Very Easy topic in Marketing

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Learning objectives:

• explain why marketers require a thorough understanding of consumer behaviour and its major influences
• understand the major group factors that influence consumer behaviour
• analyse the major individual factors that influence consumer behaviour
• explain the general steps in the consumer decision-making process.

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• We need to know the reasons behind the decisions consumers make — the what, why, how, when and where of their behaviours.
• Consumer behaviour is the term used to describe the analysis of the behaviour of individuals and households who buy goods and services for personal consumption.
• An understanding of consumer behaviour informs decisions including:
• what product attributes will appeal to customers
• how much value a product has for consumers, and hence how much they will be willing to pay for it
• the likely response to various promotional options
• where the consumer is likely to want to purchase the offering
• what the consumer expects from dealing with the organisation.
• We can identify a range of consumer decision-making behaviours, along a continuum from habitual decision-making at one end to extended decision-making at the other. For example, few consumers devote much time to choosing their next tube of toothpaste, but most consumers spend a lot of time deciding on a destination and itinerary for an overseas holiday.

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• We need to know the reasons behind the decisions consumers make — the what, why, how, when and where of their behaviours.
• Consumer behaviour is the term used to describe the analysis of the behaviour of individuals and households who buy goods and services for personal consumption.
• An understanding of consumer behaviour informs decisions including:
• what product attributes will appeal to customers
• how much value a product has for consumers, and hence how much they will be willing to pay for it
• the likely response to various promotional options
• where the consumer is likely to want to purchase the offering
• what the consumer expects from dealing with the organisation.
• We can identify a range of consumer decision-making behaviours, along a continuum from habitual decision-making at one end to extended decision-making at the other. For example, few consumers devote much time to choosing their next tube of toothpaste, but most consumers spend a lot of time deciding on a destination and itinerary for an overseas holiday.

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Influences on consumer behaviour

• The range of factors that may influence a consumer is virtually limitless and studying them systematically is a mammoth task.
• The key to this task is to develop an awareness and sensitivity to the issues that may influence an organisation’s target buyers. These influences may be:
• specific to a situation in which the consumer finds themselves
• related to group (social or cultural) factors
• unique to the individual.

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• Situational influences on consumer behaviour are simply the circumstances the consumer finds themselves in when they are making purchasing decisions. Some circumstances prompt purchasing decisions (for example, a headache prompts purchase of Panadol). Situational influences can also prompt people to decide not to make a purchase, for example, a favourite restaurant may be undergoing renovations.
• Situational influences may be classified as:
• physical: the location in which the purchase decision is made
• social: the interactions with others at the time the purchase decision is made
• time: the time available for a purchase decision
• motivational: the reasons for the purchase (e.g. a birthday present vs. something for yourself)
• mood: the mood of a person at the time of the purchase decision (e.g. a tired person may make a more impulsive decision).

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• Situational influences on consumer behaviour are simply the circumstances the consumer finds themselves in when they are making purchasing decisions. Some circumstances prompt purchasing decisions (for example, a headache prompts purchase of Panadol). Situational influences can also prompt people to decide not to make a purchase, for example, a favourite restaurant may be undergoing renovations.
• Situational influences may be classified as:
• physical: the location in which the purchase decision is made
• social: the interactions with others at the time the purchase decision is made
• time: the time available for a purchase decision
• motivational: the reasons for the purchase (e.g. a birthday present vs. something for yourself)
• mood: the mood of a person at the time of the purchase decision (e.g. a tired person may make a more impulsive decision).

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• Situational influences on consumer behaviour are simply the circumstances the consumer finds themselves in when they are making purchasing decisions. Some circumstances prompt purchasing decisions (for example, a headache prompts purchase of Panadol). Situational influences can also prompt people to decide not to make a purchase, for example, a favourite restaurant may be undergoing renovations.
• Situational influences may be classified as:
• physical: the location in which the purchase decision is made
• social: the interactions with others at the time the purchase decision is made
• time: the time available for a purchase decision
• motivational: the reasons for the purchase (e.g. a birthday present vs. something for yourself)
• mood: the mood of a person at the time of the purchase decision (e.g. a tired person may make a more impulsive decision).

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• Situational influences on consumer behaviour are simply the circumstances the consumer finds themselves in when they are making purchasing decisions. Some circumstances prompt purchasing decisions (for example, a headache prompts purchase of Panadol). Situational influences can also prompt people to decide not to make a purchase, for example, a favourite restaurant may be undergoing renovations.
• Situational influences may be classified as:
• physical: the location in which the purchase decision is made
• social: the interactions with others at the time the purchase decision is made
• time: the time available for a purchase decision
• motivational: the reasons for the purchase (e.g. a birthday present vs. something for yourself)
• mood: the mood of a person at the time of the purchase decision (e.g. a tired person may make a more impulsive decision).

