Consumer Market and
Consumer Buying Behavior
Consumer behavior refers to the selection, purchase and consumption of goods and services for the satisfaction of their wants. There are different processes involved in the consumer behavior. Initially the consumer tries to find what commodities he would like to consume, then he selects only those commodities that promise greater utility. After selecting the commodities, the consumer makes an estimate of the available money which he can spend. Lastly, the consumer analyzes the prevailing prices of commodities and takes the decision about the commodities he should consume.
Consumer Behavior is the study of how individual make decisions to spend their valuable resources (time, money and energy) on consumption-related items. It includes the study of what they buy, why they buy it, where they buy it, how often they buy it, and how often they use it.
Take a simple example of the product “Soap”, consumer behavior researchers wants to know:
-what types of soap consumers buy (Strawberry, honey, moisture)?
– What brand (Lux, Aromatic, Dove)?
– Why they buy it (To wash the body from dirt, to wash dirt cloths)?
-Where they buy it (Supermarket, convenient store)?
– How often they buy it (weekly, bi-weekly, monthly)?
The answer to these questions can be found through consumer behavior study and can provide manufacturers with important input for product scheduling, design, modification and promotional strategy. Actually, the study of consumer behavior is highly interesting. It is an exciting field, but for two reason it is also complicated and difficult. First the behavior is of consumers are difficult to explain, it can’t understand fully. Secondly consumer behavior is so prevalent that it significantly affects our lives through either our own actions or those of others. However, in order to better understand the nature and scope of consumer behavior,
Definition of Consumer Behavior
Simply Consumer behavior involves the purchasing and other consumption-related activities of people. Consumer behavior is designed as the behavior that consumers display in searching for, purchasing, using, evaluating and disposing of products, services and ideas that they expect will satisfy their needs. In other words, Consumer behavior may be defined as the decision process and physical activity individuals engage in when evaluating acquiring, using or disposing of goods and services.
According to H.W. Barkman & C. Gilson, “Consumer behavior maybe defined the activities people engaged in actual or potential use of market items- whether produce, services, retail environment or ideas”.
However, a more specific definition is given by Bagozzi and Zeltman, “Consumer Behaviors are acts, process and social relationship exhibited by individuals, groups and organization in the obtainment, use of and other resources”.
The above definitions focus on three aspects:
i) Activity: Acts, process, and social relationships
ii) People: Individuals, groups and organizations
iii) Experiences: Obtaining, using and consequences
Models of Consumer Behavior
A model can be defined is simplified representation of some larger system which is used to identify, explain and predict behavior within that system. All model of consumer behavior attempt to organize many variables and relationship in a meaningful way.
Basically, the study of consumer behavior is the study of how individuals make decisions to spend their valuable resources (time, money, effort) on consumption related items. It includes the study of what they buy it and how after they buy it, the consumer behavior model (stimulus response) helps to understand the above questions.
|Buyers Characters||Buyer Decision Process|
Evaluation of alternatives
Post purchase decision
|Marketing Stimuli||Other Stimuli|
Figure: Model of Buyer Behavior
The model shows that the marketing and environmental stimuli inter into the buyer’s consciousness. The buyer’s characteristics and decision process lead to certain purchase decisions. The buyer’s consciousness between the arrival of outside stimuli and the buyer’s purchase decisions.
Factors influencing Buying Behavior
Consumer behavior refers to the selection, purchase and consumption of goods and services for the satisfaction of their wants. There are different processes involved in the consumer behavior. Initially the consumer tries to find what commodities he would like to consume, then he selects only those commodities that promise greater utility. After selecting the commodities, the consumer makes an estimate of the available money which he can spend. Lastly, the consumer analyzes the prevailing prices of commodities and takes the decision about the commodities he should consume. Meanwhile, there are various other factors influencing the purchases of consumer such as social, cultural, personal and psychological. The explanation of these factors is given below
1. Cultural Factors
Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture, and social class. Thus marketer should understand the cultural background of the consumer. It includes:
Basically, culture is the part of every society and is the important cause of person wants and behavior. Simply, culture is that, what we are. That means our life style, our behavior, what we like to do and wear all these show our culture.In a border sense, culture refers to a complex set of valus,norms believes, attitudes and customs which are handed down from generation to generation and which help individuals to communication, interpret or evaluate as members of a given society.
