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H AP T ER 1
C

INTRODUCTION TO
C O N S U M E R B E H AV IO U R
Peter Ling

LEARNING OBJECTIVES
After reading this chapter you should be able to:
1 define consumer behaviour
2 explain the sectors that constantly target consumers
3 describe how the sectors research consumers
4 discuss how consumers make decisions
5 debate how marketing activities impact consumers
6 discuss an appropriate framework to study consumer behaviour.
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YOUR One way or another, you have been a consumer since you were young and have been
CONSUMER evolving over the years.
WORLD As a baby, you consumed whatever food your parents gave you. You wore nappies,
clothes and shoes that your parents chose. As a toddler, you devoured Sesame Street shows
on television to learn about the alphabet. You tagged along on supermarket trips, insisted on
a lolly, and observed how your mum and other people shopped. You probably pestered your
parents to buy Coca-Cola soft drink, McDonald’s french fries and Happy Meals with special
film toys.
As you became more knowledgeable in your teens, you exerted more influence. You
specified which brands of clothing and footwear that your parents should buy for you, which
attire to wear for your high school social, what household items would be good for the home
and where to go for family holidays.
You progressed to making your own decisions. You chose which discipline to study, which
university to enrol in after consulting friends and parents, whether to study full-time or part-
time and whether to go on a study tour or student exchange.
In your current life, you likely watch favourite films on DVD, online or at the cinema,
buy music from the iTunes Store, buy your own smartphone, laptop or tablet, create
Facebook and email accounts, join a brand community and vote for X-Factor or The Voice
contestants. You also choose which pubs to frequent, which celebrities to follow, which
deviant consumer political party to support, which sport to participate in, which job to work in, whether to have
A consumer who tattoos or cosmetic surgery, whether to buy fake brands or second-hand goods, whether to
deviates from accepted rent or buy an apartment or house, and whether to plan for your future by buying insurance
behaviour, such as policies.
engaging in shoplifting Your life now may also involve deciding whether to donate time or money to a fund-raising
appeal, whether to sell your possessions to raise funds for charity or cash for newer goods,
masochistic behaviour
whether to opt in to donate your organs when you die, whether to be a responsible consumer
Deriving pleasure from
(for example, throwing your burger wrapper in the bin instead of on the road) or deviant
pain
consumer (such as a shoplifter), whether to buy organic food or environmentally friendly
consumer behaviour goods, whether to complain about advertisements, whether to participate in product
The process of how development activities of companies, and whether to engage in masochistic behaviour such
consumers behave in as a Tough Mudder event that includes an electroshock therapy.
situations involving Welcome to your own wide world of consumer behaviour! And to the organisational world
goods, services, ideas that is constantly engaging you with technology and services. See Figure 1.1 on how
and experiences Samsung connects your multimedia world through its 3D television.
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FIGURE 1.1
Samsung 3D TV

INTRODUCTION
Consumer behaviour is a central part of your life. It is a changing process where you could be
a user, buyer, seller, influencer and an environmentally conscious consumer during different
stages of your life. You may be involved in the process individually or collectively. You may buy
goods or raffle tickets on impulse. You may buy brands habitually or accept alternatives in an
out-of-stock situation. You may take some time deciding on high-priced purchases, rationally
evaluating the options.
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There are many questions surrounding consumer behaviour: What is consumer
behaviour? Which sectors constantly target consumers? How do sectors research
consumers to gain insights into their behaviour? How do consumers decide from abundant
alternatives? How do marketing activities impact consumers? What is an appropriate
framework to study consumer behaviour? This chapter addresses all of these questions.

WHAT IS CONSUMER BEHAVIOUR?

Consumer behaviour is about the behaviour of consumers in different situations. However,
there are various definitions of the discipline:

The behavior that consumers display in searching for, purchasing, using, evaluating and
disposing of products, services and ideas.1

A discipline dealing with how and why consumers purchase (or do not purchase) goods and
services.2

Consumer behaviour can be thought of as the actions, reactions, and consequences that
take place as the consumer goes through a decision-making process, reaches a decision,
and then puts the product to use.3

The dynamic interaction of affect and cognition, behavior, and environmental events
by which individuals conduct the exchange aspects of their lives … the overt actions of
consumers.4

It is the study of the processes involved when individuals or groups select, purchase, use, or
dispose of products, services, ideas, or experiences to satisfy needs and desires.5

