Consumer Behaviour

Concepts and
Applications
Not a simple picture !!!
 To consider
 influences on consumer buying processes
 problem-solving: pleasure seeking (irrational) vs.
rational views of buying
 how we construe our buying/spending: perceptions,
attitudes & motivations
 pre-exchange, in the exchange itself & post exchange
 categories of influence:
 environmental and cultural
 individual and reference groups
 Insights from learning theory
 B2C and B2B organisational buying behaviours
 marketing strategy & communications design
implications
2
 Obviously
 Individual customers & organisational
customers buy goods & services
 They are stimulated & prompted to buy

Marketers
 are interested in their decision behaviour
 try to stimulate & influence this behaviour to
get better responses from the customer

3
 Marketers, actors & roles in buying
Whois
Who isimportant
importantininthe
thebuying
buying
 marketing concept …"satisfy
decision?
decision?
consumer needs for profit/value"
Whatdo
What dothey
theybuy
buy&&how
howmuch
much??
so.... Whendo dothey
theybuy
buy&&where
where??
When
Howdo
How dothey
theybuy?
buy?
 to segment, target & construct our Whatchoice
What choicecriteria
criteriado
dothey
theyuse?
use?
marketing mix & promotions well, Howdo
How dothey
theyrespond
respondto tothe
theefforts
efforts
we must understand consumers & weuse?
we use?
their behaviour
 we can study actual purchases
then find ways to encourage them Actors and
Actors and roles
roles
to consider buying & then buy !!! the same
the same person
person can
can play
play
 buying may involve
multiple roles
multiple roles
 many steps ••consumers
consumers
 many people
••opinion
opinion formers
formers
 the actual purchase is but one part ••marketers
marketers
of the process ••public
public policy
policy actors
actors
4
 Buyer Behaviour Model
Buyer
Needs - wants, stimuli responses
Product, price, place,
buyer’s
Choices of
promotion etc
black
black •product
Environmental (PEST)
box •brand
factors •dealer
•timing
•price
Buy more, less,
stay loyal etc
5

How we buy (a rational view)
• functional
• emotional ?
• current vs desired situation
• relative importance
• need inhibitors
Needrecognition,
recognition,
Need
problem-awareness
problem-awareness
Informationsearch
Information search
• internal search (memory)
• external search (personal
sources, commercial sources
• third party reports (e.g. Which)
• personal observation/testing
Window-shop––simmering
Window-shop simmeringinterests
interests
Shapedesire,
Shape desire,want
want
Evoked
Informationsearch
Information search
set
Evaluatealternatives
Evaluate alternatives(against
(againstevoked
evokedset)
set)
Buy
Buy

Evaluatealternatives
Evaluate alternatives Post-purchase
Post-purchase
• are they aware of need ? evaluation
evaluation
• can we mediate need inhibitors? Buy
Buy
• can we stimulate awareness &
action Post-purchase
Post-purchase
evaluation
evaluation
6
Operant (or instrumental) conditioning
 Learning based upon the consequences of
behaviour

 the chance of a specific behaviour goes  or 

thru +ve or -ve reinforcement each time the
behaviour happens
 we associate the pleasure or displeasure of the
reinforcement with the behaviour

 Consequences of responding that increase

behaviour are “reinforcers”
 Marketers want to know the “reinforcers”
7
Responses are reinforced, punished,
or extinguished 1
Reinforcement is …
 a consequence that  more frequent behaviour

Positive reinforcement
 a behaviour (response)  a favourable stimulus
(commonly pleasant)  increasing the frequency
of the behaviour
Negative reinforcement
 a behaviour (response)  lessening of an aversive
stimulus (commonly unpleasant) increasing that
behaviours frequency
8
Responses are reinforced, punished,
or extinguished 2
Punishment
 a consequence that causes a behaviour to occur less
often

Positive punishment ("P. by contingent stimulation")

 a behaviour (response)  an aversive stimulus  a

decrease in the behaviour.

Negative punishment ("P. by contingent withdrawal")
 a behaviour (response)  removal of a favourable

stimulus e.g. taking away a naughty child's toy, resulting

in less of that behaviour
9
 Responses are reinforced,
punished, or extinguished 3
Avoidance learning
 a behaviour r  ending of an aversive

stimulus e.g. we no longer contact someone &

so avoid their unpleasantness.

