CONSUMER BUYING ‎BEHAVIOR

CONSUMER BUYING ‎BEHAVIOR

• 1.
  Marketing Management (5565)-2018 CONSUMERBUYING BEHAVIOR INTRODUCTION Definitions: Consumer behavior: “The study of how individuals, groups, and organizations elect, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants”. (Kotler & Keller, 2012) Consumer buying behavior “The buying behavior of final consumers — individuals and households that buy goods and services for personal consumption”. (Kotler & Armstrong, 2018) TYPES OF CONSUMER BUYING DECISION BEHAVIOR Buying behavior differs greatly for a tube of toothpaste, a smartphone, financial services, and a new car. More complex decisions usually involve more buying participants and more buyer deliberation. Figure below shows the types of consumer buying behavior based on the degree of buyer involvement and the degree of differences among brands. (Kotler & Armstrong, 2018)  COMPLEX BUYING BEHAVIOR Complex buying behavior “Consumer buying behavior in situations characterized by high consumer involvement in a purchase and significant perceived differences among brands.” Consumers may be highly involved when the product is expensive, risky, purchased infrequently, and highly self-expressive. Typically, the consumer has much to learn about the product category. For example, someone buying a new car might not know what models, attributes, and accessories
• 2.
  Marketing Management (5565)-2018 toconsider or what prices to expect. This buyer will pass through a learning process, first developing beliefs about the product, then attitudes, and then make a thoughtful purchase choice.  DISSONANCE-REDUCING BUYING BEHAVIOR Dissonance-Reducing Buying Behavior: “Consumer buying behavior in situations characterized by high involvement but few perceived differences among brands.” Dissonance-reducing buying behavior occurs when consumers are highly involved with an expensive, infrequent, or risky purchase but see little difference among brands. For example, consumers buying carpeting may face a high-involvement decision because carpeting is expensive and self-expressive. Yet buyers may consider most carpet brands in a given price range to be the same. In this case, because perceived brand differences are not large, buyers may shop around to learn what is available but buy relatively quickly. They may respond primarily to a good price or purchase convenience.  HABITUAL BUYING BEHAVIOR Habitual buying behavior: “Consumer buying behavior in situations characterized by low consumer involvement and few significant perceived brand differences”. Habitual buying behavior occurs under conditions of low-consumer involvement and little significant brand difference. For example, take table salt. Consumers have little involvement in this product category—they simply go to the store and reach for a brand. If they keep reaching for the same brand, it is out of habit rather than strong brand loyalty. Consumers appear to have low involvement with most low-cost, frequently purchased products. In such cases, consumer behavior does not pass through the usual belief-attitude-behavior sequence. Consumers do not search extensively for information about the brands, evaluate brand characteristics, and make weighty decisions about which brands to buy. Because they are not highly involved with the product, consumers may not evaluate the choice, even after purchase. Thus, the buying process involves brand beliefs formed by passive learning, followed by purchase behavior, which may or may not be followed by evaluation.  VARIETY-SEEKING BUYING BEHAVIOR Variety-seeking buying behavior: “Consumer buying behavior in situations characterized by low consumer involvement but significant perceived brand differences”. Consumers undertake variety-seeking buying behavior in situations characterized by low consumer involvement but significant perceived brand differences. In such cases, consumers often do a lot of brand switching. For example, when buying cookies, a consumer may hold some beliefs, choose a cookie brand without much evaluation, and then evaluate that brand during consumption. But the next time, the consumer might pick another brand out of boredom or simply to try something different. Brand switching occurs for the sake of variety rather than because of dissatisfaction. (Kotler & Armstrong, 2018)
• 3.
  Marketing Management (5565)-2018 STEPSIN CONSUMER BUYING DECISION PROCESS Now that we have looked at the influences that affect buyers, we are ready to look at how consumers make buying decisions. Consumer buying decision process consists of five stages: 1. need recognition, 2. information search, 3. evaluation of alternatives, 4. the purchase decision, and 5. postpurchase behavior. The buying process starts long before the actual purchase and continues long after. Marketers need to focus on the entire buying process rather than on the purchase decision only. Above Figure suggests that consumers pass through all five stages with every purchase in a considered way. But consumers may pass quickly or slowly through the buying decision process. And in more routine purchases, consumers often skip or reverse some of the stages. It mostly depends on the nature of the consumer, the product, and the buying situation. (Kotler & Armstrong, 2018)  NEED RECOGNITION The buying process starts with need recognition—the buyer recognizes a problem or need. The need can be triggered by internal stimuli when one of the person’s normal needs—for example, hunger or thirst—rises to a level high enough to become a drive. A need can also be triggered by external stimuli. For example, an advertisement or a discussion with a friend might get you thinking about buying a new car. (Kotler & Armstrong, 2018)  INFORMATION SEARCH An interested consumer may or may not search for more information. If the consumer’s drive is strong and a satisfying product is near at hand, he or she is likely to buy it then. If not, the consumer may store the need in memory or undertake an information search related to the need. For example, once you’ve decided you need a new car, at the least, you will probably pay more attention to car ads, cars owned by friends, and car conversations. Or you may actively search online, talk with friends, and gather information in other ways. (Kotler & Keller, 2012)
• 4.
