Models and concepts of cosnumer buying behaviour

Published Date: 23 Mar 2015

The aspect of this chapter provides theoretical study of the topic. The literature describes theory, analysis, process, model of basic concept of consumer buying behaviour. The aim of this chapter analysing how consumer buying behaviour strategy gives platform to the company to develop success factors and achieve their all marketing targets specially before launching a new product and its success. The scenario of this chapter describes topic clearly and give better understanding to respond research question.

2.2 - Literature Review

An individual or company purchases goods or use services that's called buying and condition of buying by which buyer convinces to take decision to get something is called consumer behaviour.

The consumer decision procedure to buy any product or use services is related with their approach, consumption, observation, awareness regarding the products or services. They get this approach or awareness through companies marketing strategies. Consumer buying behaviour strategy represents any company's marketing strategy which is made according to their consumer needs, taste and their behaviour of purchasing goods or services.

Both sales promotion strategy and its interaction effects with product appeal are found to have significant influences on reminder impulse buying. Specifically, an instant reward promotion promotes stronger reminder impulse buying than a delayed-reward Promotion. Furthermore, both a utilitarian product appeal with a price discount promotion And a hedonic product appeal with a premium promotion can encourage greater reminder Impulse buying. (Shu-Ling Liao, 2009)

Stores are the place where buyers buy products whether it's planned or unplanned purchase. These stores sell hundreds and thousands of products daily and consumers are consuming these products at the cost of their income. It only dependents on the income of the person, that how much and how many times he or she visits shopping stores to buy products. It is usually seen that buyers purchase products which they have not planned and this phenomenon of unplanned purchasing is termed as impulse An Empirical Study of Consumer Impulse Buying Behaviour in Local Markets 523 buying (Kashif-Ur-Rehman et al, 2009 )

Consumer buying behaviour strategy supports any firm to manufacture products according to consumer requirement so that consumer will take decision regarding this new product to buy or use services. Any Company's marketing strategy plays vital role for its expansion or profit as well as persuasion of consumer to buy its product.

Buyer gets this attraction of goods through company's marketing strategy which fulfils all area of consumer buying behaviour. Consumer could be a person, company or any institute which purchase or use services or goods in order to fulfil their requirements whereas the behaviour of buying that is need of product or services which gets support from subconscious of buyer. Normally this requirement comes from product need or often comes from brand quality and company's name which is possibly a reputable company but most probably it belongs to company's great marketing policy that is made according to consumer demand, taste and their behaviour of purchasing services and goods.

2.3 - Consumer buying behaviour

An individual or company purchases goods or use services that's called buying and condition of buying by which buyer convinces to take decision to get something is called consumer behaviour. (Geoff Lancaster, 2008)

(Source: Sykronix, 2009)

Consumer behaviour is the activities people undertake when obtaining, consuming and disposing of products and services. (Black well, Miniard and Engel, 2001)

The study of the processes involved when individuals and groups select purchase, use or dispose of the products, services, ideas or experiences to satisfy needs and desires. (Michael Solomon, 1996)

The organizational consumer and personal consumer, these are two types of entities of consumer which make Consumer behaviour. (Sarwar et al, 2001). Goods and services which are bought by the personal consumer, they use for their own use like gift for a friend and household usage. In each of these contexts, individuals who buy the product for final use they are called users. (M. Bichler et al. 2008). Whereas the second type of consumer is called organizational consumer which consist of government departments (local, state and national) and institutions (e.g. schools, hospitals and prisons) these consumer must buy different type of equipments, products and services to make their company profitable. (Schiff man & et al., 2006)

Companies make plan to implement their marketing strategy to judge the consumer behaviour or perception regarding products or goods like what consumer sees in product its price, quality, ingredients and accessibility? Consumer buying behaviour strategy supports any firm to manufacture products according to consumer requirement so that consumer will take decision regarding this new product to buy or use services. Any Company's marketing strategy plays vital role for its expansion or profit as well as persuasion of consumer to buy its product. Buyer gets this attraction of goods through company's marketing strategy which fulfils all area of consumer buying behaviour.

