Chapter 3

Theoretical Framework
Theoretical Framework toward Consumer Buying Behaviour:-

Definition of Consumer Buying Behaviour:-

Kotler and Keller (2011) state that consumer buying behaviour is the study of the
ways of buying and disposing of goods, services, ideas or experiences by the individuals,
groups and organizations in order to satisfy their needs and wants.

Kotler and Keller (2011) highlight the importance of understanding consumer buying
behaviour and the ways how the customers choose their products and services can be
extremely important for manufacturers as well as service providers as this provides them with
competitive advantage over its competitors in several aspects. For example, they may use the
knowledge obtained through studying the consumer buying behaviour to set their strategies
towards offering the right products and services to the right audience of customers reflecting
their needs and wants effectively.

In addition to efforts of better understanding the consumers’ buying behaviour,

companies also engage in advertising and promotion activities to influence the consumers’
purchasing decision. However, when they are engaging in such types of activities, they need
to consider other external factors such as the overall economic conditions of the country,
politics, technology and ethnic culture all of which are beyond the control of both the
company and consumer Lancaster et al (2002).
Importance of Consumer Buying Behaviour:-

1. To design production policies,

2. Know the effect of price on buying,
3. Exploit the market opportunities,
4. Design marketing mix,
5. Implement STP strategies,
6. Helps in understanding diversified preference,
7. Understanding of various roles played by consumer,
8. Results in consumer satisfaction.

 To design production policies

This is the first importance of consumer behaviour and it means that all the production
policies have designed taking into consideration the consumer preference so that product
can be successful in the market.

In every business, the main motive is to enhance the production and as well as sales of
the company and to do all these, any company or business has to win the trust of its
customers and studying about their tastes, likings, and preferences.

 Know the effect of price on buying

This is the second consumer behaviour importance and it means that consumer behaviour
can help in understanding the effect of price on buying. Whenever the price is moderate on
cheap more and more customer will buy the product.

After the time of production, there comes a time in which the company has to decide what
the price of our product will be because it helps to divide the categories of the customer and
also helps to attain more sales.
  Exploit the market opportunities

This is the third importance or significance of consumer behaviour and it means that the
change in consumer preference can be a good opportunity for the mark to bring something
which cannot as a revaluation in the market. For Example , When palm pops introduced in
the market, it was successful due to the stylish and sleek design.

 Design marketing mix-

This is the fourth importance of consumer behaviour and it means that consumer
behaviour is very much vital in designing and approaching marketing mix to be chosen
(product, price, place, and promotion).

The product should be valuable, the price should be moderate, place distribution should
be intensive and an appropriate. Promotion mechanism should be there.

 Implement STP Strategies-

This is the fifth importance of consumer behaviour and it means that the segmentation,
targeting, and positioning strategies are implemented by understanding the behaviour of
consumers towards the various brands.

The products are targeted grouping the customers having common taste and preference
and finally positioned in the market. Thus, building a positive image of the product of a
company related to the competitors and as well as help to beat them also.

 Helps in understanding diversified preferences

This is the sixth importance of consumer behaviour and it means that the consumer
preferences are diversified in nature and their keep on changing over a particular period of
time. Nowadays consumers are more value conscious and they want to extract the maximum
benefits from a particular product of a brand.
  Understanding of various roles played by consumers-

This is the seventh importance and it means that there are various roles played by the
consumers in the consumer decision-making process. These roles are initiators, influencers,
decider, users, buyers, and gatekeeper.

 Results in customers satisfaction-

This is the eighth importance of consumer behaviour and it means when the designed
product is matching the expectations of the customer than they result in customer
satisfaction. In case the product is exceeding the expectations of the customer then its result
in customer delight.

