Download Consumer Behaviour

Consumer Behaviour
Concepts and
Applications
Not a simple picture !!!
To consider
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influences on consumer buying processes
problem-solving: pleasure seeking (irrational) vs.
rational views of buying
how we construe our buying/spending: perceptions,
attitudes & motivations
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categories of influence:
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pre-exchange, in the exchange itself & post exchange
environmental and cultural
individual and reference groups
Insights from learning theory
B2C and B2B organisational buying behaviours
marketing strategy & communications design
implications
1
Obviously
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Individual customers & organisational
customers buy goods & services
They are stimulated & prompted to buy
Marketers
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are interested in their decision behaviour
try to stimulate & influence this behaviour to
get better responses from the customer
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Marketers, actors & roles in buying
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marketing concept …"satisfy
consumer needs for profit/value"
so....
to segment, target & construct our
marketing mix & promotions well,
we must understand consumers &
their behaviour
 we can study actual purchases
then find ways to encourage them
to consider buying & then buy !!!
 buying may involve
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many steps
many people
the actual purchase is but one part
of the process
Who is important in the buying
decision?
What do they buy & how much ?
When do they buy & where ?
How do they buy?
What choice criteria do they use?
How do they respond to the efforts
we use?
Actors and roles
the same person can play
multiple roles
•consumers
•opinion formers
•marketers
•public policy actors
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Buyer Behaviour Model
Needs - wants, stimuli
Product, price, place,
promotion etc
Environmental (PEST)
factors
Buyer
responses
buyer’s
black
box
Choices of
•product
•brand
•dealer
•timing
•price
Buy more, less,
stay loyal etc
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• internal search (memory)
• external search (personal
sources, commercial sources
• third party reports (e.g. Which)
• personal observation/testing
How we buy (a rational view)
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functional
emotional ?
current vs desired situation
relative importance
need inhibitors
Window-shop – simmering interests
Shape desire, want
Evoked
set
Information search
Need recognition,
problem-awareness
Evaluate alternatives (against evoked set)
Information search
Buy
Evaluate alternatives
• are they aware of need ?
• can we mediate need inhibitors?
• can we stimulate awareness &
action
Post-purchase
evaluation
Buy
Post-purchase
evaluation
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Operant (or instrumental) conditioning
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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”
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Responses are reinforced, punished,
or extinguished 1
Reinforcement is …
 a consequence that  more frequent behaviour
Positive reinforcement
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a behaviour (response)  a favourable stimulus
(commonly pleasant)  increasing the frequency
of the behaviour
Negative reinforcement
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a behaviour (response)  lessening of an aversive
stimulus (commonly unpleasant) increasing that
behaviours frequency
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Responses are reinforced, punished,
or extinguished 2
Punishment
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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
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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
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Roles in the decision process
after Blackwell/Miniard/Engel, 2007 Consumer Behaviour, 10th Ed, Thomson
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each role can be acted by parent, children or other
members of the buying centre.
Who is
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initiator
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influencer
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decider
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buyer
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user
Each actor may display
multiple roles when buying
•a toy purchase
•a house
•a washing machine
•an armoured vehicle
•a sound system
•computer software
Influencing Strategies
1. expert influencing
2. subtle (incl. use of
rewards
3. emotional
4. combination
Infants, teenagers, working
women, husbands?
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What is the Relative Influence of Husbands
vs. Wives in Decision Making?
How is this changing?
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Influences on Consumer
Behaviour
Cultural
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broadest & deepest influence
cultures & subculture
social classes
Social
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Family
Social roles and status (multiple)
Reference groups
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Membership - primary vs. secondary
Aspirational vs. dissociative
Personal
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Age
Life cycle stage
Occupation
Economic circumstances
Lifestyle
Personality
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Self-concept
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Psychological
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Motivation
Perception
Learning
Beliefs
Attitudes
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Personal influences
Perception
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"mind" processes - selection, association,
organisation & interpretation. We
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only note some things (selective) i.e. what
grabs attention + distortion & retention
associate & categorise information into
meaningful wholes
interpret/make inferences
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good news or bad news first ?
accentuate the positives, eliminate the
negatives
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classical & operant conditioning
cognitive learning
by rote
vicarious (from others)
reasoning
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relatively consistent
evaluations, feelings,
tendencies towards something
Three components
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Learning
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real knowledge, opinion or
faith
Our attitudes
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information framing e.g.