  Marketing Management (5565)-2018 InformationSources: Major information sources to which consumers will turn fall into four groups: • Personal. Family, friends, neighbors, acquaintances • Commercial. Advertising, Web sites, salespersons, dealers, packaging, displays • Public. Mass media, consumer-rating organizations • Experiential. Handling, examining, using the product The relative influence of these information sources varies with the product and the buyer. Search Dynamics: By gathering information, the consumer learns about competing brands and their features. The first box in Figure below shows the total set of brands available. The individual consumer will come to know a subset of these, the awareness set. Only some, the consideration set, will meet initial buying criteria. As the consumer gathers more information, just a few, the choice set, will remain strong contenders. The consumer makes a final choice from these. (Kotler & Keller, 2012)  EVALUATION OF ALTERNATIVES Mostly consumers do not use a simple and single evaluation process in all buying situations. Instead, several evaluation processes are at work. How consumers go about evaluating purchase alternatives depends on the individual consumer and the specific buying situation. In some cases, consumers use careful calculations and logical thinking. At other times, the same consumers do little or no evaluating. Instead, they buy on impulse and rely on intuition. Sometimes consumers make buying decisions on their own; sometimes they turn to friends, online reviews, or salespeople for buying advice. Suppose you’ve narrowed your car choices to three brands. And suppose that you are primarily interested in four attributes—price, style, operating economy, and performance. By this time, you’ve probably formed beliefs about how each brand rates on each attribute. Clearly, if one car rated best on all the attributes, the marketer could predict that you would choose it. However, the brands will no doubt vary in appeal. You might base your buying decision mostly on one attribute, and your choice would be easy to predict. If you wanted style above everything else,
• 5.
  Marketing Management (5565)-2018 youwould buy the car that you think has the most style. But most buyers consider several attributes, each with different importance. By knowing the importance that you assigned to each attribute, the marketer could predict and affect your car choice more reliably. Marketers should study buyers to find out how they actually evaluate brand alternatives. If marketers know what evaluative processes go on, they can take steps to influence the buyer’s decision. (Kotler & Armstrong, 2018)  PURCHASE DECISION In the evaluation stage, the consumer ranks brands and forms purchase intentions. Generally, the consumer’s purchase decision will be to buy the most preferred brand, but two factors can come between the purchase intention and the purchase decision. The first factor is the attitudes of others. If someone important to you thinks that you should buy the lowest-priced car, then the chances of you buying a more expensive car are reduced. The second factor is unexpected situational factors. The consumer may form a purchase intention based on factors such as expected income, expected price, and expected product benefits. However, unexpected events may change the purchase intention. For example, the economy might take a turn for the worse, a close competitor might drop its price, or a friend might report being disappointed in your preferred car. Thus, preferences and even purchase intentions do not always result in an actual purchase choice. (Kotler & Armstrong, 2018)  POSTPURCHASE BEHAVIOR After the purchase, the consumer might experience dissonance from noticing certain disquieting features or hearing favorable things about other brands and will be alert to information that supports his or her decision. Marketing communications should supply beliefs and evaluations that reinforce the consumer’s choice and help him or her feel good about the brand. The marketer’s job therefore doesn’t end with the purchase. Marketers must monitor postpurchase satisfaction, postpurchase actions, and postpurchase product uses and disposal. Postpurchase Satisfaction: Satisfaction is a function of the closeness between expectations and the product’s perceived performance. If performance falls short of expectations, the consumer is disappointed; if it meets expectations, the consumer is satisfied; if it exceeds expectations, the consumer is delighted. These feelings make a difference in whether the customer buys the product again and talks favorably or unfavorably about it to others. The larger the gap between expectations and performance, the greater the dissatisfaction. Here the consumer’s coping style comes into play. Some consumers magnify the gap when the product isn’t perfect and are highly dissatisfied; others minimize it and are less dissatisfied. Postpurchase Actions: A satisfied consumer is more likely to purchase the product again and will also tend to say good things about the brand to others. Dissatisfied consumers may abandon or return the product. They may seek information that confirms its high value. They may take public action by complaining to the company, going to a lawyer, or complaining to other groups (such as business, private, or government agencies). Private actions include deciding to stop buying the product (exit option) or warning friends (voice option).
• 6.
