Consumer Buying Behaviour

What influences consumers to purchase products or services? The consumer buying

process is a complex matter as many internal and external factors have an impact on
the buying decisions of the consumer.

When purchasing a product there several processes, which consumers go through.

These will be discussed below.

1. Problem/Need Recognition
How do you decide you want to buy a particular product or service? It could be that
your DVD player stops working and you now have to look for a new one, all those
DVD films you purchased you can no longer play! So you have a problem or a new
need. For high value items like a DVD player or a car or other low frequency
purchased products this is the process we would take. However, for impulse low
frequency purchases e.g. confectionery the process is different.

2. Information search
So we have a problem, our DVD player no longer works and we need to buy a new
one. What’s the solution? Yes go out and purchase a new one, but which brand? Shall
we buy the same brand as the one that blew up? Or stay clear of that? Consumer often
go on some form of information search to help them through their purchase decision.
Sources of information could be family, friends, neighbours who may have the
product you have in mind, alternatively you may ask the sales people, or dealers, or
read specialist magazines like What DVD? to help with their purchase decision. You
may even actually examine the product before you decide to purchase it.

3. Evaluation of different purchase options.

So what DVD player do we purchase? Shall it be Sony, Toshiba or Bush? Consumers
allocate attribute factors to certain products, almost like a point scoring system which
they work out in their mind over which brand to purchase. This means that consumers
know what features from the rivals will benefit them and they attach different degrees
of importance to each attribute. For example sound maybe better on the Sony product
and picture on the Toshiba , but picture clarity is more important to you then sound.
Consumers usually have some sort of brand preference with companies as they may
have had a good history with a particular brand or their friends may have had a
reliable history with one, but if the decision falls between the Sony DVD or Toshiba
then which one shall it be? It could be that the a review the consumer reads on the
particular Toshiba product may have tipped the balance and that they will purchase
that brand.

4. Purchase decision
Through the evaluation process discussed above consumers will reach their final
purchase decision and they reach the final process of going through the purchase
action e.g. The process of going to the shop to buy the product, which for some
consumers can be as just as rewarding as actually purchasing the product. Purchase of
the product can either be through the store, the web, or over the phone.

Post Purchase Behaviour

Ever have doubts about the product after you purchased it? This simply is post
purchase behaviour and research shows that it is a common trait amongst purchasers
of products. Manufacturers of products clearly want recent consumers to feel proud of
their purchase, it is therefore just as important for manufacturers to advertise for the
sake of their recent purchaser so consumers feel comfortable that they own a product
from a strong and reputable organisation. This limits post purchase behaviour. i.e.
You feel reassured that you own the latest advertised product.

Factors influencing the behaviour of buyers.

Consumer behaviour is affected by many uncontrollable factors. Just think, what
influences you before you buy a product or service? Your friends, your upbringing,
your culture, the media, a role model or influences from certain groups?

Culture is one factor that influences behaviour. Simply culture is defined as our
attitudes and beliefs. But how are these attitudes and beliefs developed? As an
individual growing up, a child is influenced by their parents, brothers, sister and other
family member who may teach them what is wrong or right. They learn about their
religion and culture, which helps them develop these opinions, attitudes and beliefs
(AIO) . These factors will influence their purchase behaviour however other factors
like groups of friends, or people they look up to may influence their choices of
purchasing a particular product or service. Reference groups are particular groups of
people some people may look up towards to that have an impact on consumer
behaviour. So they can be simply a band like the Spice Girls or your immediate family
members. Opinion leaders are those people that you look up to because your respect
their views and judgements and these views may influence consumer decisions. So it
maybe a friend who works with the IT trade who may influence your decision on what
computer to buy. The economical environment also has an impact on consumer
behaviour; do consumers have a secure job and a regular income to spend on goods?
Marketing and advertising obviously influence consumers in trying to evoke them to
purchase a particular product or service.

Peoples social status will also impact their behaviour. What is their role within
society? Are they Actors? Doctors? Office worker? and mothers and fathers also?
Clearly being parents affects your buying habits depending on the age of the children,
the type of job may mean you need to purchase formal clothes, the income which is
earned has an impact. The lifestyle of someone who earns £250000 would clearly be
different from someone who earns £25000. Also characters have an influence on
buying decision. Whether the person is extrovert (out going and spends on
entertainment) or introvert (keeps to themselves and purchases via online or mail
order) again has an impact on the types of purchases made.