Marketers are able to influence this process at numerous point- they can influence thought processes by providing relevant information at the right time, they can influence emotion by using appealing communication and imagery and they can provide suitable environmental stimuli ( for example pleasant shops or user-friendly websites) to stimulate purchase. On a more subtle level, marketers can even encourage greater consumption of the product-good marketing does not stop at the point of sale.

2.6 - Consumer Buying Behaviour in Context

The fundamental basis for marketing is that the customer or consumer should be at the centre of everything the firm does. While there may be some dissent about whether the marketing concept always applies, for marketers customers are the key concern. This means that an understanding of how and why people make purchasing decisions is crucial to formulating marketing plan.

In the first instance purchasing, behaviour relates strongly to segmenting the market. The whole purpose of segmentation is to determine which potential buyers are most likely to behave favourably towards the company and its products: most segmentation methods bear at least some relationship to consumer behaviour issues.

First, geographic segmentation breaks the market down according to the location I which the potential customers live. Where someone chooses to live, or is forced to lived, is either an example of decision making or dictates decision making. Someone living in a cold climate is compelled to buy warm clothing, heating equipment, insulation products for the home and so forth.

Psychographic segmentation and behavioural segmentation clearly relate very directly to consumer characteristics and behaviour. Demographic segmentation is based on consumers wealth, age, gender and education levels among other things each of which is relate directly to purchasing decisions.

2.4 - Viewpoint of Study

From the viewpoint of academic research, Consumer behaviour might be considered as the field of the study which concentrates on consumption activities. In the past, the study of consumer behaviour has mainly focused on why people buy. More recently, the focus has moved to include looking at consumption behaviour - in other words how and why people consume.

Studying of consumer buying behaviour is clearly of interest to marketers. But it is an interesting study in itself, even for non - marketers, because we are all consumers. Ultimately consumers hold all the power in the business world- for example Sam Walton who is founder of Wal-Mart, famously said "There is only one boss - The customer'', and he can fire everyone in the company, from the chairman on down, simply by spending his money somewhere else. Walton always regarded himself as an agent for his customers, finding them the best value for money; this simple philosophy moved Wal-Mart from one small store in Arkansas to the world's largest retailer within Walton's lifetime.

2.5 - Consumer Buying Behaviour in action

The concept of consumer buying behaviour strategy is a very powerful tool to predict consumer behaviour and make some changes in marketing strategies of any organization for their expansion or spread in masses. Sometimes companies have to change their marketing strategy because of different aspect of consumers' desires which relate consumers' cultures, attitudes, perceptions, groups and roles in the society. Some organizations have taken advantages of this concept which are as follows:

Trading in old cars for new ones was reputedly invented by General Motors dealers in the 1930s as a way of stimulating the market for new cars. The second hand cars that were traded in could be sold to people who could not afford a new car, and so the number of people who were driving could be increased dramatically. Trade -in also solved the problem of what to do with a car once it was a few years old and perhaps not looking as new as it once had.

In 1995 Mrs Katherine Freund of Portland, Oregon had an idea for extending the trade-in concept and at the same time improving road safety. Her son was run over by an elderly driver in 1988 (the son recovered fully) and it occurred to Katherine that there were many elderly people on the road who really shouldn't be driving but who felt that they had little choice in a world ( and especially in a country ) dominated by cars. So Katherine instituted a scheme whereby senior - citizen drivers can trade in their cars in exchange for rides. The elderly people are credited with rides, but the cars are operated by volunteers supplemented by new paid drivers, and the scheme is self-financing. The rides are very much cheaper than using taxis so the credit in the scheme lasts a long time and the service runs 24 hours a day, seven days a week.

