Consumer Behaviour – Buying Process and Influencing Factors

Consumer behaviour refers to the study of how individuals, groups, or organizations select, purchase, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires. It involves understanding the decision-making processes of consumers and the various internal and external factors—such as psychological, cultural, social, and personal influences—that affect their choices.

Table of Contents

1. Need to Study Consumer Behaviour
2. Consumer Buying Process
3. Factors Influencing Consumer Buying Decisions

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Consumer behaviour is the subset of larger field of human behaviour. It is the behaviour that consumer displays in various consumption related activities, such as searching, purchasing, using, evaluating and disposing of products, as they expect that these will help in satisfying their needs. Products are accepted or rejected to the extent they are perceived as relevant to consumer needs and wants therefore the study of consumer behaviour entail study of what consumers buy, why do they buy, how do they buy, when do they buy, where do they buy, and how often do they buy.

The understanding of consumer behaviour helps the marketer to work out appropriate marketing strategies to assess their entry into the market and sustain therein. The study of consumer behaviour is interdisciplinary as it borrows from several other disciplines like economics, sociology, psychology, anthropology, social psychology. Overtime it has developed as separate field of study entailing numerous consumer researches.

Consumer behaviour according to Solomon (2011), is the study of understanding individuals, groups and organisations in terms of the way they buy, use and dispose off goods, services, ideas or experiences and satisfy their needs and wants. Consumer buyer behaviour on the other hand refers to the buying behaviour of final consumers-i.e., individuals and households, who buy goods and services for their personal consumption purposes. People participate in the consumer buying decision in different capacities, including initiator the one who suggests the idea of buying the product; influencer-the one who influences the decision by expressing his views or by giving an advise; decider-takes the required buying decisions; buyer- undertakes actual buying of the product; and user-who may or may not be the buyer, actually consumes the product.

1. Need to Study Consumer Behaviour

1. Consumer Markets – The consumer market is very vast and varies tremendously in age, income, education level and tastes. As consumers buy incredible variety of goods and services, their behaviour is highly unpredictable. Consumers are dissimilar in terms of their needs, preferences and lifestyle and this impacts their choices among various products, services and companies.
2. Marketing Orientation – Understanding the consumer is central to marketing and choosing the right target market (consumer segment) is central to marketing strategy. The value philosophy of marketing stresses that marketing is all about delivering value to the consumer which requires thorough knowledge of consumer behaviour and buying decision process.
3. Growth of Services Marketing – Services are intangibles which cannot be seen, heard, examined or felt in advance of purchase, nor is employee dependent. The quality is consistent over times. At times they are perishable in nature, i.e. they are lost forever if not consumed at the scheduled time. The very nature of services makes it all the more important to understand the consumer preferences and interests for developing effective marketing strategies for service products.
4. Environmental Concern – As the marketers worldwide are facing the problems of environment deterioration and shortage of resources, products needs to be modified to meet environment concern. The study of consumer behaviour helps in reverting the consumer segments having sensitivity to environment protection through use of modified products.
5. Technological Advancement – Technology is creating new set of habits amongst consumers. Consumers, who get used to certain technology, imbibe the habits induced by that technology and these habits get used in their purchase behaviour. Consumer are constantly acquiring new buying habits and getting used to certain social media or networking sites. Study of consumer behaviour will help marketed in learning the popular social networking mediums that consumers are using.
6. Different Buying Motives – Same person brings in different reasons in buying different products. And, different people buy the same product for different reasons. The marketer’s success lies in understanding the specific motives involved and appealing to them through the product offer. A sound knowledge of buying motives will facilitate the formulation of marketing programmes and product appeals that are appropriate for the motives discerned.

The importance of spotting the consumer behaviour trends correctly and early can never be overemphasised. Consumer behaviour will naturally keep changing since consumer needs keep changing with the times. In other words, we can say that consumer needs remain the same, but take new forms as the social, technological and economic context in which consumers live changes. Consumers may bring to the fore issues that haven’t concerned them before. Marketers would do well if they view consumer trend as a manifestation of something that has unlocked, rather than as the emergence of something totally new.