Maslow’s Hierarchy of Needs

Abraham Maslow hierarchy of needs theory sets out to explain what motivated
individuals in life to achieve. He set out his answer in a form of a hierarchy. He
suggests individuals aim to meet basic psychological needs of hunger and thirst.
When this has been met they then move up to the next stage of the hierarchy, safety
needs, where the priority lay with job security and the knowing that an income will be
available to them regularly. Social needs come in the next level of the hierarchy, the
need to belong or be loved is a natural human desire and people do strive for this
belonging. Esteem need is the need for status and recognition within society, status
sometimes drives people, the need to have a good job title and be recognised or the
need to wear branded clothes as a symbol of status.
Self-actualisation the realisation that an individual has reached their potential in life.
The point of self-actualisation is down to the individual, when do you know you have
reached your point of self-fulfilment?
But how does this concept help an organisation trying to market a product or service?
Well as we have established earlier within this website, marketing is about meeting
needs and providing benefits, Maslows concept suggests that needs change as we go
along our path of striving for self-actualisation. Supermarket firms develop value
brands to meet the psychological needs of hunger and thirst. Harrods develops
products and services for those who want have met their esteem needs. So Maslows
concept is useful for marketers as it can help them understand and develop consumer
needs and wants.

For further information on motivation theory please

visit www.learnmanagement2.com

Types of buying behaviour.

There are four typical types of buying behaviour based on the type of products that
intends to be purchased. Complex buying behaviour is where the individual purchases
a high value brand and seeks a lot of information before the purchase is made.
Habitual buying behaviour is where the individual buys a product out of habit e.g. a
daily newspaper, sugar or salt. Variety seeking buying behaviour is where the
individual likes to shop around and experiment with different products. So an
individual may shop around for different breakfast cereals because he/she wants
variety in the mornings! Dissonance reducing buying behaviour is when buyer are
highly involved with the purchase of the product, because the purchase is expensive or
infrequent. There is little difference between existing brands an example would be
buying a diamond ring, there is perceived little difference between existing diamond
brand manufacturers.

To summarise:

• There are five stages of consumer purchase behaviour

• Problem/Need Recognition
• Information search.
• Evaluation of purchases.
• Purchase decision.
• Post purchase behaviour.
• Culture has an impact on the company.
• Marketers should take into account Maslows hierarchy of needs.
buyer behaviour - stimulus-response model

Introduction

A well-developed and tested model of buyer behaviour is known as the stimulus-response model, which
is summarised in the diagram below:

In the above model, marketing and other stimuli enter the customers “black box” and produce certain
responses.

Marketing management must try to work out what goes on the in the mind of the customer – the “black
box”.

The Buyer’s characteristics influence how he or she perceives the stimuli; the decision-making process
determines what buying behaviour is undertaken.

Characteristics that affect customer behaviour

The first stage of understanding buyer behaviour is to focus on the factors that determine he “buyer
characteristics” in the “black box”. These can be summarised as follows:
Each of these factors is discussed in more detail in our other revision notes on buyer behaviour.
How do customers buy?

Research suggests that customers go through a five-stage decision-making process in any purchase. This
is summarised in the diagram below:

This model is important for anyone making marketing decisions. It forces the marketer to consider the
whole buying process rather than just the purchase decision (when it may be too late for a business to
influence the choice!)

The model implies that customers pass through all stages in every purchase. However, in more routine
purchases, customers often skip or reverse some of the stages.

For example, a student buying a favourite hamburger would recognise the need (hunger) and go right
to the purchase decision, skipping information search and evaluation. However, the model is very
useful when it comes to understanding any purchase that requires some thought and deliberation.

The buying process starts with need recognition. At this stage, the buyer recognises a problem or need
(e.g. I am hungry, we need a new sofa, I have a headache) or responds to a marketing stimulus (e.g.
you pass Starbucks and are attracted by the aroma of coffee and chocolate muffins).

An “aroused” customer then needs to decide how much information (if any) is required. If the need is
strong and there is a product or service that meets the need close to hand, then a purchase decision is
likely to be made there and then. If not, then the process of information search begins.

