Analyzing Consumer Behaviour

The Difference Between

Consumer Buyer Behaviour The buying behaviour of final consumers individuals and households who buy goods and services for personal consumption

Business Buyer Behaviour The buyer behaviour of organisations that buy goods and services for use in the production of other products and services or for the purpose of reselling or renting them to others at a profit

2000 Prentice Hall

Pearson Education 2009

Case Study
Harley-Davidson Devoted Consumers
Building Success

Measuring Success

Offers good bikes, upgraded showrooms, and revised sales tactics. Consumer emotions, motivations, and lifestyle research has been translated into effective advertising. Harley riders are fiercely loyal to the brand, older, better educated, affluent.

Currently has 26% of all U.S. bike sales and 50% of heavyweight segment. Demand outstripped supply for several years; waits of up to 2 years for popular models. Annual revenues/earnings have grown at 14% to 23% over past 10 years. 2007: 21st straight year of record sales and income.

2000 Prentice Hall

Understanding Customers: The Key Questions

Where do they buy?

Who is important?

What are their choice Criteria?

Customers

How do they buy?

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When do they buy?

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Simple Response Model

Stimulus

Organism

Response

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Factors Influencing Consumer Behaviour - Process

Psychology

Stimuli
Marketing and other Stimuli
Marketing
e.g. Product

Process [Black Box]

Buyer [Black Box]

Response

Marketing

Response

Promotion

Other
e.g. Economic Cultural
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Characteristics and decision making process

Product choice Brand choice Dealer choice Purchase timing Amount

Pearson Education 2009

Factors Influencing Consumer Behaviour - Context

Buyer Cultural
Culture Sub-culture Social class

Social
Reference groups Family Roles and status

Personal
Age and lifestyle Occupation Economic situation Personality and selfconcept

Psychological
Motivation Perception Learning Beliefs and attitudes

2000 Prentice Hall

Pearson Education 2009

Psychological Factors

Motivation Beliefs & Attitudes Perception

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Learning

Maslows Hierarchy of Needs

5
Selfactualization
(self-development and realization)

4 Esteem needs
(self-esteem, recognition)

Social needs 3 (sense of belonging, love)

Safety needs (security, protection)

Psychological needs (food, water, shelter)

1
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Social Factors

Reference Groups

Family

Roles & Statuses

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Influences on Consumer Behavior

Personal Influences
Age and Family Life Cycle Stage
Occupation & Economic Circumstances Lifestyle Personality & Self-Concept

2000 Prentice Hall

Four Types of Buying Behavior

High Involvement Significant differences between brands Few differences between brands Low Involvement

Complex Buying Behavior DissonanceReducing Buying Behavior

VarietySeeking Behavior Habitual Buying Behavior

2000 Prentice Hall

Classic Model of Consumer Buying Behaviour

Problem recognition
Information search Evaluation of alternatives Purchase decision Postpurchase behavior
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Problem Recognition
Awareness of Problem/Need Raised by: Routine depletion Change in circumstances Problem Perceived as the difference between current and desired situation The Role of Advertising Sometimes, potential customers become aware of their problem

Pearson Education 2009

2000 Prentice Hall

Information Search
Involves the Identification of Alternative Solutions by Searching Internal search

Relevant

information from memory Role of advertising and branding

External search
Friends,

family, work colleagues Commercial sources - adverts,brochures salespeople

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Evaluation of Alternatives

Firstly
Reduction

of solutions to a manageable

shortlist

Evoked set
A

shortlist of brands for careful evaluation

Secondly: Ranking of the Evoked Set

Cost Availability

2000 Prentice Hall

Pearson Education 2009

Choice Criteria
Technical Economic Social Personal

Reliability

Price

Status

Self-image

Durability

Value for money

Social belonging

Risk reduction

Performance

Running costs

Convention

Ethics

Format

Residual value

Fashion

Emotions

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Pearson Education 2009

Decision Making Sets

Total Set Awareness Set

Consideration Set

Choice Set

Decision

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Steps Between Evaluation of Alternatives and a Purchase Decision

Evaluation of alternatives Attitude of others Purchase intention Unanticipated situational factors
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Purchase decision

Purchase
Selection of Quantity Quality Exact product characteristics Brand Retailer [e-Tailer] and method of payment The Transaction

2000 Prentice Hall

Pearson Education 2009

Post-Purchase Evaluation
Satisfaction Transaction Performance Durability Dis-satisfaction Cognitive dissonance

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What is Dissonance?
The Opposite of Satisfaction Often Occurs With Products that are: Expensive - car Difficult - many alternatives each with unique benefits - holidays Irrevocable - house-buying Individual Tendency to Experience Anxiety

Pearson Education 2009

2000 Prentice Hall

The Buyer Decision Process for New Products

Awareness The consumer becomes aware of the new product Interest The consumer seeks information about the new product Evaluation The consumer decides whether trying the new product makes sense Trial The consumer tries the new product on a small scale to improve his estimate of its value Adoption The consumer decides to make full and regular use of the new product
Pearson Education 2009

2000 Prentice Hall