2. Consumer Buying Process

Stages in Consumer Buying Process

In the backdrop of understanding various influences on consumer buying
behaviour, marketers develop an understanding of how consumers actually make their buying decisions. Specifically marketers identify:

1. who all are involved in the buying decision,
2. what type of buying decisions is the buying situation suggest or requires, and
3. what all are the steps involved in the buying decision process.

Smart companies research the buying decision process involved in their product category. Consumers are asked to express their views on when they first become acquainted with the product category and brands, what their brand beliefs are, how involved they are with the product, how they make their brand choices, and how satisfied they are with the product after purchase. In a typical buying process the consumer passes through five stages, namely, problem recognition, information search, evaluation of alternatives, purchase decision and post purchase behaviour. Clearly, the buying process starts long before the actual purchase and has consequences long afterward.

2.1 Problem/Need Recognition

The buying process starts with the recognition of problem or need by the buyer Those needs which can be satisfied by acquiring and consuming goods and services, results into initiation of decision process involving the decision about what to buy as the need that can be satisfied through consumption becomes strong enough that it motivates a person to seek its satisfaction. The need is either triggered by internal stimuli, i.e. person’s hunger or thirst rises to a threshold level and becomes a drive, or external stimuli, i.e. a person passes a food joint and sees freshly baked food items that stimulates his hunger. Marketers, therefore, identify the circumstance(s) that trigger a particular need.

2.2 Information Search

An interested consumer may search for more information. The amount of the search depends on the strength of the drive, the amount of information one already has, the ease of obtaining more information and the value of having the additional information. Consumers information sources fall into four groups, namely, personal sources, i.e. family, friends, neighbours; commercial sources such as advertising, sales persons, dealers; public sources, i.e. mass media, internet searches and experiential sources, i.e. handling and using the product. The extent of using these information sources varied with the product category and the buyers’ characteristics. Generally, consumer receives major chunk of information from commercial sources but most effective information, comes from personal sources. Information gathering helps consumers in learning about availability of competing brands and their relative features.

A company must design its marketing mix to make customers aware of its product. It should carefully identify the consumer’s sources of information and the relative importance of each source.

2.3 Evaluation of Alternatives

Consumer evaluates the alternatives identified during the information search stage before arriving at a decision. The evaluation may involve either a single criterion or multiple criteria being used for comparing the alternatives. For example, while buying a car if the choice is narrowed to three brands and all the three brands are primarily compared on the basis of four attributes, say styling, operating economy, warranty and price. Clearly, the car which would rate best on all the attributes would be chosen over others. Marketers monitor consumers to determine what choice criteria they use, to identify any changes that may be taking place in their criteria and to correct any unfavourable misperceptions.

2.4 Purchase-Decision

Search for alternatives and their evaluation helps the consumer to decide about buying the product. In case the decision is to buy the product, a series of related decisions are made such as regarding product features, where and when to buy, where and when to take delivery, and what will be the mode of payment, Marketers recognize that the outcome of these additional decisions will have a bearing on customer satisfaction, so they will find ways to helps consumers make decisions as efficiently as possible. Another factor which is of importance to the consumer while taking a purchase decision is the attitude of others. If someone close to the consumer thinks that lowest-priced Car would be a better choice, then the chances of buying an expensive car are reduced. Finally, selecting a source from where to make a purchase, i.e. through internet website or a retail source is one of the major buying decisions. Marketers must provide comfort and convenience so as to make purchase easy for the consumers.

