What is Consumer Behaviour? Definition, Importance, Types, Stages

What is Consumer Behaviour?

Consumer behavior is the study of consumers’ action during searching for, purchasing, using, evaluating and disposing of products and services they expect will satisfy their need. It helps marketers in understanding consumer decision-making process.

Consumer behaviour can be defined as “activities people undertake when obtaining, consuming, and disposing of products and services” is provided and detailed.

• Obtaining “activities leading up to and including the purchase or receipt of a product”.
• Consuming “how, where, when, and under what circumstances consumers use products”.
• Disposing “how consumers get rid of products and packaging”.

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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)

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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.

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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:

1. Dissonance Reducing Buying Behaviour
2. Complex Buying Behaviour
3. Variety Seeking Buying Behaviour
4. Habitual buying Behaviour

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.

Read: Market Segmentation

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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.

1. Stage of Problem Recognition
2. Stage of Information Search
3. Stage of Alternative Evaluation
4. Stage of Purchase Decision
5. Stage of 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:

1. a list of brands (or models) from which they plan to make their selection (the evoked set)
2. 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.

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Participant in Buying Process

Consumer behaviour is influenced not only by consumer personali- ties and motivations, but also by the various participant in the buying process. Consumer decision making is an intricate process.

To understand how consumers actually take the decision to buy a product, it is important for marketers to identify who makes and has input in the decision-making process. In a buying process there are various participants involved, their roles are explained as follows:

• Initiator
• Influencer
• Gatekeeper
• Decider
• Buyer
• Users

Initiator

Initiator is the individual who determines that some need or want is not being fulfilled and hence initiates a purchase. An initiator is a person who first identifies an existing problem or need that can be resolved by making a purchase.

For example, in case of a family, a housewife can be the initiator. As housewife knows what is required in the home.

Influencer

Influencer is a person who influences the buying decision, actual purchase or the use of product or service. Influencer can be a technical expert, consultant or anyone who provides input for the buying decision. For example, a salesperson might influence you to buy a product.

Gatekeeper

A gatekeeper is the one who Influences the processing of information. The gatekeeper may possess a greater expertise in acquiring and evaluating the information.

For example, in a family a homemaker may be the gatekeeper who will disseminate information.

Decider

A decider may not have the formal authority to decide upon a purchase decision, but has sufficient weight in the buying decision process of products or services. A decider is the one who vets what to buy, how to buy, when to buy and from where to buy.

For example, in family generally it is the male head of the family who gives assent to buy.

Buyer

A buyer is the one who is involved in the physical activity of making a purchase and conducts the final transaction or exchange. At the time of purchasing the buyer can negotiate on the price.

For example, housewife may be the buyer who actually buys all the foodstuffs, rations and toiletries of the family.

Users

They are the ones who are reaping the benefit of the product/service acquired. For instance, the family members who use or consume a particular product or service.

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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

1. Occupants: Who is the Consumer
2. Object of Purchase: What does the Consumer Buy
3. Objective: Why is the Consumer Buying
4. Occasion: When do they Buy or How Often do they Buy and Use
5. Outlets: Where do they Buy
6. Operations: How do they Buy
7. Organisation: Who is Involved

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Factors Influencing Consumer Behaviour

The consumer decision process explains the internal process as well as individual behaviour for making product or service decisions.

1. Cultural Factors
2. Social Factors
3. Personal Factors
4. Psychological Factors
5. Economic Factors

Cultural Factors

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:

• Culture
• Subculture
• Social Class

Social Factors

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:

• Family
• Reference Groups
• Roles and status

Personal Factors

A person’s consumption behaviour is shaped by his personal characteristics. Below are some of the important personal Factors given:

• Age
• Income
• Personality
• Self-concept
• Occupation
• Lifestyle
• Gender

Psychological Factors

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:

• Motivation
• Learning
• Attitudes and Beliefs
• Perception

Economic Factors

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

Read: Business Buyer Behaviour

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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:

Identifying market opportunity

The study of consumer behaviour helps in identifying the unmet needs and wants of consumers. This demands evaluating the prevailing trends in the marketplace, consumers’ lifestyles, income levels and emerging influences.

Selecting target market

A review of market opportunities often helps in identifying distinct consumer segments with very distinct wants and need. Identifying these groups, learning how they behave and how they form purchase decisions enables the marketer to design and market products /services particularly suited to consumers wants and needs.

