Marketing Management (UNIT II)

What is Consumer Behavior in Marketing?

Marketing is so much more than creating a catchy phrase or a jingle people will sing for days. Understanding consumer behavior is a vital aspect of marketing. Consumer behavior is the study of how people make decisions about what they buy, want, need, or act in regards to a product, service, or company. It is critical to understand consumer behavior to know how potential customers will respond to a new product or service. It also helps companies identify opportunities that are not currently met.
A recent example of a change in consumer behavior is the eating habits of consumers that dramatically increased the demand for gluten-free (GF) products. The companies that monitored the change in eating patterns of consumers created GF products to fill a void in the marketplace. However, many companies did not monitor consumer behavior and were left behind in releasing GF products. Understanding consumer behavior allowed the pro-active companies to increase their market share by anticipating the shift in consumer wants.

The Three Factors

To fully understand how consumer behavior affects marketing, it's vital to understand the three factors that affect consumer behavior: psychological, personal, and social.
Psychological Factors
In daily life, consumers are being affected by many issues that are unique to their thought process. Psychological factors can include perception of a need or situation, the person's ability to learn or understand information, and an individual's attitude. Each person will respond to a marketing message based on their perceptions and attitudes. Therefore, marketers must take these psychological factors into account when creating campaigns, ensuring that their campaign will appeal to their target audience.
Personal Factors
Personal factors are characteristics that are specific to a person and may not relate to other people within the same group. These characteristics may include how a person makes decisions, their unique habits and interests, and opinions. When considering personal factors, decisions are also influenced by age, gender, background, culture, and other personal issues.
For example, an older person will likely exhibit different consumer behaviors than a younger person, meaning they will choose products differently and spent their money on items that may not interest a younger generation.
Social Factors
The third factor that has a significant impact on consumer behavior is social characteristics. Social influencers are quite diverse and can include a person's family, social interaction, work or school communities, or any group of people a person affiliates with. It can also include a person's social class, which involves income, living conditions, and education level. The social factors are very diverse and can be difficult to analyze when developing marketing plans.
However, it is critical to consider the social factors in consumer behavior, as they greatly influence how people respond to marketing messages and make purchasing decisions. For example, how using a famous spokesperson can influence buyers.

5 steps to understanding your customer’s buying process

 

1. Problem/need recognition

This is often identified as the first and most important step in the customer’s decision process. A purchase cannot take place without the recognition of the need. The need may have been triggered by internal stimuli (such as hunger or thirst) or external stimuli (such as advertising or word of mouth).

2. Information search

Having recognised a problem or need, the next step a customer may take is the information search stage, in order to find out what they feel is the best solution. This is the buyer’s effort to search internal and external business environments, in order to identify and evaluate information sources related to the central buying decision. Your customer may rely on print, visual, online media or word of mouth for obtaining information.

3. Evaluation of alternatives

As you might expect, individuals will evaluate different products or brands at this stage on the basis of alternative product attributes – those which have the ability to deliver the benefits the customer is seeking. A factor that heavily influences this stage is the customer’s attitude. Involvement is another factor that influences the evaluation process. For example, if the customer’s attitude is positive and involvement is high, then they will evaluate a number of companies or brands; but if it is low, only one company or brand will be evaluated.

4. Purchase decision

The penultimate stage is where the purchase takes place. Philip Kotler (2009) states that the final purchase decision may be ‘disrupted’ by two factors: negative feedback from other customers and the level of motivation to accept the feedback. For example, having gone through the previous three stages, a customer chooses to buy a new telescope. However, because his very good friend, a keen astronomer, gives him negative feedback, he will then be bound to change his preference. Furthermore, the decision may be disrupted due to unforeseen situations such as a sudden job loss or relocation.

5. Post-purchase behaviour

In brief, customers will compare products with their previous expectations and will be either satisfied or dissatisfied. Therefore, these stages are critical in retaining customers. This can greatly affect the decision process for similar purchases from the same company in the future, having a knock-on effect at the information search stage and evaluation of alternatives stage. If your customer is satisfied, this will result in brand loyalty, and the Information search and Evaluation of alternative stages will often be fast-tracked or skipped altogether.

  Four types of buying behaviour

1. Complex Buying Behaviour:

Consumers go through complex buying behaviour when they are highly involved in a purchase and aware of significant differences among brands. Consumers are highly involved when the product is expensive, bought infrequently, risky and highly self-expressive. Typically the consumer does not know much about the product category and has much to learn. F01 example, a person buying a personal computer may not know what attribute to look for. Many of the product features like “16K.memory” “disc storage”, “screen resolution” carry no meaning to him or her.

