Week 3 - Consumer & Buyers Behaviour Flashcards
What is consumer behaviour
Consumer behaviour is the term used to describe the analysis of the behaviour of individuals and households who buy goods and services for personal consumption
Influences on customer behaviour
Situational
Group
Individuals
Situational
Physical
Social
Time
Motivational
Mood
Group
Cultural (Cultural, subcultural, social class) - The influence of the values, beliefs and customs of the person’s community.
Social (Reference group, family, roles and status) - The influence of other people
Individuals
Personal (Demographic, lifestyle, personality and self-concept)
Psychological (motivation, perception, beliefs and attitudes, learning)
Nudge Theory (Situational)
Involves slightly altering the environment - choice architecture
Make people behave in a predictable way
Does so in a way without disposing of alternative
Does not provide significant incentives for the behavioural change
Cultural Factors
From a marketing perspective, this level of analysis corresponds with that of the mass market
Culture (1)
The broadest group influence on behaviour is arguably that of culture
Culture (2)
Culture is a system of knowledge, beliefs, values, rituals and artefacts by which a society or other large group defines itself
Culture (3)
Culture is multidimensional and includes both tangible and intangible elements
Geert Hofstede cultural dimensions theory
Power distance - The extent to which the less powerful members accept and except unequal power distribution
Uncertainty avoidance - To what extent members tolerate uncertainties
Individualism - Focus on the rights and concerns of each member
Masculinity - Extent to which members stress different expectations for men and women
Subculture
Group of individuals who differ on some influential dimensions
Extracted from the broader culture in which they are immerse
Important to consider when their shopping and purchasing behaviour is significantly different from the remainder of the population
Social Class
Individuals of similar rank within the hierarchy
Economic indicators
- Income
- Occupation
- Educational background
Social Factors
The social level is concerned with developing an understanding of the behaviour of the individual within the wider group
Focused on understanding how the group influences the behaviour of its individual members
Social Factors (2)
Typically, through group pressures on the individual to conform with group norms
Reference Group - Any group which an individual looks for guidance (values, attitudes, behaviour)
The influence of reference groups is particularly strong when the individual lacks previous experience as a guide for behaviour
Reference Groups
Major Reference Groups
- Membership Reference Group
- Aspirational Reference Groups
- Dissociative Reference Groups
Opinion Leader
Major Reference
Those we are part of already
Aspirational Reference
Those we want to be associated with
Dissociative Reference
Those we don’t want to be associated with
Opinion Leader
A reference group member who provides relevant and influential advice about a specific topic of interest to group members
Family
For most people, the social group with the most influence over their behaviour is the family
Individual Factors
Factors that influence the consumers who operate independently of social circumstances
Relates to personal and psychological factors
Personal Characteristics
At the level of individual buyer or consumer, we can identify a range of personal characteristics
These personal characteristics, in some ways constitute an individual’s identify and, in this sense, are objective and relatively stable in the short term
Demographic
Describe using existing objectives, measurable characteristics that are either assumed or demonstrated to be related to the purchase or consumption of products
Lifestyle
Defined by how they spend their time and how they interact with others
Significant difference between an individual’s actual lifestyle and their preferred lifestyle
Personality
The most distinctive characteristic that defines an individual’s behaviour
While relatively consistent and enduring, it does change throughout life
Changes are normally in response to social and environmental influences and personal experiences
Personal Characteristics
Psychological characteristic describe - - internal factors that shape:
- Thinking
- Aspirations
- Expectations
- Behaviours of the individual
Motivation
Used to describe the individual’s internal drive to act to satisfy unfulfilled needs or achieve unmet goals
Often specific to the individual and situation, but some motives are consistent over time and across the population
Motivation: Maslow Hierarchy Of Needs
- Self-actualisation (Creative arts, service to others)
- Esteem (Respect from peers)
- Love or belongingness (Intimacy)
- Safety (Housing, money)
- Physiological (Hunger, thirst)
Beliefs and attitudes
Consumers rely upon these when making judgements and products for which there is no readily apparent need.
The three components that make up an attitude are:
- The cognitive component
- The affective component
- The behavioural component
Perception
Perception is the psychological process that filters, organises and attributes meaning to external stimuli
Perception is selective and can result in the following
- Selective exposure
- Selective attention
- Selective distortion
- Selective retention
Learning
Learning is the process by which individuals acquire new knowledge and experiences
Behavioural learning theories stress the role of experience and repetition of behaviour
Cognitive learning theories describe learning that takes place through rational problem solving, and that emphasise the acquisition and processing of new information
Consumer decision-making process
Need/want recognition
Information research
Evaluation of options
Purchase
Post-purchase evaluation
Consumer decision-making process (2)
There are exceptions to this process.
- Habitual Decision Making - Involves little involvement with the purchase
- Limited Decision Making - Involves seeking limited information to evaluate options for infrequent purchases within familiar product categories
- Extended Decision Making - Involves a high level of involvement with the purchase decision in a protracted, deliberate and detailed way
Introduction to Business Markets
Business markets (Business-to-Business) have distinctive characteristics that make them different from consumer markets
Business markets frequently have a small number of large competitors and are made up of a small number of large buyers
Purchases are often for large amounts
Business markets are much larger in revenue term than the consumer markets they service
Business Markets (1)
Business markets are made of individuals or organisations that purchase products for one or more of the following three purposes
- To resell the product
- To use the product in the production of other products
- To use the product in their daily business operations
Business Markets (2)
The overall business market comprises four major categories
- Reseller markets
- Producer markets
- Government markets
- Institutional markets
Reseller Markets
Reseller markets buy products in order to sell or lease them to other parties for profit
Wholesalers - Purchase products from suppliers and producers for resale to other intermediaries
Industrial Distributors - Purchases products from producers and sell them on to organisational buyers
Retailers - Purchase products from suppliers, manufacturers or other intermediaries for resale to consumers
Producer Markets
Producer markets purchase product for use in the production of other products or for use in their daily business operations
They operate across all sectors of the economy
- Primary (agriculture and mining)
- Secondary (industries and manufacturing)
Government Markets
Governments that buy and sell products to provide services for their citizens
The government sector represents a substantial provider and purchaser of goods and services.
Demand can fluctuate widely because ‘fiscal’ policy is used to attempt to smooth macroeconomic fluctuations or as governments of competing political persuasions alternate in power
The time, cost and uncertainty make many companies reluctant to do business with the government, regardless of the potential sales revenue.
Institutional Markets
Not-for-profit organisations
NFP organisations typically have different goals and fewer resources than commercial organisations
Marketing to such organisations will often be less financially profitable, but overall the NFP sector still comprises a very substantial market
Business Buying Behaviour
Business purchases usually take the form of a straight rebuy, a modified rebuy or a new task purchase
The level of involvement is also reflected in the buying approach the business takes, which may involve some or all of the following
- Negotiation
- Description
- Inspection
- Sampling
Straight Rebuy
Occurs when buyers purchase the same product routinely from established vendors under already-established terms of sales, often through an automated or semi-automated ordering system
Modified Rebuy
Usually involves some degree of evaluation of alternative product options
New task purchase
When a business identifies a new problem or introduces a new process or product, where they buy the product for the first time.
The Business Decision-Making Process
The business decision-making process is the same as the consumer decision-making process
