Module 4 Consumer Behaviour The Learning outcomes for this module are: Describe the level of involvement and types of consumer problem-solving processes Recognise the various stages of the consumer decision process Explore how situational influences may affect the consumer behaviour Explore the psychological influences that may affect the consumer behaviour Explore the social influences that affect the consumer behaviour  Introduction to Consumer Behaviour Buying behaviour is the decision processes and acts of people involved in buying and using products. Consumer buying behaviour refers to the buying behaviour of ultimate consumers.  Level of Involvement and Consumer Problem-Solving Processes A. Level of involvement is an individual’s degree of interest in a product and the importance he or she places on a product. 1. Levels of involvement are classified as high, low, enduring, and situational. a) High-involvement products tend to be those that are visible to others, expensive, and/or of great importance. b) Low-involvement products tend to be less expensive and have less associated social risk. c) Enduring involvement is ongoing and long term. d) Situational involvement is temporary and dynamic. 2. A consumer’s level of involvement is a major determinant of the type of problem-solving process employed. a) Routinised response behaviour is the type of consumer problem-solving process that requires very little search-and-decision effort; it is used for products that are low priced and bought frequently. b) Limited problem solving is a type of consumer problem-solving process that buyers use when they purchase products occasionally or need information about unfamiliar brands in a familiar product category; it requires a moderate amount of time for information gathering and deliberation.c) Extended problem solving is the consumer problem-solving process employed when unfamiliar, expensive, or infrequently bought products (such as a car, home, and college education) are purchased; buyers use many criteria to evaluate brands and spend more time searching for information and deciding on the purchase. d) Impulse buying, in contrast, is an unplanned buying behaviour involving a powerful urge  Consumer Buying Decision Process A. The consumer buying decision process is a five-stage purchase decision process that includes problem recognition, information search, evaluation of alternatives, purchase, and post-purchase evaluation. 1. The actual act of purchase is only one stage in the process and is a later stage. 2. Not all decision processes, once initiated, lead to an ultimate purchase; the individual may terminate the process at any stage. 3. Not all consumer buying decisions include all five stages. B. Problem Recognition 1. This stage occurs when a buyer becomes aware of a difference between a desired state and an actual condition. 2. The individual may be unaware of the problem or need. 3. Marketers may use sales personnel, advertising, and packaging to trigger recognition of needs or problems. 4. Recognition speed can be slow or fast. C. Information Search 1. This stage begins after the consumer becomes aware of the problem or need. 2. The search for information about products will help resolve the problem or satisfy the need. 3. There are two aspects to an information search: internal search and external search. a) In the internal search, buyers first search their memories for information about products that might solve the problem. to buy something immediately. b) In the external search, buyers seek information from outside sources.(1) An external search occurs if buyers cannot retrieve enough information from their memories for a decision. (2) Buyers seek information from friends, relatives, public sources such as government reports or publications, as well as marketer-dominated sources such as salespeople, advertising, websites, package labelling, and in-store demonstrations and displays. D. Evaluation of Alternatives 1. When successful, an information search yields a consideration (evoked) set of products or a group of brands that the buyer views as possible alternatives. a) In this stage, the consumer establishes a set of evaluative criteria against which to compare the characteristics of the products in the evoked set. b) The consumer rates and eventually ranks the brands in the consideration set by using the criteria and their relative importance. 2. Marketers can influence consumers’ evaluation by ‘framing’ the alternatives – that is, by the manner in which they describe the alternatives and attributes. E. Purchase 1. The consumer selects the product or brand to be purchased. 2. Product availability, seller choice, and terms of sale may influence the final product selection. 3. The actual purchase is made unless the process has been terminated earlier. F. Post-purchase Evaluation 1. The buyer begins to evaluate the product after purchase, based on many of the criteria used in the evaluation of alternatives stage. 2. Cognitive dissonance is a buyer’s doubts shortly after a purchase about whether it was the right decision.  Situational Influences on the Buying Decision Process A. Situational influences are factors resulting from circumstances, time, and location that affect the consumer buying decision process. 1. Can influence a consumer’s actions in any stage of the buying process 2. Can shorten, lengthen, or terminate the buying process.B. Situational factors can be divided into five categories: physical surroundings, social surroundings, time perspective, purchase reason, and the buyer’s momentary mood and condition. 1. Physical surroundings include location, store atmosphere, aromas, sounds, lighting, weather, and other factors in the physical environment in which the decision process occurs. 2. Social surroundings include characteristics and interactions of others, such as friends, relatives, salespeople, and other customers, who are present when a purchase decision is being made. 3. Time dimensions include the possible frequency of product use, the length of time required to use the product, and the length of the overall product life; the time of day, day of the week or month, seasons, and holidays of the purchase; and the amount of time pressure a consumer faces. 4. The purchase reason raises the questions of what exactly the product purchase should accomplish and for whom. 5. A buyer’s momentary moods or conditions can affect a person’s ability and desire to search for information, receive information, or seek and evaluate alternatives.  