UNDERSTANDING CONSUMER BEHAVIOUR
What Is Consumer Behaviour?
Consumer behaviour is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. Successful marketing requires that companies fully connect with their customers.
Adapting a holistic marketing orientation means understanding customers, gaining a 360-degree view of both their daily lives and the changes that occur during their lifetime so that the right products are marketed to the right customers in the right way.
Studying consumers provides clues for improving or introducing products or services, setting prices, devising channels, creating messages and developing other marketing activities. To implement marketing strategy, marketers examine-what, where, when and how consumers buy
Consumer markets are the markets for products and services bought by individuals for their own or family use. Goods bought in the consumer market can be categorized in several ways such as:
Fast-Moving Consumer Goods (FMCG’s) – these are high volume, low unit value but with fast purchase e.g. ready meals, newspapers, soap, and cooking oil
Consumer Durables – these have low volume but high unit value e.g. cars, fridges/freezers, cookers, television sets, washing machines, computers etc.
Soft Goods – these are similar to consumer durables except that they wear out more quickly and therefore have shorter replacement cycle e.g. clothes, shoes etc.
Consumer Marketing refers to the marketing of the above goods and services for personal consumption. However, there could be exceptions whereby Cars are bought for both personal and organizational use.
This involves marketing products or services to other companies, government bodies, institutions (such as schools, hospitals and churches) and other organizations. McDonald's and Burger King buy products such as salt, and services to use in the production of their products. The business market consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others.
Characteristics Affecting Consumer Behaviour
1. Cultural Factor
Culture – Culture is the fundamental determinant of a person’s wants and behaviour. The growing child acquires a set of values, perceptions, preferences and the behaviour through his or her family and other key institutions. A child grown in USA is exposed to the following values: achievements and success, efficiency and practicality, progress, material comfort, individualism, freedom and youthfulness. What about a child grown in Ghana?
Subculture – Each culture consists of smaller group (subculture) of people with shared value systems based on common life experiences and situations. These subcultures can be ethnic, religious, racial or regional groups as well as those that form around music groups. Nestle Gh Ltd (MaggieHomowoCooking contest) Guinness & MTN have been exploiting our festivals to promote and build their brands and Corporate Image.
Social Class – Virtually all human societies exhibit social stratification. It is a relatively homogeneous and enduring division in a society, which is hierarchically ordered and whose members share similar values, interests, and behaviours. Social classes reflect not only income but also other indicators such as occupation, area of residence, education, and wealth. Social classes show distinct product and brand preferences in many areas, including clothing, home furnishing, leisure activities, automobiles, and media consumption
2. Social Factors
Group Membership: Anyone who has ever “gone along with the crowd" knows that people act differently in groups than they do on their own. Since many of the things we buy are consumed in the presence of others, group behaviours are important to marketers
Primary Groups: A person has continuous /informal interaction including family members, friends, neighbours, and co-workers with these groups.
Reference Group: These are groups that have direct/face-to-face or indirect influence on a person’s attitudes and behaviours. A set of people a consumer wants to please or imitate. Consumers refer to these groups in evaluating their behaviour i.e. what they wear, where they go and what brands they buy
Secondary Group: A person has formal relations and less continuous interaction including religious organizations, professional associations, and trade unions with these groups.
Opinion Leader: Is a person who influences others' attitudes or behaviour because others perceive him/ her as possessing expertise about the product. Opinion leaders are often among the first to buy new products, so they absorb much of the risk, reducing uncertainty for others who are not as courageous. Marketers try to reach opinion leaders by identifying demographic and psychographic characteristics associated with them and coaxing them especially the celebrities to use their products sometimes before they are launched.
The Family: This is probably the most important consumer buying organization in society. Family members constitute the most influential primary reference group. Marketers are interested in the roles and relative influence of the husband, wife, and children in the purchase of a large variety of products and services.
3. Psychological Factors
Psychology helps marketers understand the ‘why” and “how” of consumer behaviour. In the psychological situation, consumer buying behaviour is influenced by four factors including: Motivation, Perception, Learning, and Beliefs & Attitudes.
Motivation is an inner state that energizes, activates, moves or channels behaviour towards certain goals (Assael). Motivation arises from perceived needs. These can be grouped into biogenic and psychogenic needs:
Biogenic needs: arise from physiological state of tension e.g. thirst, hunger, discomfort
Psychogenic needs: arise from psychological state of tension such as esteem, belongingness.