  Marketing Management (5565)-2018 PostpurchaseUses and Disposal: Marketers should also monitor how buyers use and dispose of the product. A key driver of sales frequency is product consumption rate—the more quickly buyers consume a product, the sooner they may be back in the market to repurchase it. Consumers may fail to replace some products soon enough because they overestimate product life. One strategy to speed replacement is to tie the act of replacing the product to a certain holiday, event, or time of year. (Kotler & Keller, 2012) If consumers throw the product away, the marketer needs to know how they dispose of it, especially if—like batteries, beverage containers, electronic equipment, and disposable diapers— it can damage the environment. So some markets offer replacement policies as well. CONSUMER DECISION PROCESS FOR NEW PRODUCTS A new product is a good, service, or idea that is perceived by some potential customers as new. It may have been around for a while, but our interest is in how consumers learn about products for the first time and make decisions on whether to adopt them. Adoption process is the mental process through which an individual passes from first learning about an innovation to final adoption. Adoption is the decision by an individual to become a regular user of the product. Consumers go through five stages in the process of adopting a new product: Awareness. The consumer becomes aware of the new product but lacks information about it. Interest. The consumer seeks information about the new product. Evaluation. The consumer considers whether trying the new product makes sense. Trial. The consumer tries the new product on a small scale to improve his or her estimate of its value. Adoption. The consumer decides to make full and regular use of the new product. This model suggests that marketers should think about how to help consumers move through these stages.
• 7.
  Marketing Management (5565)-2018 Forexample, if a company finds that many consumers are considering its products but are still tentative about buying one, it might offer sales prices or special promotions that help get consumers over the decision hump. To help car buyers past purchase-decision hurdles following the economic meltdown in 2008, Hyundai offered a unique Hyundai Assurance Plan. It promised buyers who financed or leased new Hyundais that they could return them at no cost and with no harm to their credit rating if they lost their jobs or incomes within a year. Sales of the Hyundai Sonata surged 85 percent in the month following the start of the campaign. (Kotler & Armstrong, 2018) CONSUMER BUYING-BEHAVIOUR Example - Educational Institute  In an educational institute …  Products are services & knowledge to educate  Consumers are students  Steps involved in consumer-buying behavior are:  need recognition,  information search,  evaluation of alternatives,  the purchase decision, and  postpurchase behavior The educational institutions offer services / knowledge as their product to educate students. So, the students act as “consumers.” Student of today makes careful decisions about which educational institution to join, how much to pay, which discipline/field to adopt and what subject to study, etc. In which discipline of interest a student wants to get higher education, is need recognition. The student search and gather information from multiple educational institutions on his/her area of subject. For example student wants to get admission in an engineering college/university. He/she will search & gather information from many sources, including reference groups, family members who already study or are alumni of a engineering institution. Admission advertising on public media and social media including institution’s web sites, also play role in providing information & consumer reviews. The information will include… discipline available, faculty and department of study, accreditation, cost, course flexibility, location of the university, admission criteria, graduation rate, campus facilities, academic support, financial aid, practical training, university size, job placements, career services, co- curricular activities, safety, alumni network... etc. Then the student will evaluate all the alternatives for applying for admission. This step may include multiple choices to apply in more than one institution to compete with other students (customers). After the admission test result the student make a decision to take admission in one most suitable and relevant educational institution. Postpurchase behavior (satisfaction or dissatisfaction) starts when the student goes through the study/education process. Due to some reasons student may change or transfer to other college/university as well.
• 8.
  Marketing Management (5565)-2018 CONCLUSION Buyingbehavior may vary greatly across different types of products and buying decisions. Consumers undertake complex buying behavior when they are highly involved in a purchase and perceive significant differences among brands. Dissonance-reducing behavior occurs when consumers are highly involved but see little difference among brands. Habitual buying behavior occurs under conditions of low involvement and little significant brand difference. In situations characterized by low involvement but significant perceived brand differences, consumers engage in variety-seeking buying behavior. When making a purchase, the buyer goes through a decision process consisting of need recognition, information search, evaluation of alternatives, purchase decision, and postpurchase behavior. The marketer’s job is to understand the buyer’s behavior at each stage and the influences that are operating. During need recognition, the consumer recognizes a problem or need that could be satisfied by a product or service in the market. Once the need is recognized, the consumer is aroused to seek more information and moves into the information search stage. With information in hand, the consumer proceeds to alternative evaluation, during which the information is used to evaluate brands in the choice set. From there, the consumer makes a purchase decision and actually buys the product. In the final stage of the buyer decision process, postpurchase behavior, the consumer takes action based on satisfaction or dissatisfaction. (Kotler & Armstrong, 2018) REFERENCES Kotler, P. & Armstrong, G. (2018). Principles of marketing, 17th global ed. Harlow: Pearson Education. Kotler, P. & Kotler, K. (2012). Marketing management. 14th ed. Boston: Prentice Hall.