Psychological Influences on the Buying Decision Process Psychological influences are those that operate in part to determine people’s general behaviour, thus influencing their behaviour as consumers. A. Perception 1. Perception is the process of selecting, organising, and interpreting information inputs to produce meaning. 2. Information inputs are the sensations received through the sense organs. 3. Although we receive numerous pieces of information at once, only a few reach our awareness; we select some inputs and ignore others because we do not have the ability to be conscious of all inputs at one time. a) Selective exposure is the process of selecting inputs to be exposed to our awareness while ignoring others. (1) An input is more likely to reach a person’s awareness if it relates to an anticipated event. (2) A person is likely to let an input reach consciousness if the information helps satisfy current needs.b) The selective nature of perception also results in selective distortion and selective retention. (1) Selective distortion is an individual’s changing or twisting of received information when it is inconsistent with personal feelings or beliefs. (2) Selective retention is remembering information inputs that support personal feelings and beliefs and forgetting inputs that do not. 4. The second step in the perceptual process is perceptual organisation – to organise the information that does reach awareness, integrating the new information with what is already known. 5. Third, an individual’s interpretation of information inputs, necessary to reduce mental confusion, is the assignment of meaning to what has been organised; interpretation is usually based on what is expected or familiar. B. Motives A motive is an internal energising force that directs a person’s behaviour toward satisfying needs or achieving goals. 1. A buyer’s actions at any time are affected not by just one motive but by a set of motives, some stronger than others. 2. Motives affect the direction and intensity of behaviour. a) Maslow’s hierarchy of needs are the five levels of needs humans try to satisfy, from most to least important. b) Once needs at one level are met, humans try to fulfil needs at the next level.c) The levels of needs are: physiological needs, safety needs, social needs, esteem needs, and self-actualisation needs. 3. Patronage motives are motives that influence where a person purchases products on a regular basis. C. Learning Learning refers to changes in an individual’s thought processes and behaviour caused by information and experience. 1. The learning process is strongly influenced by the consequences of an individual’s behaviour; behaviours with satisfying results tend to be repeated. 2. Inexperienced buyers use different types of information than do experienced shoppers familiar with the product and purchase situation. 3. Consumers learn about products directly by experiencing them or indirectly D. Attitudes An attitude is an individual’s enduring evaluation of, feelings about, and behavioural tendencies toward an object or idea. 1. Attitudes are learned through experience and interaction with other people. 2. Attitudes remain generally stable, but they can be changed. 3. An attitude consists of three major components: cognitive, affective, and behavioural. 4. Consumers’ attitudes toward a firm and its products strongly influence the success or failure of the organisation’s marketing strategy. 5. Marketers use several approaches to measure consumer attitudes toward dimensions such as prices, package designs, brand names, advertisements, salespeople, repair services, store locations, features of existing or proposed products, and social responsibility activities. a) Survey customers b) Projective techniques c) Attitude scales are means of measuring consumers’ attitudes by gauging the intensity of individuals’ reactions to adjectives, phrases, or sentences about an object. 6. Changing people’s negative attitudes is a long, expensive, and difficult task and may require extensive promotional efforts. E. Self-Concept1. Personality is a set of internal traits and distinct behavioural tendencies that result in consistent patterns of behaviour. a) The uniqueness of one’s personality arises from hereditary background and personal experiences. b) When advertisements focus on certain types of personalities, the advertiser uses personality characteristics that are valued positively. 2. Self-concept is a perception or view of oneself. a) Buyers purchase products that reflect and enhance their self-concept. b) A person’s self-concept may influence whether he or she buys a product in a specific product F. Lifestyles Lifestyle is an individual’s pattern of living expressed through activities, interests, and opinions. 1. Patterns include the way people spend time, extent of interaction with others, and general outlook on life and living. 2. People partially determine their lifestyle, but lifestyles are influenced by other factors. 3. Lifestyles influence product needs. category and may have an impact on brand selection.  Social Influences on the Buying Decision Process Social influences are the forces that other people exert on one’s buying behaviour. A. Roles 1. A role is a set of actions and activities that an individual in a particular position is supposed to perform based on the expectations of both the individual and surrounding persons. 2. Each individual has many roles. B. Family Influences 1. An individual’s roles, particularly family roles, to some extent influence that person’s behaviour as a buyer. 2. Consumer socialisation is the process through which a person acquires the knowledge andskills to function as a consumer. 3. The extent to which adult family members take part in family decision making varies among families and product categories. 4. When two or more family members participate in a purchase, their roles may dictate that each is responsible for performing certain purchase-related tasks, such as initiating the idea, gathering information, determining if the product is affordable, deciding whether to buy the product, or selecting the specific brand. 5. The family life-cycle stage affects individual and joint needs of family members. C. Reference Groups 1. A reference group is any group – large or small – that positively or negatively affects a person’s values, attitudes, or behaviours. Families, friends, church groups and professional groups are examples. 2. There are three major types of reference groups: membership, aspirational and disassociative. a) A membership reference group is one to which an individual actually belongs; the individual identifies with group members strongly enough to take on the values, attitudes and behaviours of people in that group. b) An aspirational reference group is a group to which one aspires to belong; one desires to be like those group members. c) A group that a person does not wish to be associated with is a disassociative reference group; the individual does not want to take on the values, attitudes, and behaviour of group members. 