CHAPTER 2

UNDERSTANDING CONSUMER
BEHAVIOR
LEARNING OUTCOMES
2.1 Consumer buying behaviour
2.2 Factors influencing consumer buying behaviour
2.3 Consumer buying decision-making process
2.4 Types of consumer buying decisions
LO 1 : Consumer buying behaviour

Consumer Behaviour
Processes a consumer uses to make purchase decisions, as well as to
use and dispose of purchased goods or services; also includes factors
that influence purchase decisions and product use.
consumers make
purchase decisions

Consumer
behaviour = HOW

consumers use and

dispose of product
LO 2 : Factors influencing consumer buying
behaviour
1.
2. Social Factors

• Many consumers seek out the opinions of others to reduce their

search and evaluation effort or uncertainty, especially as the
perceived risk of the decision increases.

• Specifically, consumers interact socially with reference groups,

opinion leaders, and family members to obtain product
information and decision approval.
• Reference group is a group in
society that influences an
individual’s purchasing
behavior. Consumers learn
from observing how members
of their reference groups
consume, and they use the
same criteria to make their
own consumer decisions.
• Opinion leader is an
individual who influences
the opinions of others.
Companies sometimes use
movie stars, sports figures,
and other celebrities to
promote products, hoping
they are appropriate
opinion leaders.
• Family members is the family is
the most important social
institution for many consumers,
strongly influencing values,
attitudes, self-concept—and
buying behavior.
Decision-making roles among
family members tend to vary
significantly, depending on the
type of item purchased.
3. Individual Factors
A person’s buying decisions are also influenced by personal characteristics that
are unique to each individual, such as gender, age, life-cycle stage and also
includes personality, self-concept, and lifestyle.

• Personality is a way of organizing and grouping the consistencies of an

individual’s reactions to situations.

• Self-concept is how consumers perceive themselves in terms of attitudes,

perceptions, beliefs, and self-evaluations.

• Lifestyle is a mode of living as identified by a person’s activities, interests, and

opinions
4. Psychological Factors

An individual’s buying decisions are further influenced by psychological factors:

perception, motivation and learning. These factors are what consumers use to
interact with their world.

• Perception is the process by which people select, organize, and interpret

stimuli into a meaningful and coherent picture.

• Motivation is the driving force that causes a person to take action to satisfy
specific needs (Physiological need, safety need, Affiliation need, Esteem need
& Self-Actualization need)

• Learning is a process that creates changes in behavior, immediate or

expected, through experience and practice.
LO 3 : Consumer buying decision-making process
When buying products, particularly new or expensive items, consumers generally
follow the consumer decision-making process as shown below. These five steps
represent a general process that can be used as a guide for studying how
consumers make decisions.

Need Recognition

Cultural, Social, Information Search

Individual and
Psychological Evaluation
factors would of Alternatives
affect all steps
Purchase
Postpurchase
Behavior
LO 3 : Consumer buying decision-making process
STEP 1 : Need Recognition
Need recognition occurs when consumers are faced with an imbalance between actual and
desired states that arouses and activates the consumer decision-making process. Need
recognition is triggered when a consumer is exposed to either an internal or an external stimulus.

• Stimulus is any unit of input affecting one or more of the five (5) senses: sight, smell, taste,
touch, hearing.

• Internal stimuli are occurrences you experience, such as hunger or thirst. is a way of
organizing and grouping the consistencies of an individual’s reactions to situations.

• External stimuli are influences from an outside source such as someone’s

recommendation of a new restaurant, the color of an automobile, the design of a
package, a brand name mentioned by a friend, or an advertisement on television or
radio.
STEP 2 : Information Search

An information search can occur

internally, externally, or both.

• Internal information search is

the process of recalling past
information stored in the
memory.

• External information search is

the process of seeking
information in the outside
environment.
STEP 3 : Evaluation of
Alternatives

• One way to begin narrowing the

number of choices in the evoked
set is to pick a product attribute
and then exclude all products in
the set that don’t have that
attribute.

• Another way to narrow the

number of choices is to use cutoffs.
Cutoffs are either minimum or
maximum levels of an attribute
that an alternative must pass to be
considered.
STEP 4 : Purchase

To Buy or Not to Buy ultimately, the consumer has to decide

whether to buy or not buy. Specifically, consumers must decide:

✔ Whether to buy
✔ When to buy
✔ What to buy (product type and brand)
✔ Where to buy (type of retailer, specific retailer, online or
in-store)
✔ How to pay
STEP 5 : Postpurchase
behaviour
When buying products, consumers
expect certain outcomes from the
purchase. How well these
expectations are met determines
whether the consumer is satisfied
or dissatisfied with the purchase.

When consumer recognize

inconsistency between their values
or opinions and their behavior,
they tend to feel an inner tension
called cognitive dissonance.
LO 4 : Types of consumer buying decisions

Routine Limited Extensive

Response Decision Decision
Behavior Making Making
LO 4 : Types of consumer buying decisions
Routine response behavior
The type of decision making exhibited by consumers buying frequently
purchased, low-cost goods and services; requires little search and decision time.

Limited decision making

The type of decision making that requires a moderate amount of time for
gathering information and deliberating about an unfamiliar brand in a familiar
product category.

Extensive decision making

The most complex type of consumer decision making, used when buying an
unfamiliar, expensive product or an infrequently bought item; requires use of
several criteria for evaluating options and much time for seeking information.