For xample as a Bangladeshi culture we feel comforte to wear lungi in the house or prefere to eat rice and fish in our meal. This is the culture of Bangladeshi people. The influence of culture on buying behavior varies from country to country therefore marketers have to be very careful in analyzing the culture of different groups, regions or even countries.
No society is totally homogenious. Each culture consits of smaller subcultures that provide more specific identification or common value system for their members. Each culture contains different subcultures such as religions, nationalities, geographic regions, racial groups etc. Marketers can use these groups by segmenting the market into various small portions. For example marketers can design products according to the needs of a particular geographic group.
iii) Social Class
Every society possesses some form of social class which is important to the marketers because the buying behavior of people in a given social class is not similar. In this way marketing activities could be tailored according to different social classes. Here we should note that social class is not only determined by income but there are various other factors as well such as: wealth, education, occupation etc. For example, In our society there is upper class, mid class and lower class people and their consumption pattern is not alike to each other.
2. Social Factors
In addition to cultural factors consumer behavior is influenced by such social factor as reference groups, family, and social roles and status.
i) Reference Groups:
Reference groups refer to group that have either a direct or indirect influence on a person’s attitudes, values, opinions and behavior. People are significantly influenced by their reference groups. Reference groups expose an individual to new behaviors and lifestyles. They influence attitudes and self-concept. And they create pressure for conformity that may affect actual product and brand choices. The impact of reference groups varies across products and brands. For example if the product is visible such as dress, shoes, car etc then the influence of reference groups will be high. Reference groups also include opinion leader (a person who influences other because of his special skill, knowledge or other characteristics).
Buyer behavior is strongly influenced by the member of a family. Family is defined as two or more persons related by blood, marriage or affecting who reside together. Family members constitute the most influential primary reference group affect buying decision. However, the relative importance of each member may vary according to the kind of product or service under considertion, its cost and other variables. Therefore marketers are trying to find the roles and influence of the husband, wife and children. If the buying decision of a particular product is influenced by wife then the marketers will try to target the women in their advertisement. Here we should note that buying roles change with change in consumer lifestyles.
(iii) Roles and Status
Each person possesses different roles and status in the society depending upon the groups, clubs, family, organization etc. to which he belongs. The person’s position in each group can be defined in terms of roles and status. A role consists of the activities that a person is expected to perform. For example a woman is working in an organization as finance manager. Now she is playing two roles, one of finance manager and other of mother. Therefore her buying decisions will be influenced by her role and status.
3. Personal Factors
Personal factors can also affect the consumer behavior. Some of the important personal factors that influence the buying behavior are: lifestyle, economic situation, occupation, age, personality and self concept.
i) Age and Stage in the Family Life Cycle:
Age and life-cycle have potential impact on the consumer buying behavior. It is obvious that the consumers change the purchase of goods and services with the passage of time. For example: they eat baby food in the early years, most food in the mature years and special diets in the later years. Habit, taste, recreation is also age related. Consumption is also in influenced by the family life cycle. Marketers have identified nine stages of the family life cycle, e.g. bachelor stage, newly married couples, expanding-1, expanding-2, contracting, post-parental childless, childless older married, lone survivor (working), and lone survivor (retired).
(ii) Occupation and Economics Circumstance:
The occupation of a person has significant impact on his buying behavior. For example a marketing manager of an organization will try to purchase business suits, whereas a low level worker in the same organization will purchase rugged work clothes.
Product choice is greatly effected by economic circumstances disposable income, saving investment, borrowing power etc. For example, as inflation increases more money is requird for consumer to purchase the same amount of goods. This may lead to general discipline in consumer impending.