In an organization, there are various departments like purchase, personnel, finance,

production, marketing and all departments have a motive to satisfy the customer needs and
wants.
The Consumer Buying Behaviour Process:-

• Problem recognition
1

• Information search
2

• Alternatives evaluation
3

• Purchase decision
4

• Post-purchase evaluation
5

 Problem recognition

The first step of the consumer decision-making process is recognizing the need for a
service or product. Need recognition, whether prompted internally or externally, results in the
same response: a want. Once consumers recognize a want, they need to gather information to
understand how they can fulfill that want, which leads to step two.

Example: Winter is coming. This particular customer has several light jackets, but she’ll
need a heavy-duty winter coat if she’s going to survive the snow and lower temperatures.

 Information search

When researching their options, consumers again rely on internal and external factors, as
well as past interactions with a product or brand, both positive and negative. In the
information stage, they may browse through options at a physical location or consult online
resources, such as Google or customer reviews.
 Example: The customer searches “women’s winter coats” on Google to see what options
are out there. When she sees someone with a cute coat, she asks them where they bought it
and what they think of that brand.

 Alternatives evaluation

At this point in the consumer decision-making process, prospective buyers have

developed criteria for what they want in a product. Now they weigh their prospective choices
against comparable alternatives.

Example: The customer compares a few brands that she likes. She knows that she wants a
brightly colored coat that will complement the rest of her wardrobe, and though she would
rather spend less money, she also wants to find a coat made from sustainable materials.

 Purchase decision

This is the moment the consumer has been waiting for: the purchase. Once they have
gathered all the facts, including feedback from previous customers, consumers should arrive
at a logical conclusion on the product or service to purchase.

Example: The customer finds a pink winter coat that’s on sale for 20% off. After
confirming that the brand uses sustainable materials and asking friends for their feedback, she
orders the coat online.

 Post-purchase evaluation

This part of the consumer decision-making process involves reflection from both the
consumer and the seller. As a seller, you should try to gauge the following:

 Did the purchase meet the need the consumer identified?

 Is the customer happy with the purchase?
 How can you continue to engage with this customer?

Remember, it’s your job to ensure your customer continues to have a positive experience
with your product. Post-purchase engagement could include follow-up emails, discount
coupons, and newsletters to entice the customer to make an additional purchase. You want to
gain life-long customers, and in an age where anyone can leave an online review, it’s more
important than ever to keep customers happy.

Factor Affecting Consumer Buying Behaviour:-

Psychological Social Cultural Personal Economic

Factors Factors Factors Factors Factors

i. Personal
i. Motivation i. Family i. Culture i. Age
Income

ii. Reference ii. Family

ii. Perception ii. Subculture ii. Income
Groups Income

iii. Roles and iii. Social iii. iii. Consumer

iii. Learning
status Class Occupation Credit

iv. Attitudes iv. Liquid

iv. Lifestyle
and Beliefs Assets

v. Savings

1. Psychological Factors:-

Human psychology is a major determinant of consumer behaviour. These factors are

difficult to measure but are powerful enough to influence a buying decision.

i. Motivation:-

When a person is motivated enough, it influences the buying behaviour of the person. A
person has many needs such as social needs, basic needs, security needs, esteem needs, and
self-actualization needs. Out of all these needs, the basic needs and security needs take a
position above all other needs. Hence basic needs and security needs have the power to
motivate a consumer to buy products and services.
ii. Perception:-

Consumer perception is a major factor that influences consumer behaviour. Customer

perception is a process where a customer collects information about a product and interprets
the information to make a meaningful image of a particular product.

When a customer sees advertisements, promotions, customer reviews, social media

feedback, etc. relating to a product, they develop an impression about the product. Hence
consumer perception becomes a great influence on the buying decision of consumers.

iii. Learning:-

When a person buys a product, he/she gets to learn something more about the product.
Learning comes over a period of time through experience. A consumer’s learning depends on
skills and knowledge. While skill can be gained through practice, knowledge can be acquired
only through experience.

Learning can be either conditional or cognitive. In conditional learning the consumer is

exposed to a situation repeatedly, thereby making a consumer to develop a response towards
it.

