MGT 311: Principles of Marketing

Consumer Behaviour

Presentation Overview
1. 2. 3. 4. 5. 6. Meaning of consumer behaviour Why study consumer behaviour? Features of consumer behaviour Models of consumer behaviour Consumer decision process Factors affecting consumer behaviour 7. Organisational buying behaviour
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Meaning of consumer behaviour

The buying behaviour of final consumers individual and households who buy goods and services for personal consumption

Why study consumer behaviour?

1. To understand how consumers respond to various marketing stimuli that a firm might use to develop & confirm its competitive position 2. Based on such knowledge, provide consumers with reliable products that meet their expectations
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Why study consumer behaviour?

3. To create customer loyalty necessary for:

Developing a customer base that provides regular income & turnover Winning customers support even in the face of competition Providing goodwill that develops & strengthens the firms market position
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Features of consumer behaviour

Routine response behaviour Consumers frequently buy items of low value that require very little thought Limited decision making Doing some thinking before purchasing an unfamiliar brand. Information may be limited
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Features of consumer behaviour

Extensive decision-making Giving the purchase of durables a good thought before purchase decision This involves seeking information on benefits of substitute products
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Features of consumer behaviour

Impulse buying A consumer buys a product as a result of a strong urge to buy something immediately without giving the purchase decision much thought

Models of consumer behaviour

They help in understanding the relationship betwen marketing stimuli & consumer response

Stimulus-Response Model
Marketing stimuli Product Price Place promotion Other stimuli Buyers black box Buyers responses Product choice Brand choice Dealer choice Purchase timing Purchase amount

Economic Buyer Technological Buyer characterisitics Decision Political process cultural

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Consumer decision process

1. Problem or opportuny recognition

The buyer senses a difference between his actual state and some desired state
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Consumer decision process

2. Information search The consumer gathers information that will enable him make the right decision to attain the desired state of affairs Internal & external informatin search may take place
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Consumer decision process 2. Information search

In searching for information, a consumer may consider brands The number of brands he considers is referred to as the evoked set Marketers can increase the size of the evoked set through repetition especially for low involvement purchases.
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Consumer decision process

3. Evaluation of alternatives The consumer uses information to evaluate alternative brands in the evoked set The evaluative criteria may include features, benefits, brand image, importance, usage, etc. of each brand in the evoked set
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Consumer decision process

3. Evaluation of alternatives Brand image refers to the set of beliefs that consumers hold about a particular brand

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Consumer decision process

3. Evaluation of alternatives Marketers may influence consumers in the evaluation process by stressing product features that appeal to the criteria identified

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Consumer decision process 4. Purchase decision and act This is the stage when a consumer actually buys the product The ability of a purchase intention to be translated into purchase decision could be influenced by attitudes of others & unexpected situational factors
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Consumer decision process 4. Purchase decision and act A purchase decision is influenced heavily by perceived risk Marketers must understand the factors that provoke feelings of risk in consumers & must provide information & support that will reduce the perceived risk
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Consumer decision process

5. Post purchase evaluation The evaluation of a purchase may yield satisfacton or dissatisfaction Cognitive dissonance may occur just after a purchase It is discomfort caused by postpurchase conflict It may lead to return of product or decision not to buy the product again
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Factors affecting consumer behaviour

1. Personal factors Demographic factors Situational factors Level of involvement in decision making

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Factors affecting consumer behaviour

2. Psychological factors Motivation Perception ability Knowledge Beliefs & attitudes

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Factors affecting consumer behaviour

2. Psychological factors Motivation Motives drive the consumer decision process Motives are a form of strong stimulus that drives a person towards the satisfaction of a felt need
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Factors affecting consumer behaviour 2. Psychological factors Motivation Motives are situated between individual needs and a form of action They activate behaviour They are directional Reduce retention to create equilibrium conditon/desired state

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Factors affecting consumer behaviour

2. Psychological factors Motivation Maslows hierarchy theory of motivation seeks to explain why people are driven by particular needs at particular times
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Maslows Hierarchy of Needs

Self actualisation Esteem needs Belonging needs Safety needs Physiological needs
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Factors affecting consumer behaviour

2. Psychological factors Perception This is the process by which people select, organise and interpret information to form a meaningful view of reality It involves three main steps
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2. a.

Factors affecting consumer behaviour Psychological factors Perception Receiving information this could take the form of: Slective exposure: screening out most of the information to which one is exposed Selective distortion adapting information to personal meanings

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Factors affecting consumer behaviour

2. Psychological factors Perception Selective retention keeping only part of the information to which one is exposed, usually information that supports ones attitudes or beliefs
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Factors affecting consumer behaviour

2. Psychological factors Perception b. Organise & integrate information c. The perceptual process create meaning from the organised information
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Factors affecting consumer behaviour

2. Psychological factors Perception Closure is an important aspect of the perceptual process It is regarded as how an individual creates a complete picture from fragments of a picture
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Factors affecting consumer behaviour

2. Psychological factors Perception Marketers can package the marketing mix in such a way that it contributes to maintaining or enhancing the self-perception of the consumer
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Factors affecting consumer behaviour

3. Ability and knowledge Consumers with less knowledge & ability must be helped to have access to the needed information to make purchase decisions

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Factors affecting consumer behaviour

4. Attitudes and beliefs Attitudes feelings towards an object or idea Beliefs - descriptive thought that a person holds about something Marketers understanding of consumer attitudes & beliefs enables them to serve them better
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Factors affecting consumer behaviour

5. Personality Behavioural & individual traits which can be uniquely identified with customerse e.g. Aggression, competitiveness, etc.

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6.

Factors affecting consumer behaviour Social factors Culture and sub-culture Roles and status Group and reference group influence Family influences 4 distinct decision making patterns Social class
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Consumer buying roles

Possible decision makers in a decision making unit Intiator Influencer Decider Buyer User
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Organisational buying behaviour

Behaviour of producers, resellers, & central and local government It is complex in nature due to the ff: a. Buying decision may involve several people who may exert some influence
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Organisational buying behaviour

b. Decisions may take longer time c. Goods bought are to meet the requirements of the whole organisation d. Goods may be complex in nature requiring technical advice & support
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Organisational buying behaviour

e. Organisational buyers are influenced by rational needs and emotional needs f. Buying experts may be involved in the purchase decision

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Types of organisational buying behaviour 1. Straight rebuy automatic & regular purchase of familiar products from regular suppliers 2. Modified rebuy a buyer shops around because of lack of complete satisfaction with current suppliers
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Types of organisational buying behaviour 3. New task buying - an organisation seeks to fill a need never addressed before It may be characterised by lack of information, & uncertainty

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The Decision Making Unit (DMU)

This is also known as the buying centre It refers to the group of people within the organisation involved in a purchasing decision

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Roles within the Decision Making Unit (DMU)

Users Influencers Deciders Buyers Gate keepers

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The organisational buying process

1. Need or problem recognition 2. Development of product specification

3. Search for product & suppliers

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The organisational buying process

4. Evaluation of products & suppliers

5. Placing an order 6. Evaluation of product & supplier performance

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Factors influencing the buying process

Environmental considerations Organisational influences Interpersonal factors Individual factors
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