Lifestyle of customers is another import factor affecting the consumer buying behavior. Lifestyle refers to the way a person lives in a society and is expressed by the things in his/her surroundings. It is determined by customer interests, opinions, activities etc and shapes his whole pattern of acting and interacting in the world. Marketer search for relationships between their products and lifestylegroups. For example, computer manufacture might find that most computer buyers are achivement-oriented.
iv) Personality and Self-concept:
Each person’s distinct personality influences his or her buying behavior. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting response to one’s own environment. Personality is usually described in terms of self-confidence, dominance, sociability, defensiveness and adaptability. There exist a strong correlation between certain personality types and product or brand choice. For example, women who view herself as beautiful will exhibit patterns of buying cloths and cosmetics than a woman who see herself uninteresting.
4. Psychological Factors
A person’s buying behavior is also influenced by the various psychological factors.These are: motivation, perception, learning, beliefs and attitudes.
Perception is the process by which an individual selects organizations, and interprets information inputs to create a meaningful picture of the world. One person might perceive a fast-talking salesmen as talkative or aggressive, while other perceive as intelligent or helpful. There are three different perceptual processes which are selective attention, selective distortion and selective retention. In case of selective attention, marketers try to attract the customer attention. Whereas, in case of selective distortion, customers try to interpret the information in a way that will support what the customers already believe. Similarly, in case of selective retention, marketers try to retain information that supports their beliefs.
When people act, they learn. Learning is the relatively permanent change in behavior due to experience. Most human behavior is learned. Learning theory teaches marketers that they can build up demand for a product by association it with strong drives, using motivating cues and providing positive reinforcement.
iii) Beliefs and Attitudes
Through doing and learning, people acquire beliefs and attitudes. These in turn, influence their buying behavior. A belief is a descriptive thought that person hold about something. Beliefs may be based on knowledge, opinion or faith. These beiefs make-up product and brand images, and people act on their images.
An attitude is a person’s enduring favorable or unfavorable evaluation toward some object or idea. Attitudes put individuals into a frame of mind of liking or disliking a product, motivating toward or away from it.
All of the factors are described above are crucially important for a marketer to understand . Because he must stisfy the customers according their needs and wants. Also he sometimes need to crate demand in customers mind. For this reason this is very much impotant for a efficient marketer to handle all of his customers more effectively and enthusiastically.
Case Study: Consumer Buying Behaviour in Retail Market
Consumer Buying Behaviour
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This report is developed in the form of a practical data based marketing report. The prime objective of this report is to examine the patterns of consumer behaviour in retail market. For such purpose, this report has collected weekly purchase data of a particular consumer segment. The presentation of the data is done in the form of pie charts. The report has analysed the data in the light of the theories. The theories have examined the consumer behaviour patterns in order to examine what factors have direct impact on the purchasing behaviour of consumers. In addition to this, the report has also determined the significance of understanding the consumer behaviour patterns for the marketers in the form of insights. This report is a very useful source of information in the field of marketing to have a good understanding of the theoretical concepts of consumer behaviour patterns and their implication in real practices.
Buying behaviour of consumers demotes the purchasing intentions of a customer. In terms of marketing consumer buying behaviour can regarded as the perception and habits shown by consumers while purchasing as specific goods or availing specific services. For marketer, effective knowledge of buying behaviour of consumer can be considered as one of the major phenomena, which pursue a significant amount of significance from the strategic perspective (Evans, Jamal and Foxall 2007). The analysis of daily purchasing trend can be considered as one of the major measures through which the buying behaviour of customers can be analysed and judged.
In this perspective, the presented report aims to analyse the daily purchasing trends undertaken by me a common individual. In regard to this, the analysis of the purchasing habits and trends can be done with the help of different theories and marketing perspectives. The prime quest of the report is to deliver high degree of insights regarding consumer buying behaviour for a business organization and its role in the strategic formulation for a marketer. In relation to this, the report first of all explores the description of the profiling of consumer. Along with this, the report also reflects the weekly purchasing in concern to relevant marketing theories.