Extinction
 a behaviour (response) that had previously been

reinforced is no longer effective

 the lack of any consequence following a

behaviour
10
 Roles in the decision process
after Blackwell/Miniard/Engel, 2007 Consumer Behaviour, 10th Ed, Thomson

 each role can be acted by parent, children or other

members of the buying centre.
Eachactor
Each actormay
maydisplay
display
Who is multipleroles
multiple roleswhen
whenbuying
buying InfluencingStrategies
Influencing Strategies
••aatoy
toypurchase
purchase
 initiator ••aahouse
house 1.expert influencing
1.expert influencing
••aawashing
washingmachine
machine 2.subtle(incl.
2.subtle (incl. use
useof
of
 influencer ••an
anarmoured
armouredvehicle
vehicle rewards
rewards
••aasound
soundsystem
system 3.emotional
3.emotional
 decider ••computer
computersoftware
software 4.combination
4.combination
 buyer
 user Infants,teenagers,
Infants, teenagers,working
working
women,husbands?
women, husbands?

11
What is the Relative Influence of Husbands

vs. Wives in Decision Making?

How is this changing?

12
 Influences on Consumer
Behaviour
Personal
Cultural  Age
 broadest & deepest influence  Life cycle stage
 cultures & subculture  Occupation
 social classes  Economic circumstances
Social  Lifestyle
 Personality
 Family
 Self-concept
 Social roles and status (multiple)
 Reference groups Psychological
 Membership - primary vs. secondary  Motivation
 Aspirational vs. dissociative  Perception
 Learning
 Beliefs
 Attitudes
13
 Personal influences
Perception
 "mind" processes - selection, association,
 what motivates us
organisation & interpretation. We  what we believe in
 only note some things (selective) i.e. what
grabs attention + distortion & retention  real knowledge, opinion or
 associate & categorise information into faith
meaningful wholes
 interpret/make inferences
 Our attitudes
 information framing e.g.
 relatively consistent
 good news or bad news first ? evaluations, feelings,
 accentuate the positives, eliminate the negatives tendencies towards something
 Three components
Learning  cognitive (belief),
 classical & operant conditioning  affective (feeling),
 conative (behavioural)
 cognitive learning
by rote  personality
vicarious (from others)

reasoning
 self-concept, lifestyle &
life cycle stages
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Perceptual, conceptual & related capacities
Perceptual - Sensing, measuring, judging
 Colour, sound, texture, smell. Interpreting smells, noises, signals
 Monitoring sounds, vibrations, data, information
 Frames of reference – what is your “vantage point”
Conceptual
 associating, abstracting, formulating, calculating, inferring
 understanding processes in the abstract
 deriving ideas & predicting from associated, comparative information
 depends on knowledge and know-how (range & level)
 dealing with symbolic information + its associations
Relating - Ego + alter-ego oriented:
 need for achievement, power, affiliation
 sensitivity & empathy, identification & association, objective-subjective,
attitudes & values
Physical
 Storage, access, processing & transmission capacity, security, privacy
15
 Concepts in socio-cultural
examination
Culture
 a socially constructed complex of Reference groups
values, ideas, attitudes, institutions,
 structures & standards
meanings & symbols that shape and
are shaped by behaviour & maybe influence behaviour.
passed on thru generations Membership
Social Class  groups we actually belong to
 relatively permanent divisions in a
society into which individuals or families Aspirational
may be categorized  We wish to associate with
 based on perceived status & prestige. this group.
Sub- or Micro-culture Disassociative
 a sub-group with its own distinguishing  We do not want to be
modes of behaviour. identified with this group.
Role Power studies
 Behaviours, rights, duties expected of  how roles, groups & norms
an individual in a group by other
members influence individual
behaviour.

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 Opinion formers
 Trendsetters
 influential people in a group who
 purchase new products early
 serve as information sources for others
 The Media
 TV, newspapers, magazines, Internet communication
 commentators
 the media need "stories"
 Sellers & Marketers
 "seeding" the media. Pay media producers for product
placement in "publication channels"
 From a Fashion house to Primark
 Advertising, promotions & incentives
 Word-of-mouth - viral 17
 Personality & self concept
Towards a brand personality:
 extroversion-introversion
“the brand & Me”
 self-confidence, dominance  sincerity
 sociability  down to earth, honest, wholesome,
 autonomy cheerful
 defensiveness  excitement
 daring, spirited, imaginative, up-to-
 adaptability date
 aggressiveness  competence
 reliable, intelligent, successful
Levi Jeans ?  sophistication
Swaferga ?  higher class, charming
Branston baked beans?  ruggedness
Chicken jalfrazi ?  outdoors, tough
Top Gear ?  e.g. Take care of pennies & £ will
Yesterday Channel ? take care of themselves
Lands End?
20
 Components of Attitude
A person’s enduring
favourable or
unfavourable evaluation
Cognitive of some object or idea
(knowledge & beliefs
about a subject/object)

Affective Attitude
(overall feelings or (overall orientation
emotive reactions) toward object or idea)

Behavioural
(how we tend to behave)

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Choice criteria Technical
Technical
 attributes & variables a reliability
reliability Social
Social
consumer uses when durability
durability status
status
performance
performance
evaluating products & social
social
style/looks
style/looks belonging
services comfort
belonging
comfort fashion
fashion
 different members of delivery
delivery
buying centre obviously convenience Personal
convenience Personal
taste
taste self-image
self-image
may use different criteria
Economic
Economic risk reduction
risk reduction
 e.g. a teenager or a WAG price, VfM
price, VfM morals
morals
(self-image), a parent (for running costs
running costs emotion
emotion
the baby), an OAP (price residual
residual
value
value
or risk reduction) life cycle
life cycle
costs
costs
22
 Consumer Problem-Solving
Categories
 Routinised (habitual)
 repeat buys.

