‭Consumer Behaviour‬

‭ esearch on consumer behavior examines how individuals, groups, and organizations choose,‬
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‭purchase, use, and discard goods, services, ideas, or experiences to meet their needs and‬
‭desires. Marketers need to fully grasp consumer behavior theory and reality to deliver customer‬
‭value.‬

‭ he offering and market context are shaped by consumer culture, social factors, and personal‬
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‭perspectives, along with consumer motivation, perception, emotions, and memory.‬

‭CONSUMER CHARACTERISTICS‬

‭CULTURAL FACTORS‬

‭ culture is a way of life among a group of people—the behaviors, beliefs, values, and symbols‬
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‭that they accept, generally without thinking about them, and that are passed along by‬
‭communication and imitation from one generation to the next. Culture, subculture, and social‬
‭class are particularly important influences on consumer buying behavior. Culture is a‬
‭fundamental determinant of a person’s wants and behavior.‬

‭ ultures can differ on a variety of dimensions‬

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‭-extent to which people prioritize close (vs. distant)‬
‭-whether they behave as if they are part of a collective (i.e., collectivistic cultures)‬
‭-see themselves as independent agents who value their autonomy (i.e., individualistic cultures)‬
‭SOCIAL FACTORS‬

‭ eference groups‬‭are the groups that directly or indirectly influence a person's beliefs,‬
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‭decisions, and behavior. Family members, especially parents and siblings, have a major‬
‭influence on an individual's beliefs, values, and behavior.‬

‭An opinion leader‬‭, or an influencer, is a person who‬‭offers informal advice or information about a‬
‭ pecific product or product category, such as which of several brands is best or how a particular‬
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‭product may be used.‬

‭Family.‬‭The family, as the most influential primary‬‭reference group,16 is the most important‬
‭ onsumer buying organization in society. There are two families in the buyer’s life. The family of‬
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‭orientation consists of parents and siblings.‬

‭PERSONAL FACTORS‬

‭ ersonal characteristics that influence buyers’ decisions include age, stage in the life cycle,‬
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‭occupation, economic circumstances, personality, self-concept, lifestyle, and values. Marketers‬
‭need to closely follow these factors as they directly impact consumer behavior.‬

‭ ur preferences for food, clothes, furniture, and activities ar‬‭e‬‭often influenced by our age, family‬
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‭life cycle, and psychological life-cycle stages. Adults adapt their behavior during different life‬
‭stages and transitions.‬

‭ ccupation‬‭influences consumption patterns. Marketers identify occupational groups with‬

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‭above-average interest in their products and tailor offerings for them. For example, computer‬
‭software companies design specific products for brand managers, engineers, lawyers, and‬
‭physicians.‬

‭ roduct and brand choices are influenced by‬‭economic factors‬‭such as income, savings,‬
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‭assets, debts, borrowing power, and attitudes towards spending and saving.‬

‭ ersonality and Self-Concept‬‭.- Consumers usually choose brands with a personality that‬
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‭matches their actual self-concept, ideal self-concept, or how they think others perceive them.‬

‭CONSUMER PSYCHOLOGY‬

‭ hen marketing and environmental stimuli enter the consumer’s consciousness, a set of‬
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‭psychological processes combine with certain consumer characteristics to result in decision‬
‭processes and purchase decisions.‬

‭ our key psychological processes—‬

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‭Motivation,‬
‭ erception,‬
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‭Learning,‬
‭memory—fundamentally influence consumer responses.‬

‭CONSUMER MOTIVATION -‬‭Understanding consumer motivation‬‭begins with understanding the needs‬

‭Cunsumer Needs: people prioritize satisfying their most important needs first and then move on‬
t‭o the next ones.‬

-‭ Needs become wants when directed to specific objects that might satisfy the need.‬
‭-Marketers do not create needs: Needs pre-exist marketers. Marketers might promote the idea‬
‭that a Samsung satisfies a person’s need for social status.‬

‭ efinition of Consumer Motivation‬‭- We all have needs that become motivations when they‬
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‭drive us to act. Motivation involves selecting a goal and pursuing it with vigor.‬
‭ ERCEPTION‬‭- is the process by which we select, organize, and interpret information inputs to‬
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‭create a meaningful picture of the world.‬

‭ eople emerge with different perceptions of the same object because of three perceptual‬
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‭processes:‬
‭ elective attention,‬
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‭selective distortion, and‬
‭selective retention.‬

