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Topic Covered: What is consumer behaviour, meaning, definition, classification/types, stages in consumer buying process, importance, 7 o’s framework, factors influencing consumer behaviour.
Table of Contents
- 1 What is Consumer Behaviour?
- 2 Consumer Behaviour Definition
- 3 Consumer Behaviour Meaning
- 4 Types of Buying Decision Behavior
- 5 Consumer Buying Process
- 6 7 O’s Framework of Consumer Behaviour
- 7 Factors Influencing Consumer Behaviour
- 8 Importance of Consumer Behaviour
“Consumption is the sole end and purpose of all production”, – Adam Smith had once commented.
A consumer’s choice evolves with external factors like economic, political, cultural and social from time to time. This is because consumer’s need evolution is a dynamic process and what a consumer states as a need or want may not guide him to make the expected purchase decision.
What is Consumer Behaviour?
Consumer behaviour refers to the actions of consumers in the market place and the underlying motives for those actions.
Marketers expect that by understanding what causes consumers to buy particular goods and services they will be able to determine which products are needed in the market place, which is obsolete, and how best to present the goods to the consumers.
Consumer Behaviour Definition
Consumer behavior is the process whereby individuals decide what, when, where, how and from whom to purchase goods and services.Walters and Paul
Consumer behaviour as “The dynamic interaction of cognition, behaviour and environmental events by which human beings conduct the exchange aspect of their lives.American Marketing Association (AMA)
Consumer behaviour refers to the actions and decision processes of people who purchase goods and services for personal consumption.Peter D. Bennett, ed. Dictionary of Marketing Terms, 2nd ed. 1995
Consumer behaviour refers to “the mental and emotional processes and the observable behaviour of consumers during searching for, purchasing and post consumption of a product or service.James F. Engel, Roger D. Blackwell and Paul W. Miniard, “Consumer Behaviour” (1990)
Consumer Behaviour Meaning
The “consumer” more generally refers to anyone engaging in any of the activities (evaluating, acquiring, using or disposing of goods and services) used in the definition of consumer behaviour.
Consumer behaviour is a decision process and physical activity individuals engage in when evaluating, acquiring, using or disposing of goods and services.
Types of Buying Decision Behavior
Different consumers follow different steps in making their choice of products and services.
There is a substantial degree of variation in the choice processes depending upon two key factors, namely the level of involvement and degree of the perceived difference between different alternatives in the market.
There are basically 4 types of buying decision behavior which is discussed below:
Dissonance Reducing Buying Behaviour
Customer involvement in the purchase activity is high and customers cannot find a substantial differentiation among the alternatives.
The consumer is highly involved and sees little difference among brand alternatives. The consumer is highly involved and sees little difference among brand alternatives.
Complex Buying Behaviour
Consumer is highly involved but he finds a substantial difference among the available brands.
In this case, the buyer develops beliefs about the product or service, then he develops a set of attitude towards the product and finally, he makes a deliberate choice. This is a case when products are expensive, bought infrequently, risky and highly self-expressive.
Variety Seeking Buying Behaviour
This kind of behaviour is shown in some situations where the consumer shows low involvement behaviour but there is a significant brand difference.
Consumers show a high level of brand switching behaviour.
Habitual buying Behaviour
This kind of behaviour is shown in some situations where the consumer shows low involvement behaviour but there is no/few significant brand difference.
Consumer Buying Process
In consumer buying process, generally, the purchaser passes through five distinct stages in consumer buying process namely need or problem recognition, information search, alternative evaluation, purchase decision and post-purchase behaviour.
Stage of Problem Recognition
The recognition of a need is likely to occur when a consumer is faced with a ‘problem’. A buying process starts when a consumer recognises that there is a substantial discrepancy between his current state of satisfaction and expectations in a consumption situation.
Stage of Information Search
After need arousal, the behaviour of the consumer leads towards a collection of available information about various stimuli i.e. products and services in this case from various sources (personal, public, commercial, experiential) for further processing and decision-making.
Stage of Alternative Evaluation
Once interest in a product(s) is aroused, a consumer enters the subsequent stage of evaluation of alternatives.