This buyer will pass through a learning process characterized by first developing beliefs about the product, then attitudes, and then making a thoughtful purchase choice. The marketer of a high-involvement product must understand the information-gathering and evaluation behaviour of high-involvement consumers.
The marketer needs to develop strategies that assist the buyer in learning about the attributes of the product class, their relative importance, and the high standing of the company’s brand on the more important attributes. The marketer needs to differentiate the brand’s features, use mainly print media and long copy to describe the brand’s benefits, and motivate store sales personnel and the buyer’s acquaintances to influence the final brand choice.

2. Dissonance-Reducing Buying Behaviour:

Sometimes the consumer is highly, involved in a purchase but sees little difference in the brands. The high involvement is again based on the fact that the purchase is expensive, infrequent, and risky. In this case, the buyer will shop around to learn what is, available but will buy fairly quickly because brand differences are not pronounced. The buyer may respond primarily to a good price or to purchase convenience.
After the purchase, the consumer might experience dissonance that stems from noticing certain disquieting features of the product or hearing favourable things about other brands. The consumer will be alert to information that might justify his or her decision. The consumer will first act, then acquire new beliefs and end up with a set of attitudes. Here marketing communications should aim to supply beliefs and evaluations that help the consumer feel good about his or her brand choice.

3. Habitual Buying Behaviour:

Many products are bought under conditions of low consumer involvement and the absence of significant brand differences. Consider the purchase of salt. Consumers have little involvement in this product category. They go to the store and reach for the brand. If they keep reaching for the same brand, it is out of habit, not strong brand loyalty.
There is good evidence that consumers have low involvement with most low-cost, frequently purchased products. Consumer behaviour in these cases does not pass through the normal belief/attitude/behaviour sequence. Consumers do not search extensively for information about the brands, evaluate their characteristics, and make a weighty decision on which brand to buy.
Instead, they are passive recipients of information as they watch television or see print ads. Ad repetition creates brand familiarity rather than brand conviction. Consumers do not form a strong attitude towards a brand but select it because it is familiar. After purchase, they may not even evaluate the choice because they are not highly involved with the product. So the buying process is brand beliefs formed by passive learning, followed by purchase behaviour, which may be followed by evaluation.
Marketers of low-involvement products with few brand differences find it effective to use price and sales promotions to stimulate product trial, since buyers are not highly committed to any brand. In advertising a low-involvement product, a number of things should be observed. The ad copy should stress only a few key points Visual symbols and Imagery are important because they can easily be remembered and associated with the brand.
The ad campaigns should go for high repetition with short- duration messages. Television is more effective than print media because it is a low-involvement medium that is suitable for passive learning. Advertising planning should be based on classical conditioning theory where the buyer learns to identify a certain product by a symbol that is repeatedly attached to it.

Marketers can try to convert the low-involvement product into one of higher involvement. The ways are:
i. This can be accomplished by linking the product to some involving issue, as when Crest toothpaste is linked to avoiding cavities.
ii. The product can be linked to some involving personal situation, for instance, by advertising a coffee brand early in the morning when the consumer wants to shake oft sleepiness.
iii. The advertising might seek to trigger strong emotions related to personal values or ego defense.
iv. An important product feature might be added to a low-involvement product, such as by fortifying a plain drink with vitamins,
These strategies at best raise consumer involvement from a low to a moderate level, they do not propel the consumer into highly involved buying behaviour.

4. Variety-Seeking Buying Behaviour:

Some buying situations are characterised by low consumer involvement but significant brand differences. Here consumers are often observed to do a lot of brand’ switching. An example occurs in purchasing cookies. The consumer has some beliefs, chooses a brand of cookies without much evaluation, and evaluates it during consumption. But next time, the consumer may reach for another brand out of boredom or a wish for a different taste. Brand switching occurs for the sake of variety rather than dissatisfaction.
The marketing strategy is different for the market leader and the minor brands in this product category. The market leader will try to encourage habitual buying behavior by dominating the shelf space, avoiding out-of-stock conditions, and sponsoring frequent reminder advertising. Challenger firms will encourage variety seeking by offering lower prices, deals, coupons, free samples and advertising that presents reasons for trying something new.