Whereas in cognitive learning, the consumer will apply his knowledge and skills to find
satisfaction and a solution from the product that he buys.

iv. Attitudes and Beliefs:-

Consumers have certain attitudes and beliefs which influence the buying decisions of a
consumer. Based on this attitude, the consumer behaves in a particular way towards a
product. This attitude plays a significant role in defining the brand image of a product. Hence,
marketers try hard to understand the attitude of a consumer to design their marketing
campaigns.
2. Social Factors:-

Humans are social beings and they live around many people who influence their buying
behaviour. Humans try to imitate other humans and also wish to be socially accepted in the
society. Hence their buying behaviour is influenced by other people around them. These
factors are considered as social factors. Some of the social factors are:

i. Family:-

Family plays a significant role in shaping the buying behavior of a person. A person
develops preferences from his childhood by watching family buy products and continues to
buy the same products even when they grow up.

ii. Reference Groups:-

A reference group is a group of people with whom a person associates himself. Generally,
all the people in the reference group have common buying behaviour and influence each
other.

iii. Roles and status:-

A person is influenced by the role that he holds in the society. If a person is in a high
position, his buying behaviour will be influenced largely by his status. A person who is a
Chief Executive Officer in a company will buy according to his status while a staff or an
employee of the same company will have different buying pattern.

3. Cultural factors:-

A group of people is associated with a set of values and ideologies that belong to a
particular community. When a person comes from a particular community, his/her behaviour
is highly influenced by the culture relating to that particular community. Some of the cultural
factors are:
i. Culture:-

Cultural Factors have a strong influence on consumer buying behaviour. Cultural Factors
include the basic values, needs, wants, preferences, perceptions, and behaviours that are
observed and learned by a consumer from their near family members and other important
people around them.

ii. Subculture:-

Within a cultural group, there exists many subcultures. These subcultural groups share the
same set of beliefs and values. Subcultures can consist of people from different religion,
caste, geographies and nationalities. These subcultures by itself form a customer segment.

iii. Social Class:-

Each and every society across the globe has the form of social class. The social class is
not just determined by the income, but also other factors such as the occupation, family
background, education and residence location. Social class is important to predict the
consumer behaviour.

4. Personal Factors:-

Factors that are personal to the consumers influence their buying behaviour. These
personal factors differ from person to person, thereby producing different perceptions and
consumer behaviour.

i. Age:-

Age is a major factor that influences buying behaviour. The buying choices of youth
differ from that of middle-aged people. Elderly people have a totally different buying
behaviour. Teenagers will be more interested in buying colorful clothes and beauty products.
Middle-aged are focused on house, property and vehicle for the family.
ii. Income:-

Income has the ability to influence the buying behaviour of a person. Higher income gives
higher purchasing power to consumers. When a consumer has higher disposable income, it
gives more opportunity for the consumer to spend on luxurious products. Whereas low-
income or middle-income group consumers spend most of their income on basic needs such
as groceries and clothes.

iii. Occupation:-

Occupation of a consumer influences the buying behaviour. A person tends to buy things
that are appropriate to this/her profession. For example, a doctor would buy clothes according
to this profession while a professor will have different buying pattern.

iv. Lifestyle:-

Lifestyle is an attitude, and a way in which an individual stay in the society. The buying
behaviour is highly influenced by the lifestyle of a consumer. For example when a consumer
leads a healthy lifestyle, then the products he buys will relate to healthy alternatives to junk
food.

5. Economic Factors:-

The consumer buying habits and decisions greatly depend on the economic situation of a
country or a market. When a nation is prosperous, the economy is strong, which leads to the
greater money supply in the market and higher purchasing power for consumers. When
consumers experience a positive economic environment, they are more confident to spend on
buying products.

Whereas, a weak economy reflects a struggling market that is impacted by

unemployment and lower purchasing power.

Economic factors bear a significant influence on the buying decision of a consumer.