[C]onsumer behaviour is defined as (1) the mental and physical acts of (2) individuals,
households or other decision-making units concerned with ultimate consumption
involving (3) the acquisition, own production, use and, in some cases, the dispossession of
products and services.6

The definitions reveal two central themes about consumer behaviour:

Define consumer 1 It is a process of actions covering purchase, usage and/or disposal.
behaviour. 2 It involves individual or group consumers in goods, services, ideas and experiences.
Some scholars feel strongly that consumer behaviour must have the three elements
of acquisition, usage and disposal.7 This seems to be a rigid view of consumer behaviour.
Is it not consumer behaviour when you search for information but do not buy; when you
buy a gift and do not personally use the purchase; and when you do not dispose of your
purchase?
While you would discard many goods such as supermarket perishables and worn-
out furniture, would you get rid of an expensive watch or diamond? You may keep such
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purchases for life. Some consumers also have a habit of not disposing drinking cups and
food wrappers in bins at fast food outlets.
Would disposing be relevant when you buy an idea to donate to a social cause, such
as a tsunami appeal? You may continue to donate to different fund appeals, but would
this behaviour be considered disposing of one idea to support another idea? Also, would you
dispose your wonderful experiences gained through time at the movies or rides at a theme
park?
The definitions also seem to cover new and high-price purchases, which would naturally
include a more thorough process of searching, evaluating and selecting before the purchase
action. In practice, consumers often make routine or impulse purchases of low-price items.
For example, you may buy a certain drink out of habit, convenience or availability when you
are thirsty (see more discussion under the section ‘How consumers decide’).
Hence, a more suitable definition to cover different consumer situations would be:

Consumer behaviour is about how consumers behave in situations involving goods,

services, ideas and experiences.

The situations could cover pre-purchase, purchase and post-purchase. The situations
could be for trying something new (for example, a new food item offered by a sales promoter
in a supermarket), buying a new purchase (for example, a car), making a repeat purchase
(for example, buying the same brand of milk), changing a service provider (for example,
your internet or telephone provider), supporting a public service campaign (for example,
slowing your driving speed) or considering a purchase but not eventually buying it (for
example, travel insurance).
Depending on the situation, you as a consumer would behave differently; for example,
buying, using and disposing of a simple item; searching, evaluating and buying as a gift;
buying, using and keeping an expensive purchase; evaluating but not buying; and so on.
Your consumer behaviour situations are diverse and you may have your own definition of
the field after learning more about this complex field of consumer behaviour.

SECTORS TARGETING CONSUMERS

Explain the sectors
The terms ‘private’, ‘public’ and ‘non-profit’ sectors are often used to distinguish commercial, that constantly target
government and not-for-profit organisations that market to consumers. At different times consumers.
of your human life cycle, you could be buying commercial goods (for example, bread),
non-profit institution
government services (for example, water) and not-for-profit ideas (for example, donating
An organisation that
to an appeal to save endangered animals). This section focuses first on the non-profit, then
organises charitable,
the public and lastly the private sector.
cultural, educational,
political, recreational,
Non-profit sector social or sporting
Non-profit institutions (also known as the voluntary or third sector) organise charitable, activities on a non-profit
cultural, educational, political, recreational, social or sporting activities on a non-profit basis
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basis.8 A non-profit organisation uses commercial marketing concepts for social change or
social marketing purposes.9
Social marketing has two goals: first, to get consumers to increase support for a social
cause (for example, donations or consumer rights); and second, to convince consumers to
decrease some behaviour (for example, consumption of drugs or binge drinking—a process
de-marketing described as de-marketing).10 For example, WWF as the independent conservation
A marketing activity organisation works with businesses, communities and governments to help ‘people live in
that aims to decrease harmony with nature’.11 WWF initiatives include gaining support for its preservation
consumption, such as of the Amazon tropical rainforest and reduction of global carbon emissions (see
drugs and binge drinking Figure 1.2).

