MARKETING MANAGEMENT AND INTERNATIONAL TRADE

Lesson 6. CONSUMER BUYING BEHAVIOR

Module 2. Consumer behaviour and market intelligence

Lesson 6

CONSUMER BUYING BEHAVIOR

6.1 Introduction

Consumer behaviour is defined as a decision process and physical activity in which individual engage in when evaluating, acquiring, using or disposing of goods and services. Consumer behavior is seen to involve a mental decision process as well as physical activity. Consumer behavior is seen to involve a mental decision process as well as physical activity. The actual purchasing activity is one among a number of physical and mental activities. Some activities occur prior to actual purchase and some after the purchase. Consumer behavior is actually a subset of human behavior. Thus, the factors which affect the human behavior (individuals) in normal course of life also influence the behavior of consumers.

6.2 The Consumer Buying Process

Consumers actual purchase procedure consist of four major steps 1) Problem recognition 2) Information search and evaluation 3) Purchasing process 4) Post purchase behavior

A model consumer buying process is shown in the Fig. 6.1 below.

Fig. 6.1 Consumer buying process and factors affecting the same

6.2.1 Problem recognition

Problem recognition refers to a condition in which the consumer recognizes a difference of sufficient magnitude between what is perceived as actual and desired state of affairs. Consumers are faced with following decision questions while making a purchase. What to buy, how much to buy, where to buy, when to buy and how to buy. Consumer’s decision process differs in complexity based on type of purchase. For routine items of daily use, consumer does not undergo elaborate decision making process but for durable items of higher price, they do undergo elaborate decision making process. The consumer’s problem solving approaches are classified in to three types.

a) Routine problem solving (RPS)-While purchasing products of known brand, consumers being brand loyal, regularly purchase the products of the same brand.

b) Limited problem solving: when consumers purchase familiar products from a new brand, it generally requires moderate amount of time and information processing.

c) Extensive problem solving: When consumers make a purchase of unfamiliar product, it generally requires more information and longer time to arrive at decision. Consumer problem solving approaches at each stage of consumer buying process is shown in the table below.

Table 6.1 Type of consumer problem solving approach

Consumer buying stage	Routine problem solving	Limited problem solving	Extensive problem solving
Purchase involvement level	Minimum	Moderate	More
Problem recognition	Automatic	Semiautomatic	Complex
Information search and evaluation	Less	Limited	More
Purchase orientation	Habitual, brand loyal	Resistance to repurchase, brand switching if dissatisfied	If satisfied then loyal otherwise compliant on dissatisfaction

6.2.2 Information Search

After problem recognition and identification of need to purchase a product or service to satisfy it, consumer obtains information and evaluates it to make a right optimal decision. This information is classified as follows.

1) Pre purchase or ongoing based upon purpose of search

2) External or internal based upon its source

If the search is carried out to make a better purchase decision in present times, it is categorized as pre purchase information search. If the search is carried out to create a data bank for future use, it is called ongoing search.

After problem recognition consumer first of all try to retrieve the information stored in the mind. This is called internal search. Based upon internal search consumer may make a purchase decision or may feel that there is limited information, and then they go for external search. In internal search, information is obtained from sources like friends, sales person, advertisements, store displays etc. the available information is then evaluated by the consumer on certain criteria so as to arrive at purchase decision.

6.2.3 Purchasing process

Based upon evaluation of information, consumer actually makes a purchase of product or service.

6.2.4 Post-purchase behaviour

Consumer decision to purchase a particular product or service cannot be considered as a final step in the consumer buying behavior because on using the product or services, consumer have either a favourable or unfavourble experience based upon product/service characteristics and after sales service.

6.3 Determinants of Consumer Behaviour

6.3.1 External factors

Culture is defined as a complex whole which encompass knowledge, belief, art, morals, laws, customs, and any other capabilities acquired by human beings as a society member. In short culture is everything which is socially learned and shared by all the member of the society. Culture is composed of material and non material components. Word used by the people, their ideas, customs, beliefs and habits are all components of non material culture. All physical substances which are used by people such as automobiles are part of material component of culture. Although all consumers may be biologically same but their views of the world, what they value and how they act vary based upon their cultural backgrounds.

