.

Consumer involvement is the level of personal importance, interest, or perceived risk associated with a purchase.

• High-involvement purchases: Products such as cars, houses, education, and insurance involve significant financial, social, or functional risk. Consumers usually conduct extensive information searches, compare alternatives carefully, consult others, and experience a longer decision process.
• Low-involvement purchases: Products such as stationery, snacks, or everyday household items usually involve limited risk and little information search. Decisions may be based on habit, convenience, price, or availability.

Involvement is influenced by:

• Price and financial risk.
• Product complexity.
• Social visibility.
• Personal interest.
• Perceived differences among brands.
• Frequency of purchase.

Marketers should provide detailed information for high-involvement products and use simple reminders, attractive displays, and easy availability for low-involvement products.