Some of the important economic factors are:
i. Personal Income:-

When a person has a higher disposable income, the purchasing power increases
simultaneously. Disposable income refers to the money that is left after spending towards the
basic needs of a person.

When there is an increase in disposable income, it leads to higher expenditure on various

items. But when the disposable income reduces, parallelly the spending on multiple items
also reduced.

ii. Family Income:-

Family income is the total income from all the members of a family. When more people
are earning in the family, there is more income available for shopping basic needs and
luxuries. Higher family income influences the people in the family to buy more. When there
is a surplus income available for the family, the tendency is to buy more luxury items which
otherwise a person might not have been able to buy.

iii. Consumer Credit:-

When a consumer is offered easy credit to purchase goods, it promotes higher spending.
Sellers are making it easy for the consumers to avail credit in the form of credit cards, easy
instalments, bank loans, hire purchase, and many such other credit options. When there is
higher credit available to consumers, the purchase of comfort and luxury items increases.

iv. Liquid Assets:-

Consumers who have liquid assets tend to spend more on comfort and luxuries. Liquid
assets are those assets, which can be converted into cash very easily. Cash in hand, bank
savings and securities are some examples of liquid assets. When a consumer has higher liquid
assets, it gives him more confidence to buy luxury goods.
v. Savings:-

A consumer is highly influenced by the amount of savings he/she wishes to set aside from
his income. If a consumer decided to save more, then his expenditure on buying reduces.
Whereas if a consumer is interested in saving more, then most of his income will go
towards buying products.
Types of Consumer Buying Behavior:-

1. Complex buying behaviour:-

Complex buying behaviour is encountered particularly when consumers are buying an

expensive product. In this infrequent transaction, consumers are highly involved in the
purchase decision. Consumers will research thoroughly before committing to invest.

Consumer behaves very differently when buying an expensive product or a product that is
unfamiliar to them. When the risk of buying a product is very high, a consumer consults
friends, family, and experts before making the decision.

For example, when a consumer is buying a car for the first time, it’s a big decision as it
involves high economic risk. There is a lot of thought on how it looks, how his friends and
family will react, how will his social status change after buying the car, and so on.
.

2. Dissonance-reducing buying behaviour:-

In dissonance-reducing buying behaviour, consumer involvement is very high. This might

be due to high prices and infrequent purchases. In addition, there is low availability of
choices with fewer significant differences among brands. In this type, a consumer buys a
product that is easily available.

Consumers will be forced to buy goods that do not have too many choices and therefore
consumers will be left with limited decision making. Based on the products available, time
limitations, or budget limitations, consumers buy certain products without a lot of research.

For example, a consumer who is looking for a new collapsible table that can be taken for
camping quickly decides on the product based on a few brands available. The main criteria
here will be the use and the feature of the collapsible table and the budget available to him.

3. Habitual buying behaviour:-

Habitual Buying Behaviour is depicted when a consumer has low involvement in a

purchase decision. In this case, the consumer is perceiving only a few significant differences
between brands.

When consumers are buying products that they use for their daily routine, they do not put
a lot of thought. They either buy their favorite brand or the one that they use regularly – or
the one available in the store or the one that costs the least.

For example, when a consumer buys a loaf of bread, he tends to buy the brand that he is
familiar with without actually putting in a lot of research and time. Many products fit into this
category. Everyday use products, such as salt, sugar, biscuits, toilet paper, and black pepper
all fit into this product category.
4. Variety seeking buying behaviour:-

In variety-seeking consumer behaviour, consumer involvement is low. There are

significant differences between brands. Here consumers often do a lot of brand switching.
The cost of switching products is low, and hence consumers might want to try out new
products just out of curiosity or boredom. Consumers here, generally buy different products
not because of dissatisfaction but mainly with an urge to seek variety.

For example, a consumer likes to buy a cookie and choose a brand without putting much
thought into it. Next time, the same consumer might choose a different brand out of a wish
for a different taste. Brand switching occurs often and without intention.