 Advertising may influence a change – also

promotions (2 for 1), branding to keep product in

customer’s mind
 Limited problem solving (LPS)
 buyer has some experience, may check prices

etc. Buyers can advertise to stimulate & compare

or reduce risk of brand switching
 Extended problem solving (EPS)
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 Extended problem-solving
Research all
Research all choice
choice
alternatives ++ examine
alternatives examine
solutions
solutions
 alternatives are
alternatives are self-image

differentiated &
differentiated &
risks
numerous
numerous
 high deliberation
high deliberation & & social
factors
involvement time
involvement time
 personally relevant
personally relevant
(risks)
(risks)
high potential
high potential for
for
cognitive dissonance
cognitive dissonance
24
Cigarette advertising

25
 Cognitive dissonance
(after Festinger)
 discomfort when facing logical inconsistencies in our thinking
(cognitions) e.g. a belief in animal rights may be seen as
inconsistent with eating meat or wearing fur.

 We may feel anxiety assoc. with bad decisions: guilt, shame,

anger, embarrassment, stress or other. This can lead to
rationalisation: justifications to support our choices or change
in attitudes, beliefs & behaviours.
 When ideas are consistent … harmony or consonance.

 If cognitions are unrelated, they are "irrelevant" not dissonant.

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 Aesop's "The Fox and the Grapes"

A fox sees some tasty, grapes high on the

vine but can't think how to reach them. He
concludes that the grapes are probably not
worth eating anyway (not yet ripe, too
sour).
Nb. dissonance in the desire for something
unattainable & so the fox irrationally
decides that the "thing" must be flawed
(Sour Grapes).
27
 Smoking
 we know that cigarettes cause lung cancer
 we want to live a long and healthy life
 we can
 quit smoking & reduce the tension between the contradictory
ideas or
 deny conclusions about lung cancer or justify our smoking

 “Only a few smokers become ill". "It only happens to very

heavy smokers“. "If smoking does not kill me, something
else will." "I am a smart, reasonable person who makes
good decisions." Easier to make excuses than to change
behaviour. Humans are rationalizing and not always
rational.
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 Social classes
Chavs
Chavs
•• slang
slang (UK)
(UK) for
for aa subcultural
subcultural stereotype
stereotype
 Upper Uppers •• Aspirants
Aspirants whowho want
want to to be
be inin aa "class"
"class"
above their
above their actual
actual class.
class.
 Lower Uppers •• spend
spend on on fashion
fashion for for upward
upward social
social
mobility.
mobility.
 Upper Middles
•• fixated
fixated onon fashion
fashion 'designer'
'designer' clothing,
clothing,
 Middle Class handbags, gold
handbags, gold jewelery
jewelery e.g.
e.g.
Burberry,
Burberry,
 Working Class
•• trying
trying to
to adopt
adopt lifestyle
lifestyle ofof admired,
admired,
 Upper Lowers referent class
referent class but
but not
not seen
seen asas
successful.
 Lower Lowers successful.
•• considered
considered to to be
be inin poor
poor taste,
taste, ignorant,
ignorant,
•• labelled
labelled asas "trying
"trying tootoo hard,
hard, not
not worthy
worthy
enough".
enough".

29
 VALS2 psychographic groups

 Actualizers
 Fulfilleds
 How do you see
 Achievers each category
 Experiencers behaving as
 Believers buyers?
 Strivers
 Makers
 Strugglers

30
 Forrester Technographics
customer segments by motivation, desire & ability to
invest in technology

31
 Start here
Explain the customer behaviour appeals being
used by … each of the following …
 a selected product group within e.g. Gillette
 a company within the earth-moving equipment industry e.g. JCB,
Caterpillar, Komatsu etc
 A group within the hotel sector including: Hilton, Accor,
Travelodge, Townhouse
 HMV