One of the main advantages of the scheme is that it allows elderly people to remain part of the community and continue to do everything they used to do when they were still driving. The other advantage is that the roads are much safer- the over 75 age group has come accidents than any other group except teenagers.

This approach to trade-in has created an entirely new opportunity for older drivers: at the same time, it maintains their mobility and makes life safer for others. As a way of disposing of no longer needed cars it is second to none!

Recent research found that today's teens see portable cassette players as dinosaurs, Sony's advertising agency followed 125 teens to see how they use products I their day-to-day lives. Now, even portable CD players seem obsolete and not cool with the consumer movement to removable memory sticks instead of a CD player that can work with MP3 files. The walkman also needed a fresh message, so Sony's agency decided to use an alien named plato to appeal to teens. This character was chosen to appeal to today's culturally ethnically diverse marketplace. As the account director explained, An alien is no one, so an alien is everyone. In addition to the memory stick players the Apple iPod has also greatly changed the consumer music scene.

A woman in a consumer group which was discussing dental hygiene commented that tarter felt like a wall on her teeth. This imagery was used in ads for Colgate tarter control, in which room sized teeth were shown covered by walls of tartar.

Researchers for a manufacturer of Swiss chocolate found that many chocolate lovers hide secret stashes around their house. One respondent confessed to hiding chocolate bar inside her lingerie drawer. The result was an ad campaign theme of 'The True Confessions of Chocoholics''.

Factors affecting consumer buying behaviour

Consumer decision making is essentially a problem solving process. Most customers whether individual customers or organisational buyers, go through similar mental processes in deciding which products and brands to buy. The more marketers know about the factors affecting their customers buying behaviour the greater their ability to design attractive product or service offerings to define and target meaningful market segments, and to develop marketing programs to fit the concerns and desires of those segments. The factors affecting consumer behaviour are as follows:-

2.a - Cultural Factors

The factors which are related with culture, these factors influence on consumer behaviour deeply. It has a significant impact on the consumer buying behaviour. These factors consist of social class, subculture and culture.

Culture

Culture influences people behaviour and desire which is the basic part of this factor. It comprises the basic values, perceptions, wants and behaviours that person learns continuously in society. Cultural values and beliefs tend to be relatively stable over time, but they can change from one generation to the next in response to changing conditions in society. For example, the baby boomers born in the United States between 1946 and 1960 have somewhat different values and behaviour patterns from those of their parents. Culture is an integral part of the hospitality and travel industry because it determines our lifestyle. Marketers are always trying to spot cultural shifts which might point the new products that might be wanted by customers or to increase demand. For example the cultural shift towards greater concern about health and fitness has created opportunities which resulted in many hotels adding exercise rooms or health clubs so that their guest can have access to it. And now companies are servicing customers who wish to buy low calorie food like McDonalds, Burger king and providing activity and health related holidays etc. Similarly the increased desire for leisure time has resulted in increased demand for convenience products and services such as microwave ovens, ready meals and direct marketing service businesses such as telephone banking and insurance.

(Source: Babin and Harris, 2009)

Sub culture

Every culture consists of groups of people which is relate with small sub culture. They share their values, circumstances and situations each other. Each culture contains smaller subculture or groups of people with shared value systems based on common life experiences and situations. Different subcultures help to build perhaps various marketers and their segments, design products and marketing programs according to their needs. For example, the average American family now has two wage earners who probably share decisions relation to vacations, car, financial instruments and major furniture items. In contrast, Korean -Americans as a subculture in America are much more inclined to favour the male in almost all decisions, including food. Now the American markets becoming more diverse so the companies are seeking managers who understand subcultures

Cultural differences across countries create both problems and opportunities for international marketers. Although consumers in different countries may have some things in common their value, attitudes, tastes etc but still it is a difficult task for the marketers to understand consumer behaviour outside their home country. Failing to understand the differences in customs and behaviours of other country can be fall down of company and its product at international level. For example , Burger king went to India without understanding the Indian culture which forced them to close down and same thing happened to KFC when they went to India .So the marketers must decide on the degree to which they will adapt their products and marketing programs to meet the unique need of consumer in various markets.

