Consumer behaviour

Consumer behaviour is the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. It blends elements from psychology, sociology, social anthropology, marketing and economics. It attempts to understand the decision-making processes of buyers, both individually and in groups such as how emotions affect buying behaviour. It studies characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, sports, reference groups, and society in general.

Customer behavior study is based on consumer buying behavior, with the customer playing the three distinct roles of user, payer and buyer. Research has shown that consumer behavior is difficult to predict, even for experts in the field. Relationship marketing is an influential asset for customer behaviour analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer. A greater importance is also placed on consumer retention, customer relationship management, personalisation, customisation and one-to-one marketing. Social functions can be categorized into social choice and welfare functions.

Each method for vote counting is assumed as social function but if Arrow’s possibility theorem is used for a social function, social welfare function is achieved. Some specifications of the social functions are decisiveness, neutrality, anonymity, monotonicity, unanimity, homogeneity and weak and strong Pareto optimality. No social choice function meets these requirements in an ordinal scale simultaneously. The most important characteristic of a social function is identification of the interactive effect of alternatives and creating a logical relation with the ranks. Marketing provides services in order to satisfy customers. With that in mind the productive system is considered from its beginning at the production level, to the end of the cycle, the consumer (Kioumarsi et al., 2009).

Black box model

The black box model shows the interaction of stimuli, consumer characteristics, decision process and consumer responses. It can be distinguished between interpersonal stimuli (between people) or intrapersonal stimuli (within people). The black box model is related to the black box theory of behaviorism, where the focus is not set on the processes inside a consumer, but the relation between the stimuli and the response of the consumer. The marketing stimuli are planned and processed by the companies, whereas the environmental stimulus are given by social factors, based on the economical, political and cultural circumstances of a society. The buyer's black box contains the buyer characteristics and the decision process, which determines the buyer's responses.

Environmental factors		Buyer's black box		Buyer's response
Marketing Stimuli	Environmental Stimuli	Buyer Characteristics	Decision Process
Product Price Place Promotion	Economic Technological Political Cultural Demographic Natural	Attitudes Motivation Perceptions Personality Lifestyle Knowledge	Problem recognition Information search Alternative evaluation Purchase decision Post-purchase behaviour	Product choice Brand choice Dealer choice Purchase timing Purchase amount

The black box model considers the buyer's response as a result of a conscious, rational decision process, in which it is assumed that the buyer has recognized the problem. However, in reality many decisions are not made in awareness of a determined problem by the consumer.

Evaluation of alternatives

At this time the consumer compares the brands and products that are in their evoked set. The evoked set refers to the number of alternatives that are considered by consumers during the problem-solving process. Sometimes also known as consideration, this set tends to be small relative to the total number of options available. How can the marketing organisation increase the likelihood that their brand is part of the consumer's evoked set? Consumers evaluate alternatives in terms of the functional and psychological benefits that they offer. The marketing organisation needs to understand what benefits consumers are seeking and therefore which attributes are most important in terms of making a decision. It also needs to check other brands of the customer’s consideration set to prepare the right plan for its own brand.

Purchase decision

Once the alternatives have been evaluated, the consumer is ready to make a purchase decision. Sometimes purchase intention does not result in an actual purchase. The marketing organisation must facilitate the consumer to act on their purchase intention. The organisation can use a variety of techniques to achieve this. The provision of credit or payment terms may encourage purchase, or a sales promotion such as the opportunity to receive a premium or enter a competition may provide an incentive to buy now. The relevant internal psychological process that is associated with purchase decision is integration. Once the integration is achieved, the organisation can influence the purchase decisions much more easily.

There are 5 stages of a consumer buying process: The problem recognition stage, meaning the identification of something a consumer needs. The search for information, which means you search your knowledge bases or external knowledge sources for information on the product. The possibility of alternative options, meaning whether there is another better or cheaper product available. The choice to purchase the product and then finally the actual purchase of the product. This shows the complete process that a consumer will most likely, whether recognisably or not, go through when they go to buy a product.