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• Situational influences on consumer behaviour are simply the circumstances the consumer finds themselves in when they are making purchasing decisions. Some circumstances prompt purchasing decisions (for example, a headache prompts purchase of Panadol). Situational influences can also prompt people to decide not to make a purchase, for example, a favourite restaurant may be undergoing renovations.
• Situational influences may be classified as:
• physical: the location in which the purchase decision is made
• social: the interactions with others at the time the purchase decision is made
• time: the time available for a purchase decision
• motivational: the reasons for the purchase (e.g. a birthday present vs. something for yourself)
• mood: the mood of a person at the time of the purchase decision (e.g. a tired person may make a more impulsive decision).

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• Cultural factors are those influences on behaviours that operate at the level of the whole society or of major groups within society.
• In studying cultural factors, we seek to understand how large social groups — and thereby the individual members within them — behave.
• Concepts such as social class are of interest to marketers, when they can be used to explain or reliably predict buyer or consumer behaviour.
• Culture is the system of knowledge, beliefs, values, rituals and artefacts by which a society or other large group defines itself.
• Culture is multidimensional and includes both tangible and intangible elements:
• tangible elements include housing, clothing, food and artworks
• intangible elements include laws, religious beliefs, customs, education and institutions.
• Core cultural values are resistant to change. Consumers the world over may wear similar clothes with familiar brands, drive the same cars and buy the same consumer electronics products, and want to live in similar, modern housing — however, at the level of core cultural values, they may differ markedly.

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• Cultural factors are those influences on behaviours that operate at the level of the whole society or of major groups within society.
• In studying cultural factors, we seek to understand how large social groups — and thereby the individual members within them — behave.
• Concepts such as social class are of interest to marketers, when they can be used to explain or reliably predict buyer or consumer behaviour.
• Culture is the system of knowledge, beliefs, values, rituals and artefacts by which a society or other large group defines itself.
• Culture is multidimensional and includes both tangible and intangible elements:
• tangible elements include housing, clothing, food and artworks
• intangible elements include laws, religious beliefs, customs, education and institutions.
• Core cultural values are resistant to change. Consumers the world over may wear similar clothes with familiar brands, drive the same cars and buy the same consumer electronics products, and want to live in similar, modern housing — however, at the level of core cultural values, they may differ markedly.

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• Cultural factors are those influences on behaviours that operate at the level of the whole society or of major groups within society.
• In studying cultural factors, we seek to understand how large social groups — and thereby the individual members within them — behave.
• Concepts such as social class are of interest to marketers, when they can be used to explain or reliably predict buyer or consumer behaviour.
• Culture is the system of knowledge, beliefs, values, rituals and artefacts by which a society or other large group defines itself.
• Culture is multidimensional and includes both tangible and intangible elements:
• tangible elements include housing, clothing, food and artworks
• intangible elements include laws, religious beliefs, customs, education and institutions.
• Core cultural values are resistant to change. Consumers the world over may wear similar clothes with familiar brands, drive the same cars and buy the same consumer electronics products, and want to live in similar, modern housing — however, at the level of core cultural values, they may differ markedly.

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• Differences in national cultures have been measured by a number of researchers. Hofstede found that national cultures could be distinguished by variations across four dimensions that he described as follows:
• power distance: the degree of inequality among people that is acceptable within a culture. Asian societies score high in ‘power distance’, reflecting the greater extent of social inequality and the traditions that maintain this.
• uncertainty avoidance: the extent to which people in a culture feel threatened by uncertainty and rely on mechanisms to reduce it.
• individualism: the extent to which people focus on their own goals over those of the group. Western societies are generally ‘individualistic’, whereas Asian societies are more ‘collectivist’.
• masculinity: the extent to which traditionally masculine values (e.g. assertiveness, status and success) are valued over traditionally feminine values (e.g. solidarity, quality of life).
• Follow-up research in Asia identified a fifth dimension:
• long-term orientation: the extent to which a pragmatic, long-term orientation is valued over a short-term focus.