Maslow’s theory of motivation states that needs are satisfied based on importance. He argues that a consumer will satisfy the most important need first
Maslow’s Hierarchy of Needs
Physiological Needs (water, sleep, food)
Safety Needs (security, shelter, protection)
Social Needs (love, friendship, acceptance by others, belongingness)
Ego Needs (Self-esteem, prestige, status, recognition, accomplishment)
Self- Actualization (self-fulfilment, realization, and enriching experience)
The theory helps marketers understand how various products fit into the plans, goals, and lives of consumers.
A motivated person is ready to act. How the motivated person actually acts is influenced by his or her perception of the situation. Perception is the process by which an individual selects, organizes, and interprets information inputs to create a meaningful image of a situation.
Selective Attention- Listeners select part of the message that interests them. Sexual attraction are used to attract attention
Selection distortion- here receivers distort the information they receive if the information does not agree with their existing beliefs, opinions
Amplification- the receiver adds things to the message that are not there.
Different people in the same motivated and objective situation may act quite differently because each perceives the situation differently. For example, one person might perceive a fast talking sales person as aggressive and insincere, another as intelligent and helpful. People can emerge with different perceptions of the same object because of three perceptual processes: selective distortion, selective attention, and selective retention. In marketing, people's perception are important than the reality.
Learning involves changes in an individual’s behaviour arising from experience. Most human behaviour is learned. Learning theorists believe that learning is produced through:
Drive: Strong internal stimulus that compels a person to act in a particular way (motive) e.g. thirst, hunger, discomfort etc
Response: Action taken as a result of the cue, e.g. purchase of beer, soft drink or air-conditioner
Reinforcement: If experience (from using the beer, soft drink, or air-conditioner) is rewarding /satisfying, the person will continue to take same action anytime he feels thirsty/uncomfortable. Habit is then formed which may result in brand loyalty.
d. Beliefs & Attitudes
Through doing and learning, people acquire beliefs and attitudes and these in turn influence buying behaviour. A person’s belief is the descriptive thought that he/she holds about something. His attitude is his/her enduring favourable or unfavourable evaluation, emotional feeling and action tendencies toward some object (product/service) or idea, e.g. attitudes towards religion, politics, music which may be positive or negative. Marketers need to decide which part of an attitude is the most important driver of consumer preferences e.g. ( Diet coke/Pepsi in blind/branded test)
Lifestyle: Is a pattern of living that determines how people choose to spend their time, money, and energy and that reflects their values, tastes, and preferences Consumers often choose goods, services and activities that are associated with a certain lifestyle. Analysis of consumer lifestyles (i.e. psychographics) is important in producing insights into consumer behaviour. For instance, lifestyle analysis is useful in segmenting and targeting consumer markets
Personality: Each person has personality characteristics that influence his or her buying behaviour, By personality, we mean a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli. Personality is often described in terms of such traits as self-confidence, dominance, autonomy, deference, sociability, defensiveness, aggression, and compliance.
Personality can be a useful variable in analyzing consumer brand choices. The idea is that brands also have personalities, and that consumers are likely to choose brands whose personality matches their own. We define Brand Personality as the specific mix of human traits that may be attributed to a particular brand.
Self-Concept: Is an individual’s self-image that is composed of a mixture of beliefs, observations, and feelings about personal attributes. Self-image is how a person thinks of himself or he thinks others think of him.
4. Situational Factors
Some important situational cues are;
The Physical Environment: Marketers are aware that factors such as décor, smells, lighting, music, crowding, and even temperature can significantly influence many purchases. Many retailers are focusing on adequate packing, cyber-hangout and in-store display to influence the consumer decision-making process.
Time: Marketers know that the time of day, the season of the year, and how much time one has to make a purchase affect decision-making. Time is one of consumers' most limited resources. The sense of time poverty makes consumers responsive to marketing innovation that allow them to save time including such services as drive-through lanes at fast food restaurants and ordering products on the web.
Social Surrounding: Including the other people present when the purchase decision is made, may affect what is actually purchased. Thus, a playboy who went to a pharmacy to buy condoms late in the night ended up buying a bottle of tricilicate when he came face to face with an elderly man he had woken up from sleep.
Purchase Task: Is the reason underlying the consumer’s decision to buy which may be as a gift or for the buyer’s own consumption or consumption by the members of the household
The Consumer Decision Process-How They Buy;
Need identification/Problem awareness
Evaluation of alternative solutions (products)
Selection of an appropriate solution (product)
Post-purchase evaluation of decision