Lecture 4: Understanding Consumer Buyer Behaviour

Question 1

What is consumer market?

Answer 1

• Final consumers (comprising individuals and households) that buy goods and services for personal consumption
  
  • Personal consumption (Buying noodles for ourselves or our household)
  • Not personal consumption (Aunty at the food court using noodles as a ingredient for a business)

Question 2

Characteristics affecting consumer behaviour

Answer 2

1) Cultural (Culture, subculture, social class)
2) Social (Membership / Reference groups and social networks, family, roles and status)
3) Personal (occupation, Age and life cycle stage, economic situation, lifestyle, personality and self-concept)
4) Psychological (Motivation, Perception, Learning, Beliefs and attitudes)

Question 3

Cultural

Answer 3

• Culture
  
  • the set of basic values, perceptions, wants & behaviours learnt by a member of society from a family and other important institutions
    (In Japan, bowing is a common greeting, reflecting cultural values of respect and politeness.)
• Subculture
  
  • group of people with shared value systems based on common life experiences and situations
    (Muslims following halal dietary laws, which influence food choices and restaurant preferences.)
• Social class
  
  • measured as a combination of occupation, income, education and wealth
    (Upper Class: A CEO living in a luxury condominium, driving a high-end car, and sending children to international schools)

Question 4

Social

Answer 4

• Membership group
  
  • has direct influence and to which a person belongs
    (A university student who is part of a sports team, where teammates influence their choice of athletic brands and lifestyle)
• Reference group
  
  • servers as aspirational Group in which an individual does not belong to, but aspires to identify with
    (A junior executive who looks up to corporate leaders and adopts their work habits and investment strategies.)
• Family
  
  • roles within the household influence consumer behaviour
    (Parents influence a child’s preference for home-cooked meals over fast food)
• Roles and status
  
  • consists of activities which people are expected to perform according to the people around them
    (A CEO is expected to wear formal business attire and attend high-profile networking events)

Question 5

Personal

Answer 5

• Occupation
  
  • Occupational groups or job roles
  • Doctor buys medical equipment
• Age and life stage
  
  • demographics and life-changing events
  • Parents buy kid’s products
• Economic situation
  
  • income, savings
  • High-income person buys luxury items
• Lifestyle
  
  • person’s pattern of living, measured in terms of activities, interests, opinions
  • Health-conscious person buys organic food
  • Luxury-focused person buys premium goods
• Personality and self-concept
  
  • unique psychological characteristics that distinguish a person or group
  • Extrovert buys trendy clothes, introvert prefers practical items

Question 6

Psychological

Answer 6

#1 Motivation
- Need that is sufficiently pressing to direct a person to seek satisfaction

  1.   **Physiological Needs** (Basic survival needs like food, water, shelter, and sleep)
2.	**Safety Needs** (Security in health, finances, job stability, and personal safety)
3.	**Love & Belonging** (Relationships, friendships, family, and social connections)
4.	**Esteem Needs** (Self-respect, recognition, career achievements, and confidence)
5.	**Self-Actualization** (Personal growth, creativity, and reaching full potential)

#2 Perception
how people interpret information based on their beliefs
1. Selective Attention – People focus only on information that interests them
(An Apple fan notices Apple ads but ignores Samsung’s)

2.	Selective Distortion – People interpret information to fit their beliefs  (If Samsung says their phone is “easy to use,” an Apple fan might think it’s because it lacks features)

3.	Selective Retention – People remember positives about their favorite brand and forget competitors’ strengths. (An Apple fan recalls Apple’s innovations but forgets Samsung’s battery life)

#3 Learning
the process by which a person’s behavior changes based on experience. It happens through:
• Drive – A strong internal need (hunger)
• Cues – External stimuli that trigger a response (a food ad)
• Response – The action taken (buying the advertised food)
• Reinforcement – Positive or negative outcomes that influence future behavior (enjoying the food encourages repeat purchases)

#4 Beliefs and attitudes
- Beliefs
- refers to descriptive thought that a person holds about something
- Attitude
- describes a person’s relatively consistent evaluations, feelings, and tendencies toward on object or idea
- E.g. I believe that the Japanese make good quality products

Question 7

Buyer Decision Process

Answer 7

1. Need Recognition – The buyer realises they have a need or problem
   • A person feels thirsty and needs a drink
   2. Information Search – The buyer looks for solutions
      • They check online reviews or ask friends about the best drinks
   3. Evaluation of Alternatives – The buyer compares different options
      • Deciding between Coke, Pepsi, or a fruit juice based on price, taste, or health benefits
   4. Purchase Decision – The buyer selects and buys a product
      • Choosing Coke because of familiarity and brand preference
   5. Post-Purchase Behavior – The buyer evaluates their satisfaction
      • If they enjoyed the Coke, they may buy it again. If not, they might switch brands next time