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• Differences in national cultures have been measured by a number of researchers. Hofstede found that national cultures could be distinguished by variations across four dimensions that he described as follows:
• power distance: the degree of inequality among people that is acceptable within a culture. Asian societies score high in ‘power distance’, reflecting the greater extent of social inequality and the traditions that maintain this.
• uncertainty avoidance: the extent to which people in a culture feel threatened by uncertainty and rely on mechanisms to reduce it.
• individualism: the extent to which people focus on their own goals over those of the group. Western societies are generally ‘individualistic’, whereas Asian societies are more ‘collectivist’.
• masculinity: the extent to which traditionally masculine values (e.g. assertiveness, status and success) are valued over traditionally feminine values (e.g. solidarity, quality of life).
• Follow-up research in Asia identified a fifth dimension:
• long-term orientation: the extent to which a pragmatic, long-term orientation is valued over a short-term focus.

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• A subculture is a group of individuals who differ on some dimensions from the culture in which they are immersed.
• Subcultures are usually identifiable based on differences in key demographic characteristics, such as age, ethnicity, geographic location or religious affiliation.
• Subcultures are important to marketers when their shopping and purchasing behaviours are significantly different from the remainder of the population, and they represent a distinct and commercially significant marketing opportunity.
• Within subcultures, members share common attitudes, values and behaviours that distinguish them from the broader culture. Subcultures represent large potential market segments, often with distinctive preferences and behaviours and strong group loyalty.

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• Social class: Most societies exhibit a social hierarchy, organised into social classes. A social class comprises individuals of similar social rank within the hierarchy. Social ranking forms the basis of social prestige and respect.
• An individual’s social class is defined by values and lifestyles, and often by indicators such as income, occupation and education.
• Socioeconomic status can often be a useful concept for marketers studying consumer behaviour, where the primary focus is on ‘purchasing power’ and not the source of income, which is implied in the social class construct.
• Conversely, social marketers often need to understand the behaviour of people at lower levels of socioeconomic status as this has been identified as a reliable predictor of individuals or groups who engage in high-risk social behaviours such as crime, violence, alcoholism, drug abuse and gambling.

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• Social class: Most societies exhibit a social hierarchy, organised into social classes. A social class comprises individuals of similar social rank within the hierarchy. Social ranking forms the basis of social prestige and respect.
• An individual’s social class is defined by values and lifestyles, and often by indicators such as income, occupation and education.
• Socioeconomic status can often be a useful concept for marketers studying consumer behaviour, where the primary focus is on ‘purchasing power’ and not the source of income, which is implied in the social class construct.
• Conversely, social marketers often need to understand the behaviour of people at lower levels of socioeconomic status as this has been identified as a reliable predictor of individuals or groups who engage in high-risk social behaviours such as crime, violence, alcoholism, drug abuse and gambling.

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• ‘Social psychology’ is focused on understanding how the group influences the behaviour of its individual members. Such influences are known as social factors.
• A reference group is any group to which an individual looks for guidance as to what are appropriate values, attitudes or behaviours.
• Group influence is particularly strong when the individual lacks previous experience and where behaviour carries a level of social risk.
• In a marketing context, if a consumer is contemplating purchasing a product for the first time, and where that product is socially conspicuous (e.g. clothing), the individual will look to the reference group to suggest and endorse the appropriate choice. For example, an individual may look to family, work or professional groups, sporting clubs, religious groups or civic organisations depending upon the particular behaviour or product category.
• Three major types of reference groups have been identified:
• Membership reference groups: Groups to which the individual belongs. Individuals take on the values, attitudes and behaviours that define members of the group.
• Aspirational reference groups: Groups of which the individual wishes to be a member. The individual is likely to mimic the values, attitudes and behaviours of the aspirational group.
• Dissociative reference groups: Groups with which an individual does not wish to be associated, or which the individual may wish to leave.
• A reference group can suggest information sources, the range of product alternatives and appropriate ways of evaluating and choosing between alternative products. The purchase of highly visible products such as clothing, cars, information technology and beverages is often strongly influenced by reference groups. For example, it is not important that you are buying a pair of shoes, but rather which brand of shoes you will buy.

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• ‘Social psychology’ is focused on understanding how the group influences the behaviour of its individual members. Such influences are known as social factors.
• A reference group is any group to which an individual looks for guidance as to what are appropriate values, attitudes or behaviours.
• Group influence is particularly strong when the individual lacks previous experience and where behaviour carries a level of social risk.
• In a marketing context, if a consumer is contemplating purchasing a product for the first time, and where that product is socially conspicuous (e.g. clothing), the individual will look to the reference group to suggest and endorse the appropriate choice. For example, an individual may look to family, work or professional groups, sporting clubs, religious groups or civic organisations depending upon the particular behaviour or product category.
• Three major types of reference groups have been identified:
• Membership reference groups: Groups to which the individual belongs. Individuals take on the values, attitudes and behaviours that define members of the group.
• Aspirational reference groups: Groups of which the individual wishes to be a member. The individual is likely to mimic the values, attitudes and behaviours of the aspirational group.
• Dissociative reference groups: Groups with which an individual does not wish to be associated, or which the individual may wish to leave.
• A reference group can suggest information sources, the range of product alternatives and appropriate ways of evaluating and choosing between alternative products. The purchase of highly visible products such as clothing, cars, information technology and beverages is often strongly influenced by reference groups. For example, it is not important that you are buying a pair of shoes, but rather which brand of shoes you will buy.