FIGURE 1.2
WWF

Another non-profit organisation is Consumers International, which has championed

consumer rights since 1960 in 120 countries through 240 member organisations. Its
eight principles are that the consumer has the right to satisfaction of basic needs, safety,
information, consumer education, healthy environment, choice, to be heard and to
redress.12
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A unique nature of non-profit organisations is that they survive on funding or member
support, although they do use private sector organisations to assist from time to time. For
example, consulting firm Deloitte, which has a website on ‘Not-for-profit sector insights’,
revealed in its 2012 survey the challenge of securing more government funding to service
increasing community needs during natural disasters.13
A research study of non-profit managers in Britain, the USA and Australia found
that promotional marketing was the non-profits’ most important activity, with a
small percentage acknowledging the importance of market research.14 Another study
highlighted that non-profit organisations are organisation-centred rather than
consumer-oriented.15

Public sector
The public sector provides government services for consumers and organisations, such as public sector
education, electricity, health care, gas, public transportation, roads, police, military, water A sector that provides
and tourism. Many nations market their cities or countries to attract tourists, residents government services
and investments.16 for consumers and
In some countries, both the public and private sectors supply household services organisations, such
contemporaneously; for example, electricity in the USA and water in Britain and France.17 as electricity, gas and
Education also can be offered by both the public and private sectors, with the price water
differential not bothering some parents. For example, an Australian Scholarships Group
study revealed that a public education from pre-school to Year 12 in Melbourne, Australia,
would cost about $70,000, compared with a private education of $500,000.18
One study reported that consumers should have access, choice, information, redress
and representation concerning public services, especially the health service.19 Another
report recommended the need for more consumer engagement to improve the mental
health service in Victoria, Australia.20
The public sector also provides useful consumer protection services. For example:21
1 The Australian Bankers Association advises on identity protection.
2 The Australian Department of Communications, through its Stay Smart Online
website, advises on securing computers, online interactions and transactions.
3 The tourism program within the Department of Industry helps travellers to maximise
their visits to Australia.
The Australian Government has also been running numerous social marketing
campaigns to influence behaviour change: for example, on health, anti-smoking,
cancer awareness, organ donation, life quality and sexually transmissible infections
(see Figure 1.3).22
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FIGURE 1.3
Sexually transmissible
infections campaign

WIPE OFF 5: TAC, VICTORIA

Speeding on roads has always been an issue. The Transport Accident Commission (TAC) in
Victoria, Australia, started addressing the problem in 1990 with speed cameras and laser
mer speed detectors.
consu our
behavi ion
Research provided evidence that reducing the driving speed by fi ve kilometres an hour

in act
would make a significant diff erence to the stopping distance in an emergency situation, and
therefore help to prevent fatal accidents. After a series of research testing on advertising
concepts, the ‘Wipe off 5, or wipe out lives’ campaign started in 2001.
Over the years, the television campaign (see Figure 1.4) has shown a father guilty of a car
crash that killed his daughter; women talking about speed-related trauma and the long-term
damage of a serious road crash; a father being held responsible for killing a young female
cyclist; the ripple eff ect of a young man’s death on family, friends and colleagues; Melbourne
Victory football players speaking in Arabic, English, Greek, French, Italian and Portuguese
about the need for road control; and Australian Rules football players advocating ‘Wipe off 5’.
The integrated campaign has also included the use of posters, stickers, banners and
online sites Facebook, Twitter and Instagram to engage people on how to ‘Wipe off 5’.
‘Wipe off 5’ has had a great impact on drivers’ attitudes and behaviour—speeding
incidence declined over time from 25 per cent to 11 per cent. Fatalities dropped from fifty-
two in 2009 to forty-four in 2013.23
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FIGURE 1.4
‘Wipe off 5’

Private sector
The private sector or business sector is made up of commercial companies marketing private sector
goods, services, ideas and experiences to consumers (as well as the private, public and non- A sector made up of
profit sectors). It includes commercial research companies collaborating with their global commercial companies
offices and marketers to research consumers for product development, consumer trends that market goods,
and lifestyle changes. It also includes creative services firms in advertising, public relations, services and experiences
marketing communication, media and production who plan and execute integrated to consumers and also
campaigns to appeal to consumers. The sector also includes industry associations promoting to private, public and
their product categories, such as beef, milk, fruits and vegetables. non-profit sectors
Consumers’ purchases of commercial goods and services can be categorised as follows:24
1 Convenience goods—non-durables or fast-moving consumer goods (FMCG), such as Fast-moving consumer
dairy items. goods (FMCG)
2 Convenience services—such as entertainment, finance, health, news, telephone and Consumer goods that
travel. are non-durable, such as
3 Durables—such as appliances, cars, furniture and clothes. dairy items
4 Specialty products—luxury items such as diamonds and premium watches.
5 Unsought services—such as blood donations, life insurance and funeral services. unsought services
Services that consumers
The convenience goods category, naturally, is the most advertised because of its low
do not usually seek, such
price, consumption frequency and high volume compared with other categories, which
as funeral services and
command higher prices but lower purchase incidence. The Nielsen Global AdView Pulse
donating blood
2013 report (which covered Argentina, Brazil, Croatia, Egypt, France, Greece, Hong Kong,
Japan, Kuwait, Lebanon, Mexico, Portugal, Saudi Arabia, Spain, Switzerland and United
Arab Emirates) revealed that FMCG had the highest advertising share of 21.3 per cent, with
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entertainment at 13 per cent and industry and services at 11.8 per cent. The convenience
goods categories of FMCG and services outspent the durables category by about four times
(see Table 1.1).25