Description of Consumer
From the perspective of having clear insights of marketing decision, a marketer is required to decided a segment on which, he can easily target. In this perspective, segmentation can be considered as the selection of specific group of customers on the basis of their purchasing behaviour, demographic, psychographic, and geographic basis (Doyle, 2011). The profiling for the consumer in context to this report can be reflected as below:
Segment of the consumer: As per the segmentation theory of marketing, there can be different basis for the purpose of classifying the segment of the consumer (Kengthon, 2011). In this regard, the consumer for this report can be classified on the basis of two specific perspectives:
Demographic:- The consumer is a 18 year old boy, who is undergraduate collage going student. Along with the study he also undertake part job for his pocket money. He belongs to a literate and middle income group family.
Psychographic:- Another crucial aspect for reflecting the segmentation practices for the selected consumer is psychographic perspective. In the context of the selected consumer, it can be defined that consumer in this segment shows a strong and positive affinity towards highly prestigious and multination brands. In addition to this, convenience can be considered as one of the major factors that can directly or indirectly affect his purchasing behaviour.
Purchase Preference:- Consumer selected for observation shows his preference towards purchasing of prestigious brands and highly convenient products services. In addition to this, the consumer also shows his preference towards ready to use products, as well as, customised services.
Purchase Behaviour:- Generally consumer in this segment does not belong to high income earning class so the overall purchase intention is not quite high for the consumer. He likes to do purchasing in small segments. He shows slow frequency of purchasing of luxury products or services. Commodities which are used in daily routine can be considered as the prime target commodity for the purchasing of this consumer.
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On the basis of this profiling, the consumer can be defined under the category of Young Optimism category of Roy Morgan Values Segments scale. As per this category, the consumer segment, which is not profitable in existing time but conceives high degree of potential for future term, is categorized. The consumer profiled for the analysis can be considered as a young optimism related customers as his spending are not quite high in existing time, but in future he can be a good prospect for business organizations (Roy Morgan Values Segments 2014).
Analysis of Weekly Purchases using Relevant Marketing Theories
For the purpose of analysing consumer buying behaviour of an individual there is a need of having thorough analysis of the spending trends and habits for that individual. In regard to this, for the purpose of understanding of the consumer buying behaviour, recording of spending of a consumer for a week has been taken into account. The analysis of this trend can be discussed with the help of different crucial theories of consumer buying behaviour.
For instance, weekly spending trend for the consumer shows that majority of spending done by the consumer is done on weekends (i.e. 37%), while on remaining weekdays, about 63% of total spending of the consumer takes place. This trend shows the affinity of the consumer toward convenient purchasing (Evans, Jamal and Foxall 2007). The consumer mainly spends on weekends when he is free and can employ adequate amount of time in shopping.
In addition to this, the weekly spending pattern is also showing that majority of purchases undertaken by the consumer is done of the basis of credit purchase. This behaviour shown by the consumer can be reflected with the help of economic purchase theory, which shows that in comparison to cash purchase, credit purchasing is perceived as an effective and highly economic feasible option (Copley, 2007). In addition to this, from the perspective of the influence of personal context, it can be reflected that social and cultural perspective can be considered as highly rated influence factors. In the influence index these two factors have availed highest ranking, which is quite aligned with black box theory.
The black box model of the consumer behaviour also focuses on the buyer characteristics and purchasing decision process. This model shows that there is a direct interaction between external stimuli and characteristics of the consumers and their decision process. This theoretical model proclaims that behaviourism is a key concept in the marketing, which says that consumer behaviour is directly induced by environmental stimuli in the form of social factors (Sandhusen, 2000). As evident from the data graphs that social factors have direct impact on the consumer purchasing patterns, the graph shows that family members’ influence is a key factor that motivates individuals to have purchase of particular products.