2.5 Post Purchase Behaviour

After purchasing the product, the consumer experiences some level of satisfaction or dissatisfaction. Buyer’s satisfaction is determined by the closeness of buyer’s expectations and product’s perceived performance. When performance is found less than consumer expectations, consumer feels dissatisfied, and in case if performance meets expectations, it results into consumer satisfaction. Whenever performance it exceeds expectations, the consumer tends to have feel delighted. A satisfied consumer buys the product again and also talks favourably about the product to others. There is an old saying that the best advertisement of a company is a satisfied customer. Dissatisfied consumer may abandon or return the product. Post purchase communication to buyers by marketers will provide better channel for speedy redress of customer grievances. Marketers should also monitor how consumers use and dispose the product, especially in order to protect the environment from unsafe disposal of hazardous products.

3. Factors Influencing Consumer Buying Decisions

Factors Influencing Consumer Behaviour

Various influencing factors related to consumer cultural, social, personal and psychological characteristics effect consumer buying decision. Marketers, though cannot control these factors, but understanding the nature of their influence on consumer decision making helps in providing more need satisfying solutions.

3.1 Cultural Factors

Cultural factors exert a deep influence on consumer buying decision. Marketer needs to understand the role played by the consumer’s culture, sub-culture and social class in determining consumption choices.

Culture – Culture refers to a set of values, traditions, or beliefs which guide the individual’s behaviour. A child normally learns value of achievement and success, hard work, respect for elders, from the family and other important institutions. Every society has a culture which influences buying behaviour that may vary greatly from country to country. Marketers must closely monitor culture values of a nation to find the best way to serve the market with the existing products and also to find opportunities for introduction of new products.

There is a noticeable trend found in countries, particularly those with more of young population, that there is an increasing concern among youth about health and fitness which has created a huge industry for fitness services, exercise equipment, protein supplements and comfortable clothing. Similarly, Indian men lately have started consuming more beauty products so as to look fair and handsome and thereby provide huge market potential to brands like Emami fair and handsome, Garnier Men, L’ oreal Men expert, etc.

Sub Culture – Sub-cultures are groups in a culture that exhibit specific behaviour pattern which distinguishes them from other groups within the same culture. Sub-cultures are based on factors such as race, nationality, religion, geographic regions. Sub-culture groups for example based on religion include Hindu, Muslim, Sikh, Christian, Jain, Parsi, Buddhist and each one may be an important market segment in regard to food products. Marketers design products and marketing programs which are tailored to the needs specific to the sub-cultural group.

Social Class – Ranking of members of the society within a society based on their characteristics such as income, occupation, education, and wealth etc., constitutes stratification of society into social class. People belonging to a social class share similar values, interests and behaviours. Marketers are, therefore, generally interested in knowing the membership of people to a social class as consumers within a given social class tend to exhibit similar buying behaviour, especially for products like clothing, automobiles, home furnishings, etc. For example, income level of a young lawyer might be similar to that of a middle-aged electrician, but they would have quite different tastes, attitudes and preferences for several products. The common social class scheme used by marketing managers could be classified as:

• Upper class, consisting of corporate executives, professionals, etc. who buy expensive goods and patronize fancy shops.
• Upper-middle class, consisting of business class and working professionals, who belong to private class, support art and are usually well educated.
• Lower-middle class, consisting of office workers, technicians, small business owners, believes more in saving rather than spending.
• Upper-lower class, consisting of production workers, semi-skilled workers and service personnel.
• Lower class, comprises of unskilled workers, who are largely unemployed and are typically poorly educated. They tend to have low incomes and live in substandard houses.

Different social classes respond differently to a marketer’s marketing program due to diversity across groups, and thus it becomes necessary to design marketing program tailored to specific social classes.

3.2 Social Factors

Consumer behaviour is also influenced by social factors, such as reference groups, family and social roles and status.