A customer can obtain information from several sources:

• Personal sources: family, friends, neighbours etc
• Commercial sources: advertising; salespeople; retailers; dealers; packaging; point-of-sale displays
• Public sources: newspapers, radio, television, consumer organisations; specialist magazines
• Experiential sources: handling, examining, using the product

The usefulness and influence of these sources of information will vary by product and by customer.
Research suggests that customers value and respect personal sources more than commercial sources
(the influence of “word of mouth”). The challenge for the marketing team is to identify which
information sources are most influential in their target markets.

In the evaluation stage, the customer must choose between the alternative brands, products and
services.

How does the customer use the information obtained?

An important determinant of the extent of evaluation is whether the customer feels “involved” in the
product. By involvement, we mean the degree of perceived relevance and personal importance that
accompanies the choice.

Where a purchase is “highly involving”, the customer is likely to carry out extensive evaluation.

High-involvement purchases include those involving high expenditure or personal risk – for example
buying a house, a car or making investments.

Low involvement purchases (e.g. buying a soft drink, choosing some breakfast cereals in the
supermarket) have very simple evaluation processes.

Why should a marketer need to understand the customer evaluation process?

The answer lies in the kind of information that the marketing team needs to provide customers in
different buying situations.

In high-involvement decisions, the marketer needs to provide a good deal of information about the
positive consequences of buying. The sales force may need to stress the important attributes of the
product, the advantages compared with the competition; and maybe even encourage “trial” or
“sampling” of the product in the hope of securing the sale.

Post-purchase evaluation - Cognitive Dissonance

The final stage is the post-purchase evaluation of the decision. It is common for customers to
experience concerns after making a purchase decision. This arises from a concept that is known as
“cognitive dissonance”. The customer, having bought a product, may feel that an alternative would
have been preferable. In these circumstances that customer will not repurchase immediately, but is
likely to switch brands next time.

To manage the post-purchase stage, it is the job of the marketing team to persuade the potential
customer that the product will satisfy his or her needs. Then after having made a purchase, the
customer should be encouraged that he or she has made the right decision.
The Kendric, Smith & Partners approach to market segmentation places consumers
into relatively discrete groupings - or "segments" - based on maximum
commonalityamong members within each group while, at the same time,
achieving maximum differentiation or dissimilarity between groups. Values and
beliefs about usage of your product or service represents the most fertile ground for
achieving maximum commonality within groups while achieving maximum
differentiation between market segments. In effective market
segmentation, differences in values and beliefs serve to reflect the differences in
consumption behaviour that distinguish market segments.

Attitudes toward product features and benefits are a direct reflection of values and
beliefs in a product category. As such, it is important to know the degree to which
product features and benefits actually drive brand choice within each segment.
Reflecting these factors, segmentation research done by Kendric, Smith &
Partners offers a number of important benefits...

• It provides knowledge of distinguishing values and beliefs about product usage

that can translate into meaningful market segments.
• It provides knowledge of the relative importance of product features and
benefits as determinants of brand choice behaviour, within market segments.
• It provides insight into the distinguishing socio-demographic, psychographic
and life-style characteristics that underlie the values and beliefs and the
product-usage behaviour of defined market segments.
• It identifies optimum positioning criteria and communications strategy for
differentiated market segments.

Typical Research INSIGHTS...

Insight from this type of enquiry - when carried out by Kendric, Smith & Partners - is
typically as follows:

1. Identification of product-related and product-usage attitudes,

values and beliefs, with this insight forming the basis of understanding
product-category usage and brand choice.
2. Identification and definition of product-category purchase and
usage behaviour patterns, so that differences between market
segments can be profiled.
3. A broad base of socio-demographic data, so that socio-
demographic differences between segments become evident.
4. Psychographic and lifestyle information, with knowledge in this
area providing one of the keys to understanding and changing values
and beliefs and consumption behaviour on a differentiated market-
segment basis.
5. Descriptions of segments, based on differing product-usage
values and beliefs, psychographics and demographics in a way that
provides understanding of behaviour and, thus, enables prediction and
manipulation of behaviour.
6. Identification of the size of each market segment, in terms of
proportion of population and proportion of consumption, so that the
relative importance of each market segment is understood.
 7. Features and benefits that are prime drivers of brand
choice within each market segment.
8. Definition of the image of client and competitive brands against
determinants of brand choice within each market segment.
9. Definition of the competitively strong and competitively weak
client and competitive brands within each market segment.
10. A defined positioning strategy for the client brand line that
optimizes its competitive position.
11. A defined communications strategy to support each client
brand for optimum positioning in target market segments.