TABLE 1.1 CONSUMER GOODS AND SERVICES CATEGORIES ADVERTISING SHARE (%)
Advertising share by FMCG 21.3
consumer categories Entertainment 13.0
Industry and services 11.8
Auto 9.2
Media 9.1
Health care 7.4
Financial 6.2
Telecom 5.8
Durables 5.7
Distribution 5.5
Clothing and accessories 3.4
Miscellaneous 1.6

The world’s largest FMCG company, Procter & Gamble (P&G), has billion-dollar brands
such as Head & Shoulders, Olay, Oral-B, Pampers and Pantene.26 P&G spends about 11 per
cent of sales revenue on advertising, with about US$9 billion advertising on its US$83
billion sales in 2011.27
This quote from P&G aptly sums up the goal of the business sector:

Today we reach a little more than half of the world’s 6.7 billion consumers. We want to
reach another billion in the next several years, and much of that growth is going to be in
the emerging markets, where most babies are being born and where most families are
being formed. We see growth across our entire portfolio.28

One category for P&G growth is the sanitary pad market in India, where 12 per cent
of reproductive-age women use sanitary pads and 88 per cent use old fabric, newspapers,
dried leaves and grass, husks, ash and sand.29 This has presented P&G the opportunity to
work with the public sector to reach 2.5 million girls in 15,000 schools across India with
corporate social hygiene messages.30
responsibility Working with the public and non-profit sectors is a goal of many companies, a concept
The notion that called corporate social responsibility (CSR) where organisations have responsibilities to
organisations have their society and consumers.31 CSR dimensions cover legal, ethical and philanthropic
responsibilities to their expectations.32 In Australia, the private sector supports the government’s National Cultural
society and consumers Policy to facilitate consumer enjoyment of Australian-made films, music festivals,
(often known as CSR) museums, arts centres and orchestras.33 However, one research report cautioned that
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consumers would dissociate with companies that are insincere in their social initiatives
and are not proactively matching the initiatives with corporate mission.34
Unilever, a competitor of Procter & Gamble, has a ‘Private Sector Outreach’ program—
in consultation with 300 companies in Brazil, China, Colombo, France, India, Indonesia,
Liberia, Mexico, Netherlands, Russia, South Africa, Spain and Britain—to focus on social
issues such as education, health and ‘early days’ child nutrition for 1000 days between
conception and the second birthday.35
One classic example of private sector collaboration with the non-profit sector is the
(Red) campaign. Singer Bono and activist Bobby Shriver started (Red) in 2006 to partner
with private companies to develop (Red)-branded goods and services (see Figure 1.5).
A percentage of sales turnover goes to its global fund to help HIV/AIDS victims in Ghana,
Kenya, Lesotho, Rwanda, South Africa, Swaziland and Zambia. Partners include Apple,
Starbucks, Coca-Cola and Live Nation Entertainment. So far, partners have contributed
over US$250 million to assist 40 million people in Africa.36

FIGURE 1.5
Apple’s red iPod Nano
raises funds to fight
AIDS in Africa

Not all private sector companies are in the good books of consumers. A 2014 Wall Street
Journal article on ‘The 10 most hated companies in America’ included Abercrombie & Fitch
because consumers still remember the controversial 2006 statement that the company was
only interested in ‘cool kids’ but not overweight customers.37 Some companies’ questionable
practices were highlighted in award-winning documentary, The Corporation, which
showed how companies can manipulate marketing, government and the media to achieve
their profit focus (see the discussion on dissociative companies in Chapter 4).38
In summary, the private, public and not-for-profit sectors serve consumers by providing
goods, services, ideas and experiences. The non-profit sector’s goal is to have consumers
support their programs, whether to increase donations or to dissociate with undesirable