In the light of this theory, it has been examined that buyer characteristics are important in determining their purchase behaviour including their attitudes, motivation, perception; personality and life style, yet buyer’s response for purchase is also induced by external stimuli which makes their decision process rationale (Irwin, Sutton and McCarthy, 2008). The postulations of this theory are effective enough to support the consumer behaviour patterns observed from the weekly purchase data that also shows that family members of a person play the role of the reference group for an individual to have purchase of goods.
In addition to this, as per the top influencing criteria, convenience in the purchasing can be considered as highly rated factor while undertaking weekly purchasing. This buying behaviour of consumer can be reflected with the help of social status theory. The observation of the consumer behaviour patterns derived from the weekly purchase practices, it has been reviewed that consumer behaviour purchasing is directly linked with the social factors, means consumers purchase some of the products in order to maintain their social status (Cohen and Demand Media. 2014).
This observation can also be supported by the Theory of Social Status. This theory proclaims that consumers in order to maintain the status of the segment from which they belong tend to purchase expensive products. The purchase of the products is done by the customers in order to have satisfaction and meeting their physiological please. The consumer having purchasing of some unique and specific product brands tend to show their belongingness with the admired social class and thus want to prove powerful (Lantos, 2010).
This theory has direct implication for marketers to under the purchasing and buying behaviour of the consumers. The marketers hence should focus on their brand promotion in order to induce customers to purchase their desired products according to their social status (Lantos, 2010). In this way, this theory directly supports the consumer behaviour patterns observed from the data findings.
The motivation behind the purchasing can be considered as one of the major aspects behind the purchasing habit of the consumer. The weekly purchasing trends are reflecting that majority of purchasing done by the consumer is done for accomplishing physiological needs. In addition to this, cultural motivation is also one of the major needs behind the purchasing practices undertaken by the individual (Solomon, Russell-Bennett, and Previte 2012).
As per the Maslow Hierarchy of need theory, there is different level of needs which drives an individual towards purchasing (Brennan et al 2014).In this way, on the basis of the analysis of the weekly purchases of the individual it can be reflected that buying behaviour of the consumers can be considered quite aligned with different specific theories of the consumer buying behaviour.
Nomination of High-involvement Purchasing
In near future, as a consumer my involvement of purchasing will be quite high with the electronic products like mobile phones. This product will have some specific features that make it highly augmented and beneficial for me. As per the integrated product concept of marketing theory there can be some different layers of product which induce the consumer to purchase that product.
In the case of mobile phone, there is some crucial core as well as augmented features like new technology, attractive packaging, and promotional offers which can be considered quite influencing factors towards my buying behaviour. Along with this, black box theory of consumer buying behaviour also reflects that product related sensory information such as its packaging, colour, designing, and technology makes the product exclusive in the eyes of consumer.
The black box theory states that these external features of the product make it valuable for consumer and positively induce the consumer buying process to make purchase (Katie, 2013). In this way, it can be considered that my high involvement in the buying process of mobile phone can integrate marketing theory with the consumer buying behaviour concept.
From the overall analysis of the purchasing practices and patterns of the consumers in a week it has been determined the consumer purchase behaviour is dynamic in nature and it depends of the situations and external environment factors to a great extent. Consumers not only purchase to meet their physiological needs, but they are also influenced by the influence of their social groups most importantly the family members.
The data patterns also reflect that consumers do purchase mostly at the weekends and in the weekdays they purchase the most on Thursday. These buying patterns of the consumer do represent that consumer purchase behaviour is highly induced by several factors. The theories of marketing and consumer behaviour also support the specifications that consumer behaviour is not a sole process but it is directly affected social groups and external stimuli.
Through having personal insight into the data and its analysis, it has been acknowledged that consumer buying behaviour is an important phenomenon for marketers operating in the international markets. The marketers should promote their brands according to the purchase behaviour of the consumers. In the purchase behaviour of consumers, the marketers should consider their taste, preferences, their cultural values, social norms and several other things related to their characteristics and in their personal and social values.
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