All segments of society do not exhibit same cultural patterns. Thus, it is essential to further divide heterogeneous society into smaller homogenous subgroups. These homogenous subgroups may be referred to as subculture. Sub culture has similar value, customs, traditions and other ways of behaving. Thus, within a broad national culture, it is possible to find out small subcultures of college students, folk music lovers, professional club members etc. There is no strict division of person in to a particular subculture only. There is always possibility of overlap and inclusion of one member into more than one culture. Thus, it is necessary that marketing organizations know who constitutes the most relevant subculture for their product or service. By understanding the characteristics and behavioral patterns of a specific segment, it is possible for marketing organization to refine their marketing mix to satisfy the target segment in a better way.

Although all human beings are created equal, it is seen that some people stand high in the society than others. This difference in status is referred to as social status or class. Social stratification is a term indicating that people in society are ranked by other society members into higher and lower social positions producing hierarchy of respect or prestige. A social class is defined as group of people enjoying almost equal position in society. There are various ways of categorizing various social classes. One of them is for example upper; lower upper, upper middle, middle class, working class, upper lower, lower class etc. The importance of social stratification for the marketing organization is that there exist differences in values, attitudes and behaviors of each of this social class. This difference helps to segment the market and get deep understanding of behavior of consumers.

A group consists of people who are related to each other due to interaction. Groups are classified according to function, degree of personal involvement and degree of organization.

The term family refers to a group of two or more persons related by blood, marriage or adoption residing together as household. Family passes through different lifecycle stages. The bachelor stage, newly married couple, young married couples with younger child less than six years, young married couples with youngest child above six years, older married couples with dependent children, older couples living alone, older single people etc. Each lifestyle has its own special needs. Marketers’ strategy is influenced at almost every turn by the nature of family role and decision making patterns.

Personal influence is dependent upon the process of communication. Personal influence is mostly considered same as word mouth publicity. The marketing organizations create a synthetic or simulated word of mouth programme by using celebrities in advertising campaigns. Consumer buying behavior is strongly affected by such word of mouth programmes.

Opinion leader are those persons, who in a given situation are able to exert personal influence. People look at them for advice and information. Opinion leaders can informally affect the behavior of others towards products in a positive or negative way.

All this external environmental factors have an influence on consumer buying behavior. Apart from this following individual factors also affect the process.

6.3.2 Individual factors

Personality and self concept are the two psychological aspects affecting consumer buying behavior. Many research studies have been undertaken to analyze their influence. Such research findings provide clue to the marketers. Instead of using personality attributes singly, they are combined with information on demographics, opinion, interest etc so as to measure consumer profile. Self concept (self image) deals with how individual perceive themselves and how do they exhibit themselves as consumers. Such a self perception has a strong impact as a buyer behavior. Individual perception of different products has relations with one’s self image. Preference for certain brands may develop as consumer perceives it as reflecting its own self image. Products of some other brands may be derived as consumer perceive it to be projecting an image which consumer aspires but do not have at present. Motives are inner states that mobilize and direct body energy to goal objects.

Motivations arouse and direct the behavior of consumers. The arousal component activates body energy to be used for mental and physical activity. Consumers are influenced by motives to develop and identify their basic aspects of safety, affiliation, achievements etc. They provide a guiding path in a general way across a wide variety of decisions and activities. Motives guide consumers in developing criteria for evaluating products. Motives affect the individual determinants of perception. Learning, personality attitude and how people process information.

Consumer act as problem solvers who use information to satisfy their consumption goals. Consumers information processing is a process of acquisition of stimulus inputs, the manipulation of these inputs to arrive at some meaning and use of this information to think about products or services.

Consumer’s learning is important component of their behavior. Consumers learning occur both intentionally and unintentionally. Learning is a relatively permanent change in consumers behavior from consumers basic likes and dislikes to typical methods of shopping.

Consumer buying behavior is also influenced by one’s attitudes. There are many definitions of attitudes. One definition indicates that attitude is how positive or negative, favourable or unfavorable, pro or con a individual feel towards an object. This definition sees attitude of consumer as a feeling or an evaluative reaction to objects (products or services).