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what motivates us
what we believe in
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cognitive (belief),
affective (feeling),
conative (behavioural)
personality
self-concept, lifestyle
& life cycle stages
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Perceptual, conceptual & related capacities
Perceptual - Sensing, measuring, judging
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Colour, sound, texture, smell. Interpreting smells, noises, signals
Monitoring sounds, vibrations, data, information
Frames of reference – what is your “vantage point”
Conceptual
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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:
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need for achievement, power, affiliation
sensitivity & empathy, identification & association, objective-subjective,
attitudes & values
Physical
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Storage, access, processing & transmission capacity, security, privacy
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Concepts in socio-cultural
examination
Culture
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a socially constructed complex of
values, ideas, attitudes, institutions,
meanings & symbols that shape
and are shaped by behaviour &
maybe passed on thru generations
Social Class
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relatively permanent divisions in a
society into which individuals or
families may be categorized
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based on perceived status &
prestige.
Sub- or Micro-culture
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a sub-group with its own
distinguishing modes of behaviour.
Role
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Behaviours, rights, duties expected
of an individual in a group by other
members
Reference groups
 structures & standards
influence behaviour.
Membership
 groups we actually belong to
Aspirational
 We wish to associate with
this group.
Disassociative
 We do not want to be
identified with this group.
Power studies
 how roles, groups & norms
influence individual
behaviour.
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Opinion formers
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Trendsetters
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influential people in a group who
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The Media
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purchase new products early
serve as information sources for others
TV, newspapers, magazines, Internet communication
commentators
the media need "stories"
Sellers & Marketers
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"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
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Personality & self concept
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extroversion-introversion
self-confidence, dominance
sociability
autonomy
defensiveness
adaptability
aggressiveness
Towards a brand personality:
“the brand & Me”
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sincerity
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excitement
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Branston baked beans?
Chicken jalfrazi ?
Top Gear ?
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Yesterday Channel
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reliable, intelligent, successful
sophistication
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higher class, charming
ruggedness
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daring, spirited, imaginative, up-todate
competence
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Levi Jeans ?
Swaferga ?
down to earth, honest, wholesome,
cheerful
outdoors, tough
e.g. Take care of pennies & £ will
take care of themselves
Lands End?
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Components of Attitude
Cognitive
(knowledge & beliefs
about a subject/object)
Affective
(overall feelings or
emotive reactions)
A person’s enduring
favourable or
unfavourable evaluation
of some object or idea
Attitude
(overall orientation
toward object or idea)
Behavioural
(how we tend to behave)
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Choice criteria
Technical
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attributes & variables a
reliability
durability
consumer uses when
performance
evaluating products &
style/looks
services
comfort
different members of
delivery
convenience
buying centre obviously
taste
may use different criteria
Economic
e.g. a teenager or a WAG
price, VfM
(self-image), a parent (for
running costs
residual
the baby), an OAP (price
value
or risk reduction)
Social
status
social
belonging
fashion
Personal
self-image
risk reduction
morals
emotion
life cycle
costs
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Consumer Problem-Solving
Categories
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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 choice
alternatives + examine
solutions
alternatives are
differentiated &
numerous
high deliberation &
involvement time
personally relevant
(risks)
 high potential for
cognitive dissonance
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self-image
risks
social
factors
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Cigarette advertising
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Cognitive dissonance
(after Festinger)
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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.
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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.
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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).
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Smoking
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we know that cigarettes cause lung cancer
we want to live a long and healthy life
we can
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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
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Upper Uppers
Lower Uppers
Upper Middles
Middle Class
Working Class
Upper Lowers
Lower Lowers
Chavs
• slang (UK) for a subcultural stereotype
• Aspirants who want to be in a "class"
above their actual class.
• spend on fashion for upward social
mobility.