2.b - Social Factors

More or less some type of social class structure is found in every society. Every society has its status groupings largely based on similarities in income, education and occupation. Every society has different type of social classes which are related those members who share their values, cultures and behaviours each other and these factors are permanent in society. Researchers have invented the five typical social class are upper, upper-middle, and middle, working and lower. Social class in nations like USA, Canada, Australia and New Zealand is not indicated by that factor which is related to income but wealth, occupation, education, combination of income and other variables are measured by social factor. Travel, food and leisure activity which are related to great value of the product are found in many social classes. Some marketers focus on only one class. For example, Marriott Hotel in States targets only upper class and the restaurants in the downtown of Los Angles focus on middle class.

Groups

An individual's attitudes and behaviour are influenced by many small groups. These include a variety of groups that effect consumer behaviour through normative compliance, value expressed influence and informational influence. Reference groups build people attitude and behaviour with the help of direct or indirect reference or comparison. Target markets of reference group are identified by efforts of marketers. They influence consumers in many ways like they expose the person to new behaviours and lifestyles; they influence the person's attitudes and self concept. The importance of group influence varies by product and brand. It tends to be stronger when product is visible and weak when purchases of product made privately. Certain nightclubs can be associated with reference groups, attracting people who belong or wish to belong to the groups who frequent the night clubs.

The Family

Family members have a strong influence on buyer behaviour. Marketers are interested in the roles and influences to purchase of goods and services by wife , husband and children. Family members tend to specialize in the purchase of certain products either because of their interest or expertise or the role structure of family. The influence of various family members varies substantially across countries. Generally, the more traditional the society the more men hold the power. As women become more educated and more influential as wage earners in developing nation, more joint decision making will happen. Buying roles change with evolving consumer lifestyles. In America the wife traditionally has been the main purchasing agent for the family especially in the areas of food, household products and clothing. Children for instance, exert a large influence on decisions involving fast food restaurants. McDonalds aims fast food advertisement directly at children.

Roles and Status

People have some role in the society like father, mother, husband, employer, these role supposed to be positioned in the group and fulfil individual expectation. Marketers should carry on to information about the product because individuals role keep changing in the group. Marketers must realise that a person who belongs to the family is an important part of the group. Family role influences buying behaviour. For example, college dining with parents may act differently than when they are dining with peers. Our roles are also influenced by our surroundings. People dining in elegant restaurants behave differently than when they dine at any fast food restaurants. Society gives a status which is reflecting the respect to each role. People often choose products that show their status in society. For example a business travel may get upset when all first class seats are sold in the desired flight and being forced to travel in economy class. So the marketers and sales professional have to be careful regarding the role and status of the prospective customer.

Personal Factors

Personal factors include individual characteristics that, when taken in aggregate, distinguish the individual from others of the same social group and culture. These include age, life-cycle stage, occupation, economic circumstances, and lifestyle. A consumer's personality and self-conception will also influence his or her buying behaviour.

Demographic

Demographic influences include the individual's characteristics such as age, gender, ethnic origin, economic situation, family lifecycle and occupation. It also influences the nature of consumer needs and wants, their ability to buy products or services to satisfy those needs and consumers attitudes toward and preferences for different products and brands. Preferences for leisure activities, travel destinations, food and entertainment are often age related. For example, older consumers spend more on medical care and travel and less on home furnishings and clothing than do younger people, the presence of young children obviously affects the purchasing of a variety of goods and services. Age related factors are very important but its often overlooked by marketers. Successful marketing to various age segments may require specialization and targeted strategies. It requires a marketing staff and advertising agency with people of varying ages and cultural backgrounds.