• Reference Groups – Person reference groups are all the groups that have a direct or indirect influence on their attitudes or behaviour. Groups that have a direct influence on consumers are called membership groups. Some groups such as family, friends, neighbours, coworkers interacts with consumers continuously and informally and are referred to as primary groups. Consumers also interact with more formal groups, such as religious, professional and trade-unions, referred to as secondary groups. Several studies in marketing have shown that personal advice in face-to-face groups is more effective as consumers are more likely to be influenced by word-of-mouth information from members of reference groups rather than advertising. Marketers must determine how to reach reference groups, especially opinion leader whose opinion or advice about a specific product is used by other members of the group.
• Family – Family members can strongly influence buyer behaviour. During a lifetime, people belong to two families. The one consists of parents and siblings, which influences buyers orientation toward religion, politics, self worth and love. The other consist of spouse and children, which here more direct influence on every day buying behaviour, especially for food, clothing, car, etc. For expensive products like housing, vacations, cars all the members of the family engage in joint decision making. Lately, there has been a shift in buying patterns due to direct and indirect influence exhibited by children and teens. Children make sure that their family buy the right products and are greatly influenced by their peers. Marketers are using television as a powerful medium in reaching children. They are targeting them at younger ages especially through advertisements and product tie-ins like Disney clothing, cartoon character bag packs, Tiffin’s, toys, etc.
• Roles and Status – In our lifetime we all participate in several groups including, family, organizations, and other groups such as social clubs. Groups are the important source of information and at times define norms for behaviour too. A person’s position in each group to which he or she belongs can be defined in terms of role and status. Role consists of activities a person is expected to perform. For example, a female performs several roles. In her family she plays the role of a wife and mother, at work place she is an employee, and she is a friend at a club. Each role carries a unique status vis-à-vis other members of the group. A vice president in a firm is seen to have more status then a manager, and a manager in turn have more status than an office employee. People generally choose products which reflect their role and status in the society and marketers need to be know the potential of the product to become a status symbol.
• Personal Factors – Personal characteristics such as age and life cycle stage, occupation, economic situation, lifestyle and personality are the other factors influencing buyer’s decision.
• Age and life cycle stage – Tastes and preferences of buyers for food, clothing, recreation, automobile change with age. Consumption pattern is also shaped by the family life cycle stage, suggesting number of children at home, age and gender of people in the household. Family life cycle stage is generally used by marketers to identify target markets and to develop appropriate products for each stage. Marketers should also consider critical events in once life, such as marriage, child birth, illness, retirement, etc. each bearing new need for the buyer. For example, Titan introduced Titan wedding collection and Tanishq introduced Vivaah collection across major stores especially during wedding season to attract more and more buyers. Insurance companies offer several plans for young children, during illness and benefits after retirement so as to ensure every need of the buyer during several stages of the age is being met.
• Occupation – A person’s occupation has a great bearing on the goods and services which one bought. Executives buy more business suits as compared to blue collar employees who prefer comfortable clothing. Marketers identify the occupational groups having interest in their offerings and thus tailor their products for certain occupational groups. For example, a computer software company designs different packages for students, engineer, doctors and managers.
• Economic Situation – A person’s economic situation directly affects product choice. Marketers who offer income-sensitive goods analyse the trends prevailing in regard to personal income, savings, debts, borrowing power and interest rates. Some marketers offer products to the target market with lot of money and resources and charge prices to match their needs. For example, Rado positions its luxury watches as elegant and an object of passion. Other marketers target consumers with modest means. Timex offers more affordable watches.
• Lifestyle – People from same culture and social class generally exhibit different lifestyles. Lifestyle is defined as person’s pattern of living in the world and is expressed in terms of – activities, such as work, hobbies, sports, shopping; interests as regards food, fashion, recreation; and opinions about themselves, social issues and products. Lifestyle concept of an individual can helps marketers to understand changing consumer buying behaviours, as consumers often buys products that represent their lifestyle. For example, EVOK, the retail chain has attempted to address the evolving lifestyle of affluent urbanites as they provide wide range of styles in home furniture, kitchen accessories, and bedroom and bathroom accessories all under one roof. Customers are able to express their unique lifestyle by selecting items from vast range of options.