‭ elective Attention.-‬‭It’s estimated that the average person may be exposed to thousands of ads or‬
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‭brand communications every day. Because we cannot possibly attend to all these, we screen out most‬
‭stimuli, a process called selective attention.‬

‭ x- People are more likely to notice stimuli that relate to a current need. A person who is motivated to buy‬
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‭a smartphone will notice smartphone ads and be less likely to notice non-phone-related ads.‬

‭Selective distortion -‬‭is the tendency to interpret information to fit our preconceptions. Consumers will‬
‭often distort information to make it consistent with prior brand and product beliefs and expectations.‬

‭Selective retention‬‭-‬‭Even after distorting the message, people can only recall about five percent of the‬
‭ riginal verbal message. Recall increases with more visual stimulus and is highest with audio-visual‬
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‭messages.‬

‭ MOTIONS -‬‭Emotions are spontaneous mental states reflecting positive or negative reactions‬
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‭to stimuli.‬

‭ n emotion-filled brand story can encourage people to share information about brands through‬
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‭word of mouth or online. Companies are making their communications more human to connect‬
‭with consumers through their brand stories.‬

‭ ust as products and brands can evoke emotions, different emotional states can influence‬
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‭people’s judgments and decisions. For example, fear can impact the effectiveness of marketing‬
‭strategies involving social proof and scarcity.‬

‭MEMORY-‬

‭ emory Models - Cognitive psychologists distinguish between‬‭short-term memor‬‭y—a‬

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‭temporary and limited repository of information—and‬
‭long-term memory‬‭—a more permanent, potentially unlimited‬‭repository.‬

t‭hree types of long-term memory:‬

‭episodic,‬
‭semantic, and‬
‭Procedural.‬
‭ pisodic memory is responsible for storing information about events (i.e., episodes) that we‬
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‭have experienced in our lives.‬

‭ emantic memory is responsible for storing information about the world, such as facts,‬
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‭meanings, and concepts.‬

‭ rocedural memory is responsible for knowing how to perform certain procedures such as‬
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‭walking, talking, and riding a bike.‬

‭ emory Processes‬‭.Memory is a process of construction. People don't remember information‬

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‭completely and accurately. We remember bits and pieces and fill in the rest based on what we‬
‭know. Memory involves encoding and retrieval.‬

‭Memory retrieval‬‭is the way we reclaim information from memory.‬

‭THE BUYING DECISION PROCESS‬

‭ mart companies try to fully understand a customer’s buying decision‬

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‭process, which involves all the experiences in learning, choosing, using, and‬
‭even disposing of a product. Marketing scholars have developed a “stage‬
‭model” of this decision process, in which the consumer‬
‭typically passes through five stages: problem recognition, information search,‬
‭evaluation of alternatives, purchase decision, and postpurchase behavior.‬

‭ he firm needs to understand the buyer and adapt its marketing strategy accordingly.‬
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‭However, the buyer's behavior can be unpredictable, and their decision-making process‬
‭is often seen as a black box. Marketers provide stimuli, but the buyer's response is‬
‭uncertain. These stimuli include product, brand name, color, style, packaging, services,‬
‭merchandising, display, advertising, distribution, and publicity.‬

‭ ROBLEM RECOGNITION - Consumers recognize a need based on natural depletion,‬

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‭dissatisfaction with current offerings, lifestyle and goal changes, and social influences.‬
I‭NFORMATION SEARCH‬‭- Consumers often search for limited information when‬
‭shopping for durable goods. Half of all consumers look at just one store, and only 30‬
‭percent consider more than one brand of appliances. There are two levels of‬
‭engagement in the search: heightened attention and active information search.‬

‭Information Sources.-‬ ‭Consumers turn to four major information sources: personal‬

(‭ family, friends, neighbors), commercial (advertising, websites, emails, salespersons,‬
‭packaging, displays), public (mass media, social media, consumer-rating organizations),‬
‭and experiential (handling, examining, using the product).‬

‭Search Dynamics.‬‭- The consumer gathers information about competing brands and‬
t‭heir features. Initially, they become aware of a subset of available brands. From this‬
‭subset, only some brands meet their initial buying criteria, forming the consideration set.‬
‭As the consumer gathers more information, only a few options, the choice set, remain‬
‭as strong contenders, and the final choice is made from these.‬

‭ arketers need to identify the hierarchy of attributes that guide consumer decision‬
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‭making in order to understand different competitive forces and how various decision‬
‭sets are formed. The process of identifying this attribute hierarchy is called‬‭market‬
‭partitioning.‬