When evaluating potential alternatives, consumers tend to use two types of information:
- a list of brands (or models) from which they plan to make their selection (the evoked set)
- the criteria they will use to evaluate each brand (or model).
Cognitive evaluation: When the consumer uses objective choice criteria.
Affective evaluation: Using emotional reasons for evaluating the alternatives.
Stage of Purchase Decision
Finally, the consumer arrives at a purchase decision. Purchase decisions can be one of the three viz. no buying, buying later and buy now.
No buying takes the consumer to the problem recognition stage. A postponement of buying can be due to a lesser motivation or evolving personal and economic situation. If positive attitudes are formed towards the decided alternative, the consumer will make a purchase.
There are three more important considerations in taking the buying decision:
- Attitude of others such as wife, relatives and friends.
- Anticipated situational factors such as expected family income, expected total cost of the product and the expected benefits from the product.
- Unanticipated situational factors, like accidents, illness etc.
Stage of Post Purchase Behaviour
Post-purchase behaviour refers to the behaviour of a consumer after his commitment to a product has been made.
So post-purchase behaviour leads to three situations, namely customer is satisfied; customer is delighted and the customer is dissatisfied.
Cognitive dissonance: Buyer discomfort caused by postpurchase conflict.
7 O’s Framework of Consumer Behaviour
A framework is developed to understand consumer behaviour by addressing various issues involved in consumer behaviour. This framework is popularly known as 7 O’s Framework and is used for a basic understanding of consumer behaviour
- Occupants: Who is the Consumer
- Object of Purchase: What does the Consumer Buy
- Objective: Why is the Consumer Buying
- Occasion: When do they Buy or How Often do they Buy and Use
- Outlets: Where do they Buy
- Operations: How do they Buy
- Organisation: Who is Involved
Factors Influencing Consumer Behaviour
The consumer decision process explains the internal process as well as individual behaviour for making product or service decisions. Factors influencing consumer behaviour in consumption process are external factors like cultural, social, personal, and psychological factors and
Culture: The set of basic values, perceptions, wants, and behaviours learned by a member of society from family and other important institutions.
Consumers live in a complex social and cultural environment. The types of products and services they buy can be influenced by the overall cultural context in which they grow up to become individuals.
Below are some of the important cultural factors given:
- Social Class
Social factors, in turn, reflect a constant and dynamic influx through which individuals learn different consumption meanings. Below are some of the important social factors given:
- Reference Groups
- Roles and status
A person’s consumption behaviour is shaped by his personal characteristics. Below are some of the important personal Factors given:
Psychological factors also influenced consumers. Internal psychological factors also direct the decision-making process. These factors influence the reason or ‘why’ of buying.
Below are some of the important psychological factors given:
- Attitudes and Beliefs
Economic factor also has a significant influence on buying decision of consumer behavior.
Below are some of the important economic factors given:
- Personal and Family Income
- Income Expectations
- Consumer Credit
- Liquid Assets
Importance of Consumer Behaviour
It is important for marketers to study consumer behaviour. This helps marketers to investigate and understand the way in which consumers behave.
Below are some of the importance of consumer behaviour is given below:
- Manufacturing policies: The study of consumer behaviour affects the manufacturing policies of the organisation. Consumer behaviour helps organisation to plan and develop its products according to consumer need and preference.
- Price policies: Consumer behaviour help the marketer to set the price in the market. Consumer prefers optimal solution combine with production policies.
- Decision regarding channels of distribution: Consumer prefers difference channel of purchase which is influenced by many factors.
- Decision regarding sales promotion: consumer behaviour enables the marketer to know what motive prompt consumer to make purchase and the same are used in overall marketing strategy.
- Exploiting marketing opportunities: Consumer behaviour guide the marketers to understand the consumers problem, needs, want and expectations and according to exploiting marketing opportunities.
- Highly diversified consumer preferences: Availability of more choice now has diversified consumer preference. Therefor study of consumer behaviour is a crucial and challenging task for marketers.
- New Technological product: Rapid introduction of a new product with technological advancement has made the job of studying consumer behaviour more imperative.
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