What common or different customer behaviour appeals are being

used by
 http://www.wickes.co.uk/

 http://www.screwfix.com

 http://www.diy.com/

 http://www.homebase.co.uk
32
 Explain the following in terms of consumer
behaviour debate
 fitting rooms
 return of goods policies e.g. B&Q, Next on-line
 2-for-1, 20% bigger
 interest free for
 3 months (over £300)
 3-years (DFS)
 "Never knowingly undersold" - John Lewis Partnership
 free delivery over £15 (Amazon)
 main dealer trade in values, old car-new car
 easy financing terms
 free insurance
 mobile phone automatic new model + cheaper contract + extras
 home deliveries e.g. Tesco
 £15 (21 days in advance), £26 (7 days), £55 – with on-line booking -
Travelodge
 4x Tesco Club Card points value for Cafe Rouge vouchers (£8 = £32)
33
 Post-purchase evaluation
 We want customer to have positive experiences
from purchase but they may experience

Cognitive Dissonance
Pre-purchase, purchase or post-purchase
 attitudes & behaviour should be consistent with one
another. If you buy a car & your friend thinks that it is
rubbish …..

 uncertainty – "Have I made the right decision?"

 feel anxiety, disappointment, remorse What can
What can
 discrepancy between expectation & experience marketer &
marketer &
 reflect on opportunity cost and lost - difficult
decision, many alternatives seller do?
seller do?
 irrevocable decision
 neurotic customer (impulse buy)
 post-purchase remorse
34
 Post-purchase Behaviour
 expectations are compared to performance
 post-purchase satisfaction influences future
behaviour
 future purchasing behaviour
 word-of-mouth communication
 Marketers try to influence post-purchase
behaviour. How ?
 Post-purchase communication to reduce dissonance,
returns & order cancellations
 Talk with customers:
 discover new uses for existing products
 etc
35
 Evaluate Harley-Davidson Consumer Behaviour
 Hells Angels ? Burly,  Customer types from HD
leathers, bikers, rebels research
adventure-loving traditionalists
New breed:


 sensitive pragmatists
 older  stylish status seekers
 more affluent  laid-back campers
 better educated  classy capitalists
 rubbies (rich urbans)  cool-headed loners
cocky misfits
 Showrooms + sales 

 all loved their Harleys because

approaches  independence, freedom, power
 more than a machine – part of
self-expression
 classic look, throaty sound
 American legend

36
 Scope of B2B Market
 Agriculture
 different needs & buying
 Mining patterns e.g. medical from
 Construction rubber gloves vs body scanner
 Manufacturing  buy raw materials/inputs to
make other goods/services e.g.
 Transport sugar & flavouring as inputs for
 Wholesale & retail Pepsi
 sell on to other business users
 Finance, insurance, or consumers e.g. Argos
property  use purchases to conduct
 Government business e.g. stationery, legal
services, IT/systems
 Non-profit & voluntary consultancy, marketing services
organisations

37
 Purchasing decisions in B2B Markets
Buying is less frequent.
new task buy
 buying decision not been
made before
modified rebuy
 bought before but this time
change spec. or new supplier
straight rebuy
 routine purchase made many
times before
One-off, a batch or steady
flow (JIT)
Long, complex negotiation
Service & consistency of
quality & supply are vital
Buying centre
 Buying often a group process.
Who is in the buying group?
Users
 use the product e.g. trucks
Influencers (direct or indirect)
 Tech know-how, budget etc
Deciders
 Make the actual decision:
purchasing officer, manager,
product/service user
Gatekeepers
 Control flow of information
Buyers
 Select suppliers & negotiate
terms
38
 quantity
Choice criteria continuity
quality

Organisational buying price

financing
life cycle costs
prody
maintenance
Can we assume that B2B residual values
buying motives are rational, risks
Needrecognition,
Need recognition, politics
methodical & objective
problem-awareness
problem-awareness personal

Performancefeedback
Personal factors incl:
feedback&
&
Determinespecification
Determine specification&
&
Performance quantity
evaluation relationships,
evaluation self advancementquantity
competition
Motivators include
legal steps
Integratepartner
partner financing Searchfor
Search forsources,
sources,
Integrate
systems Cost & profit-related benefits research&
research &approve
approve
systems JIT
Incentives & promotional support
logistics
conflict
Supply alliances for expansion & proposals
Receive
Receive proposals&
&analyse
analyse
Finalisecontract
Finalise contract& & outsourcing
order routines
order routines
synergy + share costs, improve
productivity etc
Evaluate,negotiate,
Evaluate, negotiate,
select
select 39
 Relationship Marketing
establishing & developing successful exchanges with customers.

Influences
global competition & defensive strategies. Growth in services
(direct relationships). Focus on the ‘value chain’ + the ‘value
proposition’ incl offering specific competencies

Customer relationship management (CRM)

maximise customer retention & share of customer’s business
past behaviour is important

The future involves

increased WWW use – direct marketing & personalisation
costs of servicing unprofitable customers

focus on better servicing of other customers

40