Consumer Buying Behavior

What makes people consumers?

 Topics
• Buying Behavior
• Characteristics Affecting Behavior
• Buying Decisions
• Buying Process
• New Product Adoption
• Organizational Buying behavior
 Questions
• Discuss the importance of consumer behavior.
• Understand consumer decision making and some
of the important influences on those decisions.
• Distinguish between low-involvement and high-
involvement consumer behavior.
• Construct a simple model of consumer buyer
behavior
• Differentiate individual buying behavior and
organizational buying behavior
• Think of a serious purchase you made
recently.

• What motivated you to buy

• Who influenced you
• What are the dilemmas faced by you
• How did you solve it
1-5
 Overall Model of Consumer Behavior
External Influences
Culture
Decision Process
Subculture
Demographics (Situations)
Social Status Problem Recognition
Reference Groups
Family Information
Marketing Activities Self- Search
Concept
and Alternative Evaluation
Internal Influences Lifestyle and Selection
Perception
Learning Outlet Selection
Memory and Purchase
Motives
Personality
Attitudes
Post purchase
Processes
 Consumer Decision-Making
Process
Need Recognition

Information Search
Cultural, Social,
Individual and
Psychological Evaluation
Factors of Alternatives
affect
all steps Purchase

Postpurchase
Behavior
 Need Recognition
Marketing helps • When a current product isn’t
consumers recognize performing properly
(or create) an imbalance
between present status • When the consumer is running
and preferred state out of an product

• When another product seems

superior to the one currently
Preferredused
State

Depends on how much discrepancy exists between the

actual state and the desired state
 The information search stage

An internal search involves the

scanning of one's memory to recall previous Personal sources
experiences or knowledge concerning (friends and family)
solutions to the problem-- often sufficient for
frequently purchased products.
Public sources (rating
services like Consumer
An external search may be necessary Reports)
when past experience or knowledge is
insufficient, the risk of making a wrong
purchase decision is high, and/or the cost of Marketer-dominated
gathering information is low. sources (advertising
or sales people)

The evoked set: a group of

brands from which the buyer can
choose
• go back to your past purchase– what were the
specific internal and external sources of
information that influenced your decision?

• how do you determine (and rate) the credibility of

these sources?

• what specific information influenced you?

 Buyer Roles
Other people often influence a consumers purchase decision.
The marketer needs to know which people are involved in the
buying decision and what role each person plays, so that
marketing strategies can also be aimed at these people.
(Kotler et al, 1994).

• Initiator: the person who first suggests or thinks of the idea of buying a
particular product or service.

• Influencer: a person whose views or advice carry weight in making the

final buying decision

• Decider: the person who ultimately makes the final buying decision or any
part of it

• Buyer: the person who makes the actual purchase

• User: the person who consumes the product or service

Think about your past purchase– who was in which role?

 Wife
Relative influence of husbands & wives
Dominant
Child clothing Women’s
clothing
Final Information groceries
Pots & pans
decision search
NonRx
lamps
Toys/games
furniture
luggage
carpet
Paint wallpaper
refrigerator
vacations
Men’s leisure clothing
Joint Men’s business clothing
stereo
TV sets
camera
Financial planning

Family car Sport equipment

hardware

Lawn mower

Husband
Extent of role specialization Dominant

100 75 50 25 0
 Decision Process continuum

complexity

high low

Degree of complexity

Extended Habitual
problem decision
solving making
 Consumer decision making
varies with the level of involvement in the
purchasing decision

• Extensive: problem solving occurs when

buyers purchase more expensive, less
frequently purchased products in an
unfamiliar product category requiring
information search & evaluation; may
experience cognitive dissonance.

• Limited: problem solving occurs when buyers are

confronted with an unfamiliar brand in a familiar product Increase in
category Consumer
evaluation
• Routine: response behavior occurs processes
when buyers purchase low cost, low risk, brand loyal,
frequently purchased, low personal identification or
relevance, items with which they are familiar.
 Types of consumer involvement
and decision making

Routine Limited Extensive

Involvement Short Low to High

moderate
Time Low Short to Long
moderate
Cost Short Low to High
moderate
Information Internal only Mostly Internal &
Search internal external
Number of one few many
alternatives
 Factors affecting
Consumer involvement

• Previous experience: low level involvement

• Interest: high involvement

• Perceived risk of negative consequences: high involvement

• Situation: low to high due to risk

• Social visibility: involvement increases with product visibility

So…
• Offer extensive information on high involvement products
• In-store promotion & placement is important for low involvement products
• Linking low-involvement product to high-involvement issue can increase sales
 Four Types of Buying Behavior
High Involvement Low Involvement
Significant Differences Complex buying Variety-seeking
between Brands behavior buying behavior

Few Differences between Dissonance-reducing Habitual buying

Brands buying behavior behavior
 Low vs. High Involvement
Low Involvement
• Problem Recognition
– Routine
• Search
– few sources (ad); passive
• Evaluation and Decision
– few attributes like price and
awareness; peripheral cues
– decision at point of purchase
– acceptable solution
– often, liking after trial
High Involvement
• Problem Recognition
– Planning
• Search
– many sources; active
• Evaluation and Decision
– many attributes (peripheral cues
not important)
– decision before point of purchase
– optimal solution
– liking before trial
 Marketing Implications for Low
Involvement Purchases
• Not too many attributes used in decision. Often only
price used.
– marketing implication??
• Decision often made in the store (not before)
– marketing implications?
• Will not actively search for brands or visit many
stores
– Distribution implication?
• Liking for brand may only come after product trial
– So if you want to make them like the product?
 Marketing Implications Contd...
Advertising
• Advertising should focus on key points
• High repetition
• TV advertising
– captive audience
– extended coverage
• Use of likable peripheral cues
– visual cues; pleasant music
 Alternative Evaluation

• Heuristics-Mental Rule of thumbs that are

used to simplify the decision making
process.
• think of an important purchasing decision
you have made

• what are some of the thoughts you have had

following your purchase? Any regrets?

• what has influenced those thoughts?

• how have you dealt with the discomfort?

• how has the company anticipated or dealt with

your discomfort?
 Postpurchase Behavior

?
Cognitive Dissonance

Can minimize through:

Effective Communication
Follow-up
Did I make a good decision? Guarantees
Warranties
Did I buy the right product? Underpromise &
overdeliver
Did I get a good value?
 Cognitive Dissonance
• psychological discomfort caused by inconsistencies
among a person’s beliefs, attitudes, and actions
• varies in intensity based on importance of issue and
degree of inconsistency
• induces a “drive state” to avoid or reduce dissonance
by changing beliefs, attitudes, or behaviors and
thereby restore consistency

Applications:

Tendency to avoid information can be countered by eliciting interest,

norm of fairness, or perceive usefulness of information

Post-decision “buyer’s remorse” may be increased by importance or difficulty

or irreversibility of decision

Counter-attitudinal action, freely chosen with little incentive or

justification, leads to attitude change (e.g., new product at special low
price)