For example, an FMCG company conducted a consumer behaviour study and found out that many existing and potential shampoo users preferred buying low-priced sachets containing enough quantity for one or two washes rather than big bottles of hair shampoo. Based on the research the company introduced shampoo sachets to gain foothold in market.

Customer retention

Organisations lay emphasis on retaining customers than merely on customer acquisition. Customer retention is the process of maintaining existing customers by catering to their needs and even exceeding their expectations. Study of consumer behaviour helps to convert a casual customer into a committed loyal customer.

Dynamic nature of market

Consumer behaviour lays emphasis on dynamic nature of the market. It helps the manager to be dynamic and proactive in satisfying consumers ahead of its competitors. If the organisation is not able to keep up with the current market trends it will find it arduous to survive in the industry.

Marketing-mix decisions

Once unsatisfied needs and wants are identified, the organisation has to evaluate the right mix of product, price, distribution and promotion. In this context, consumer behaviour study is pivotal to resolve many challenging questions.

Effective use of productive resources

The study of consumer behaviour assists the manager to make the organisational efforts consumer-oriented. It ensures optimum utilisation of resources for achieving maximum efficiency.

Fulfil varied consumer preferences

With the onset of globalisation customers have wide range of alternatives in contrast to pre 1991 era. So, in order to cater to diverse customer preferences, it is pertinent for marketers to study customer behaviour.

For example, in the current scenario customers have various car manufacturers to choose from such as Hyundai, Honda, Mercedes, BMW etc. Every automobile maker leverages a certain segment of customers.

Address custom needs

Consumer opt for differentiated products that depict their special needs, personalities and lifestyles. The study of consumer behaviour enables organisations to gratify the peculiar needs.

For example, when Onida 21 was first introduced, it was advertised on television ‘for the elite class’. Likewise, Maggi introduced its tomato sauce with emphasis on “It’s different”.

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Application of Consumer Behaviour in Marketing

Application of consumer behaviour in marketing are:

1. Analyzing market opportunity
2. Selecting target market
3. Marketing mix decisions
4. Use in Social and Non-profits Marketing

Analyzing market opportunity

Consumer behaviour study helps in identifying the unfulfilled needs and wants of consumers. This requires examining the trends and conditions operating in the marketplace, consumers’ lifestyles and income levels. This may reveal some of the unsatisfied needs and wants of the consumers.

The trend towards increasing number of dual income household and greater emphasis on convenience and leisure have led to emerging needs for household gadgets such as washing machine,mixer grinder, vacuum cleaner and childcare centres etc.

Selecting target market

A review of market opportunities often helps in identifying distinct consumer segments with distinct and unique wants and needs. Identifying these groups, learning how they behave and how theymake purchase decision enables the marketer to design and market products or services particularly suited to their wants and needs.

For example, consumer studies have revealed that many existing and potential shampoo users did not want to buy bigger shampoo packs and would rather prefer a low-priced sachet containing enough quantity for one or two washes. This finding led companies to introduce the shampoo sachet, which became good seller.

Marketing mix decisions

Once unsatisfied needs and wants are identified, themarketer has to determine the right mix of product, price, distribution and promotion. Here too consumer behaviour study is very helpful in finding answers to many perplexing questions. The answers to these questions are obtained by consumer behaviour research.

Use in Social and Non-profits Marketing

Consumer behaviour studies are useful to design marketing strategies by social, governmental and not-for-profit organisations to make their programmesmore effective such as family planning, pulse polio, safe driving etc.

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Consumer Behavior and Marketing

Following changes can be observed in the approach of marketers towards consumers. Marketing oriented firms are focusing on customer satisfaction and retention.

• Shifting from supply to demand: This shows the change in focus from the supply products to creatind demand for the product. Producer determine what consumer will purchase before making changes and/or adding a product from its offerings.
  
  
• From manufacturing to selling: It shows the change in focus from “how to manufacture goods” to “how to sell” goods. It becomes practical in nature when production increased more quickly than products were purchased.
  
  
• From selling to marketing: It shows the change in focus from “selling products” to the “marketing of products”. It discusses the change from a position of scarcity following World War II to a change by the 1950s causing the marketing era when selling to consumers became vital to the company. The point is made that Wal-Mart is in the business of “buying what people need to consume”, not in selling things.

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Marketing Management Topics

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