• fixated on fashion 'designer' clothing,
handbags, gold jewelery e.g.
Burberry,
• trying to adopt lifestyle of admired,
referent class but not seen as
successful.
• considered to be in poor taste,
ignorant,
• labelled as "trying too hard, not worthy
enough".
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VALS2 psychographic groups
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Actualizers
Fulfilleds
Achievers
Experiencers
Believers
Strivers
Makers
Strugglers
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How do you see
each category
behaving as
buyers?
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Forrester Technographics
customer segments by motivation, desire & ability to
invest in technology
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Start here
Explain the customer behaviour appeals being
used by … each of the following …
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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/
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 http://www.homebase.co.uk
Explain the following in terms of consumer
behaviour debate
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fitting rooms
return of goods policies e.g. B&Q, Next on-line
2-for-1, 20% bigger
interest free for
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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)
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Post-purchase evaluation
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We want customer to have positive experiences
from purchase but they may experience
Cognitive Dissonance
Pre-purchase, purchase or post-purchase
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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
discrepancy between expectation & experience
reflect on opportunity cost and lost - difficult
decision, many alternatives
irrevocable decision
neurotic customer (impulse buy)
post-purchase remorse
What can
marketer &
seller do?
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Post-purchase Behaviour
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expectations are compared to performance
post-purchase satisfaction influences future
behaviour
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future purchasing behaviour
word-of-mouth communication
Marketers try to influence post-purchase
behaviour. How ?
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Post-purchase communication to reduce dissonance,
returns & order cancellations
Talk with customers:
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discover new uses for existing products
etc
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Evaluate Harley-Davidson Consumer Behaviour
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Hells Angels ? Burly,
leathers, bikers, rebels
New breed:
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older
more affluent
better educated
rubbies (rich urbans)
Showrooms + sales
approaches
Customer types from HD
research
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adventure-loving traditionalists
sensitive pragmatists
stylish status seekers
laid-back campers
classy capitalists
cool-headed loners
cocky misfits
all loved their Harleys because
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independence, freedom, power
more than a machine – part of
self-expression
classic look, throaty sound
American legend
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Scope of B2B Market
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Agriculture
Mining
Construction
Manufacturing
Transport
Wholesale & retail
Finance, insurance,
property
Government
Non-profit & voluntary
organisations
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different needs & buying
patterns e.g. medical from
rubber gloves vs body scanner
buy raw materials/inputs to
make other goods/services e.g.
sugar & flavouring as inputs for
Pepsi
sell on to other business users
or consumers e.g. Argos
use purchases to conduct
business e.g. stationery, legal
services, IT/systems
consultancy, marketing services
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Purchasing decisions in B2B Markets
Buying is less frequent.
new task buy
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buying decision not been
made before
modified rebuy
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bought before but this time
change spec. or new supplier
straight rebuy
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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
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Buying often a group process.
Who is in the buying group?
Users
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use the product e.g. trucks
Influencers (direct or indirect)
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Tech know-how, budget etc
Deciders
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Make the actual decision:
purchasing officer, manager,
product/service user
Gatekeepers
 Control flow of information
Buyers
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Select suppliers & negotiate
terms
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Choice criteria
Organisational buying
Can we assume that B2B
buying motives are rational,
Need recognition,
methodical
& objective
problem-awareness
quantity
continuity
quality
price
financing
life cycle costs
prody
maintenance
residual values
risks
politics
personal
Personal factors incl:
Determine specification &
self advancementquantity
Performance feedback &
relationships,
evaluation
competition
legal
steps
Motivators
include
Search for sources,
financing
Integrate partner
Cost & profit-related benefits
research & approve
systems
JIT
Incentives &
promotional support
logistics
conflict
Supply alliances
for expansion
& proposals & analyse
Receive
Finalise contract &
synergy + outsourcing
share costs, improve
order routines
productivity etc
Evaluate, negotiate,
select
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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
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Customer relationship management (CRM)
maximise customer retention & share of customer’s business
past behaviour is important
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The future involves
increased WWW use – direct marketing & personalisation
costs of servicing unprofitable customers
focus on better servicing of other customers
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39