3. A reference group is an individual’s point of comparison and a source of information. 4. How much a reference group influences a purchasing decision depends on the individual’s susceptibility to reference group influence and strength of involvement with the group. 5. Reference group influence may affect the product decision, the brand decision, or both. 6. A marketer sometimes uses reference group influence in advertisements to promote the message that people in a specific group buy the product and are highly satisfied with it. D. Opinion Leaders In most reference groups, one or more members stand out as opinion leaders; an opinion leader is a reference group member who provides information about a specific sphere that interests reference group participants.1. An opinion leader is in a position or has knowledge or expertise that makes him or her a credible source for information on one or more topics. 2. An opinion leader is likely to be most influential when consumers have high product involvement but low product knowledge, when they share the opinion leader’s values and attitudes, and when the product details are numerous or complicated. E. Digital Networks • Consumers are using social networks, such as facebook, MySpace, YouTube and Twitter to share personal profiles that include blogs, pictures, audios and videos. Part of that conversation is consumption; which products to buy, use, dismiss or beware of. • As is the case in the offline world, online recommendations and suggestions from friends and family is a powerful tool for marketers to recognise and engage with in an authentic manner. • Established and trusted network sources of reviews and recommendations include Choice at http://www.choice.com.au/. However, many lesser-known consumer advocate websites and even many individuals are exerting a stronger influence on consumers who are turning to the Internet for product reviews.Contrived and misguided suggestions will only damage the brand/product/organisation in the longer term. F. Social Classes A social class is an open group of individuals with similar social rank. 1. The criteria used to group people into classes vary from one society to another. 2. In our society we group according to many factors, including occupation, education, income, wealth, race, ethnic group, and possessions; analyses of social class in the United States divide people into three to seven categories. 3. To some degree, individuals within social classes develop common patterns of behaviour. 4. Because social class influences so many aspects of a person’s life, it also affects: a) buying decisions b) spending, saving and credit practices c) type, quality and quantity of products d) shopping patterns and stores patronised. G. Culture and Subcultures 1. Culture is the accumulation of values, knowledge, beliefs, customs, objects, and concepts that a society uses to cope with its environments; culture includes:a) Tangible items such as food, clothing, furniture, buildings, and tools b) Intangible concepts such as education, welfare, and laws c) The values and a broad range of behaviours accepted by a specific society. 2. The concepts, values, and behaviour that make up a culture are learned and passed from one generation to the next. 3. Because cultural influences affect the ways people buy and use products, culture affects the development, promotion, distribution, and pricing of products. 4. International marketers must take into account tremendous global cultural differences. a) People in other regions of the world have different attitudes, values, and needs. b) International marketers must adapt to different methods of doing business and must develop different types of marketing mixes. 5. Subcultures are groups of individuals whose characteristic values and behaviour patterns are similar and differ from those of the surrounding culture. a) Subcultural boundaries are usually based on geographic designations and demographic factors. b) Marketers recognise that the growth in the number of Australian subcultures has resulted in considerable variation in consumer buying behaviour. (1) The Youth Subculture • The Australian youth subculture is primarily about interacting online and offline with others of a similar age and with similar values. • Teenage behaviour is (heavily) influenced by group norms and peer pressure. • Interacting with other youth generates a sense of belonging and a common purpose. Hence what one does, the group does. • Social marketing efforts aim to curb damaging and dangerous consumption habits such as binge drinking. (2) Subcultures of Consumption • Subcultures hold differing values to the surrounding culture and are traditionally defined by geographic territories. • Unlike a traditional subculture that may be defined by geographic boundaries or demographic variables, subcultures of consumption are unified in their consumption choices,• Global communities can emerge where age and affluence are not prerequisites. HarleyDavidson, for example, has a created a means by which their consumers can socialise together in the creative act of consuming Harley-Davidson. • For marketers the implication is to build a brand/product/organisation by generating a cultural following.  Contribution Questions and Video Case Study Contribution questions Please post your answers to the following questions on the forum by clicking on the link above, and respectfully answer any other answers provided by your peers. Q1. How does a consumer’s level of involvement affect his or her choice of problem-solving process? Q2. What are the major stages in the consumer buying decision process? How does the Internet impact this decision-making process? Q3. Interview a classmate via the forum about the last purchase he or she made. Report the stages of the consumer buying process used and those skipped, if any. Video Case Study Watch the video and answer the following question. How does British Airways in this commercial manage to market across cultures? Please post your comments and answers online Watch Video 1989 British Airways CommercialDuration: (1:02) User: kjetzer - Added: 04/07/06 YouTube URL: http://w .youtube.com/watch?v=heSudg-tfIk  Quick Quiz This quick quiz is for self reflection and has been setup to allow you to complete it as many times as you wish. No scores will be recorded!