Benefits of Our Segmentation Apporach

Using Kendric, Smith & Partners to define the segment structure of your market
offers unique benefits...

• We identify the values and beliefs that distinguish each market segment.

• We identify the features-and-benefits attributes that drive brand choice in each

market segment.

• We identify the strengths and weaknesses of competing brands - yours and

your competitors - against drivers of brand choice, in each market segment.

• We show you the cause-effect relationships between values and beliefs,

brand-choice drivers, socio-demographic characteristics and psychographic
characteristics within each market segment.

• We humanize and personalize each market segment, with a first-person

profile of the values and beliefs, the personality and psychology and the socio-
demographic characteristics that distinguish it from other segments.

• We identify surrogate demographic or behavioural characteristics that are

most characteristic of each market segment so that they are "visible" to the
various marketing functions.

• We define a brand positioning strategy with positioning criteria for your product
line, including precise communications objectives that have maximum
competitive appeal for each market segment.

• We translate positioning strategy and communications objectives into

descriptive segment guidelines for use by each functional element in the
marketing mix (brand management, advertising, promotion, direct marketing,
direct sales, etc.).

In Summary

We provide you with complete and comprehensive market definition that can become
the foundation of your strategic marketing business plan. The unique insights that are
gained from a Kendric, Smith & Partners market segmentation study will show you
the way to achieve the ultimate marketing goal of enhancing or changing buying
behaviour to your competitive advantage.

40 Boteler Street, Suite 202, Ottawa, Ontario, Canada, K1N 9C8

Toll Free: 1-800-825-2290 Tel: (613) 594-2863 Fax: (613) 233-9527

Email: info@KendricSmith.com
Your Selling
Axis
The Adaptation process – the Australian way

From the information provided through our WebPages YOUR NICHE and YOUR
NETWORK it is apparent that we need to find the Australian way of selling our
services. Australian based Keith Dugdale and David Lambert has documented their
selling experience after spending more than 20 years local and abroad. They also
developed a unique behavioural style instrument that will score your essential traits
when selling. These traits are: Leading / Following, Opportunity / Fear, Trust /
Control, Other’s needs / Own needs, Feeling / Facts, Free Flow/ Organised, My
best / Better than you, Overall picture / Detail. They call it a Partner Relationship
and this is exactly how you will experience the Australian way.

A summary of the Partner Relationship method:

• Know your natural selling behaviour style; learn to understand before being
understood, listen but also speak up, delay taking action, and never to offer a
proposal unless asked.
• Recognise that each prospect has a different personality, buying style and
need, give control of content and time to the buyer, don’t assume but ask,
remember that even if the prospect don’t need your offering they could value
your input – be around, reward the prospect for the time they invest to see
you, match and mirror the buyer’s behaviour to build rapport, understand the
relationship you have from buyers perspective and aim for a partner
relationship
• Understand that there is a process that can help you to pass over control to
the prospect (you may find this a challenge), a process to use behavioural
based questions that will enable you to reveal the real needs and forms that
can help you to capture the prospect’s needs in relation with how they deal
with challenges currently, what the desired outcome should be when the
challenge has been resolved and the value to the prospect and the business
when the challenge has been resolved. Understand the power of story telling
and how it provides credibility. Know how to capture real needs and how the
process can help to build rapport.

Your own selling style

From the WebPages mentioned you now know where the invisible market is, you
know something about your own niche and you have started to network. The
simplified diagram below will help you to identify your selling behaviour style. It
shows typical scores for selling behaviour traits. The best result is obtained when
you ask others to evaluate you as well. A very high score is depicted by ++ and a
very low score by a--, with more levels in between. To build solid Partner
Relationships a preferred pattern for emotion (feeling), needs and trust is a +.