Situational factors

Situational factors influence the consumer's buying decision when changes occur in the consumer's circumstances. A person's economic situation greatly affects product choice and the decision to purchase a particular product. A rise in income may lead the consumer to think about purchasing a new car. On the other hand, being made redundant may cause the consumer to cancel a holiday. Companies must take advantage of opportunities caused by economic upturns and take defensive steps when facing an economic downturn.

Lifestyle

People coming from the same culture, social class and occupation may have quite different lifestyles. This influencing factor relates to the way we live through the activities we engage in and interests we express. In simple terms it is what we value out of life. Lifestyle is often determined by how we spend our time and money. Marketers search for relationships between their products and people who are achievement oriented. A chef may then target its restaurant more clearly at the achiever lifestyle. For marketers it is important to know that consumers make purchase decisions to support their self concept. For example, when examining consumers a marketer may initially build marketing strategy around more obvious clues to consumption behaviour, such as consumer's demographic indicators e.g., age, occupation, income.

2.c - Psychological Factors

Although marketers try to define groups of potential customers with common attributes or interests, as a useful unit for the formulation of marketing strategies, it should not be forgotten that such groups or market segments are still made up of individuals who are different from each other. A person's buying choices are influenced by five psychological factors such as Motivation, Perception, Personality, Ability and Knowledge.

Motivation

Desires or needs are part of any person in given time. These are taking place because of thirst, hunger and distress naturally. A motive is an internal force that encourages the consumer towards a particular course of action; it has both intensity and direction. Motivation is also closely tied to the concept of involvement, which relates to how much effort the consumer will exert in making a decision. Highly motivated consumers will want to get mentally and physically involved in the purchase process. Not all products have a high percentage of highly involved customers e.g. milk but marketers who market products and services that may lead to high level of consumer involvement should prepare options that will be attractive to this group. The motive play a vital role in order to achieve marketing goals and satisfy consumer needs, which can be understood as an internal stimulating force that adjust an individual activities. Set of motives could be affected by actions. If marketers have a clear view to recognise motive so the marketing mix would be convenient for them to develop.

Hierarchy of desires of Maslow's has long been used as a framework for classifying basic motivations. Five groups of needs are stacked one on top of other and form a progression. Having achieved satisfaction on the lowest level, the individual can progress to strive to achieve the goals of the next level up.

Perception

The process which is related with perception consists of interpreting information, organising, selecting and produce meaning of inputs. A person who is motivated always ready to act, it depends how he or she acts which is influenced by perception of his or hers. When information is collected by consumers regarding a high involvement service such as a cruise, they follow a series of steps, or a hierarchy of effects. For example seeing an advertisement for food when you are hungry is more likely to produce a positive response than seeing the same advertisement after having a heavy meal. So marketers hope that their messages reach target audiences when they are relaxed, at leisure and at ease with the world, because then the individual is more likely to place a positive interpretation on the message and it's less likely to be distracted by the other pressures and needs.

Personality

Personality, consisting of all the features, traits, behaviours and experiences that make each of us distinctive and unique. With high involvement products, where there is a strong emotional and psychological link between the product and the consumer, it is relatively easy to see how personality might affect choice and decision making. Personality can be useful in analyzing consumer behaviour for some product or brand choices. For example, a beer company may discover that heavy beer drinkers tend to rank high in sociability and aggressiveness. This information can be used to establish a brand image for the beer and to suggest the type of people to show in an advertisement.

Attitude

An attitude is a stance that an individual takes on a subject that predisposes them to react in a certain way to that subject. In marketing terms, consumers can develop attitudes to any type of services and goods which are shadow of the marketing mix and these factors influence to consumer behaviour and attitudes, consumers who have made their behaviour regarding healthy food taking, is important perceive chicken as healthy alternative to beef and pork. Attitudes put people in a frame of mind for liking or disliking things. In hotels and restaurants, first time customers who develop an immediate negative attitude will be prevented from returning.