‭ earch behavior can vary online based on how product information is presented, such‬
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‭as displaying product alternatives in order of predicted attractiveness. This can‬
‭influence consumers' search behavior.‬
‭ amsung's collaborative filtering algorithm analyzes customer purchases and online‬
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‭behavior to provide personalized product recommendations. These recommendations‬
‭appear in various places on Amazon and are responsible for over a third of consumer‬
‭purchases on the platform.‬

‭EVALUATION OF ALTERNATIVES‬

‭ he way consumers decipher the pros and cons of available options is affected‬
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‭by the beliefs and attitudes they hold, whether these are valid or erroneous.‬
‭These perceptions and the differing ways in which consumers process‬
‭information weigh heavily in the purchase decision.‬

‭ eliefs and Attitudes-‬‭Attitudes frame our liking or disliking of things and guide our behavior. They are‬
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‭hard to change, so it's best for a company to align its product with existing attitudes. However, if attitudes‬
‭become too negative, the company may need to take more active steps.‬

‭Information Processing‬‭- The consumer forms judgments largely on a conscious and rational basis.‬

-‭ First, the consumer is trying to satisfy a need.‬

‭-Second, the consumer is looking for certain benefits from the product offering a solution for that need.‬
‭-Third, the consumer sees each product as a bundle of attributes with varying abilities to deliver the‬
‭benefits desired.‬

‭ xpectancy-Value Model -‬‭The consumer forms attitudes towards‬‭brands by evaluating their attributes‬
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‭and combining positive and negative brand beliefs based on importance.‬

‭PURCHASE DECISION‬‭-‬‭In the evaluation stage, the consumer forms preferences among the brands‬
i‭n the choice set and may also form an intention to buy the most preferred brand. In executing a purchase‬
‭intention, the consumer may make as many as five purchase decisions: brand (Brand A), distribution‬
‭channel (Retailer X), quantity (one phone), timing (weekend), and payment method (credit card).‬

‭ ecision Heuristics‬‭- Consumers often use mental shortcuts, called heuristics, when making decisions,‬
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‭especially when short on time or cognitive resources. Factors like brand knowledge, number of choices,‬
‭time pressure, and social context influence the use of choice heuristics. Consumers may use different‬
‭decision rules, such as non-compensatory ones.‬

‭ he Level of Consumer Involvement‬‭- Richard Petty and John Cacioppo’s elaboration likelihood model,‬
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‭an influential model of attitude formation and change, describes how consumers make evaluations in both‬
‭low- and high-involvement circumstances.‬

‭ he two means of persuasion are the central route, which involves thoughtful consideration of important‬
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‭product information, and the peripheral route, which involves less thought and is influenced by peripheral‬
‭cues like celebrity endorsements or emotional responses.‬
I‭ntervening Factors‬‭- Even if consumers form an evaluation, two general factors can intervene‬
‭between the purchase intention and the purchase decision‬

-‭ The first intervening factor is the attitudes of others.‬

‭-The second intervening factor involves the situational considerations that may erupt to change‬
‭the purchase intention.‬

‭ consumer’s decision to modify, postpone, or avoid a purchase decision is heavily influenced‬

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‭by different types of perceived risk, including functional, physical, financial, social, psychological,‬
‭and opportunity risks.‬

‭Circular Decision Making -‬

‭ he circular decision-making process is complex as consumer behaviour differs across product‬

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‭categories. It reinforces the need for an integrated marketing approach with a systematic and‬
‭scientific blend of marketing activities across multiple touch points to reach the prospects and‬
‭customers.‬
‭POSTPURCHASE BEHAVIOR -‬

‭ fter making a purchase, consumers may experience dissonance due to noticing certain‬
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‭unsettling features or hearing positive things about other brands. Post-purchase satisfaction,‬
‭actions, product uses, and disposal should be monitored.‬

‭ atisfaction depends on the closeness between consumer expectations and the product's‬
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‭perceived performance. It influences post-purchase actions, with satisfied consumers more‬
‭likely to repurchase and speak positively about the brand.‬

‭Financial Decisions -‬

‭ hen making financial decisions, consumers use a specific form of framing called mental‬
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‭accounting.‬
‭Mental accounting is based on a set of core principles:‬

-‭ Consumers tend to segregate gains.‬

‭-Consumers tend to integrate losses.‬
‭-Consumers tend to integrate smaller losses with larger gains.‬
‭-Consumers tend to segregate small gains from large losses.‬