Post purchase evaluation

The EKB (Engel, Kollat, Blackwell) model was further developed by Rice (1993) which suggested there should be a feedback loop. Foxall (2005) further suggests the importance of the post-purchase evaluation and that it is key because of its influences on future purchase patterns.

Other influences

Consumer behaviour is influenced by internal conditions such as demographics, psychographics (lifestyle), personality, motivation, knowledge, attitudes, beliefs, and feelings. Psychological factors include an individual's motivation, perception, attitude and belief, while personal factors include income level, personality, age, occupation and lifestyle.

Congruence between personality and the way a persuasive message is framed (i.e., aligning the message framing with the recipient’s personality profile) may play an important role in ensuring the success of that message. In a recent experiment, five advertisements (each designed to target one of the five major trait domains of human personality) were constructed for a single product. The results demonstrated that advertisements were evaluated more positively the more they cohered with participants’ dispositional motives. Tailoring persuasive messages to the personality traits of the targeted audience can be an effective way of enhancing the messages’ impact.

Behaviour can also be affected by external influences, such as culture, sub-culture, social class, past experience reference groups, family and situational determinants. Culture is the broadest and most abstract of the external factors, they are the complexity of learning meanings, values, norms, and customs shared by members of a society. It is important to study the impact of culture on consumer behavior as marketers expand their international marketing efforts. Subcultures may be based on age, geographic, religious, racial, and ethnic differences. These racial/ethnic subcultures are important to marketers because of their growth, size, and purchasing power. Social Class refers to relatively homogenous divisions in a society into which people sharing similar lifestyles and interests can be grouped. These social classes are important to marketers because these consumers have similar buying habits. Reference group is defined as "a group whose presumed perspectives or values are being used by an individual as the basis for his or her judgment, opinions, and actions." As consumers we use three different types of reference groups including, associative, aspirational and dissociative as a guide to specific behaviors. Marketers uses these groups to create advertisements. Finally, situational determinants or purchase and usage decisions. Three types of these may have an effect: specific usage situations, purchase situations, and the communication settings.

See also

• Consumer socialization
• Window shopping
• Consumer confusion
• Consumer perception
• Predictive buying
• Art & Copy
• Food and Brand Lab
• Google

Further reading

• Blackwell, Miniard and Engel (2006). Consumer Behaviour (10th Ed.). Thomson Learning.
• Deaton, Angus; Muellbauer, John, Economics and consumer behavior, Cambridge ; New York : Cambridge University Press, 1980. ISBN 0-521-22850-6
• Howard, J., Sheth, J.N. (1968), Theory of Buyer Behavior, J. Wiley & Sons, New York, NY.
• Kardes, Frank R.; Cronley, Maria L.; Cline, Thomas W., Consumer Behavior, Mason, OH : South-Western, Cengage Learning, 2011. ISBN 978-0-538-74540-6
• Laermer, Richard; Simmons, Mark, Punk Marketing, New York : Harper Collins, 2007. ISBN 978-0-06-115110-1 (Review of the book by Marilyn Scrizzi, in Journal of Consumer Marketing 24(7), 2007)
• Loudon, D.L. (1988), Consumer Behavior: Concepts and Applications, McGraw Hill, London.
• McNair, B. (1958), Retail Development, Harper & Row, New York, NY.
• Packard, Vance, The Hidden Persuaders, New York, D. McKay Co., 1957.
• Schiffman, L.G. (1993), Consumer Behavior, Prentice Hall International, London.
• Schwartz, Barry (2004), The Paradox of Choice: Why More Is Less, Ecco, New York.
• Shell, Ellen Ruppel, Cheap: The High Cost of Discount Culture, New York : Penguin Press, 2009. ISBN 978-1-59420-215-5
• Solomon, M.R. (1994), Consumer Behavior, Allyn & Bacon, London.

External links

• The Society for Consumer Psychology