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• ‘Social psychology’ is focused on understanding how the group influences the behaviour of its individual members. Such influences are known as social factors.
• A reference group is any group to which an individual looks for guidance as to what are appropriate values, attitudes or behaviours.
• Group influence is particularly strong when the individual lacks previous experience and where behaviour carries a level of social risk.
• In a marketing context, if a consumer is contemplating purchasing a product for the first time, and where that product is socially conspicuous (e.g. clothing), the individual will look to the reference group to suggest and endorse the appropriate choice. For example, an individual may look to family, work or professional groups, sporting clubs, religious groups or civic organisations depending upon the particular behaviour or product category.
• Three major types of reference groups have been identified:
• Membership reference groups: Groups to which the individual belongs. Individuals take on the values, attitudes and behaviours that define members of the group.
• Aspirational reference groups: Groups of which the individual wishes to be a member. The individual is likely to mimic the values, attitudes and behaviours of the aspirational group.
• Dissociative reference groups: Groups with which an individual does not wish to be associated, or which the individual may wish to leave.
• A reference group can suggest information sources, the range of product alternatives and appropriate ways of evaluating and choosing between alternative products. The purchase of highly visible products such as clothing, cars, information technology and beverages is often strongly influenced by reference groups. For example, it is not important that you are buying a pair of shoes, but rather which brand of shoes you will buy.

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• An opinion leader is a reference group member who provides relevant and influential advice about a specific topic of interest to group members, regarded as an expert in a particular field or topic. Marketers will often attempt to identify opinion leaders and to influence them in their product attitudes and purchase behaviour.
• The concept of opinion leadership is often difficult to work with in practice because opinion leadership is typically situation- and product-specific.
• An opinion leader is likely to be of greatest influence in product categories where individuals are highly involved, but in which they lack knowledge.
• New products take time to develop popularity in the market. The way in which innovations are adopted can be described by the theory of diffusion of innovations.
• The theory suggests that the influence of social groups on the decisions made by individuals determines the way in which new products and ideas are adopted. Innovations are introduced and used by ‘innovators’, who make up only 2.5 per cent of the total population. They do not generally influence the adoption of innovations by the rest of society. Rather, consumers known as ‘early adopters’, who represent about 13.5 per cent of the population, tend to drive widespread adoption. The early adopters group includes the opinion leaders. Adoption by the opinion leaders then drives adoption by the ‘early majority’, who adopt the innovation earlier than average. The ‘late majority’ adopts the innovation later than average, reflecting their sceptical nature. The last group to adopt is known as the ‘laggards’, who are driven by tradition.
• The process is driven by social networks and communications. Because of the role of the opinion leader, this model implies that it is not necessary to direct a marketing message to the entire population; rather, it is more effective to address communication directly to the opinion leader in the hope that the idea will spread from them to the wider target population.

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• An opinion leader is a reference group member who provides relevant and influential advice about a specific topic of interest to group members, regarded as an expert in a particular field or topic. Marketers will often attempt to identify opinion leaders and to influence them in their product attitudes and purchase behaviour.
• The concept of opinion leadership is often difficult to work with in practice because opinion leadership is typically situation- and product-specific.
• An opinion leader is likely to be of greatest influence in product categories where individuals are highly involved, but in which they lack knowledge.
• New products take time to develop popularity in the market. The way in which innovations are adopted can be described by the theory of diffusion of innovations.
• The theory suggests that the influence of social groups on the decisions made by individuals determines the way in which new products and ideas are adopted. Innovations are introduced and used by ‘innovators’, who make up only 2.5 per cent of the total population. They do not generally influence the adoption of innovations by the rest of society. Rather, consumers known as ‘early adopters’, who represent about 13.5 per cent of the population, tend to drive widespread adoption. The early adopters group includes the opinion leaders. Adoption by the opinion leaders then drives adoption by the ‘early majority’, who adopt the innovation earlier than average. The ‘late majority’ adopts the innovation later than average, reflecting their sceptical nature. The last group to adopt is known as the ‘laggards’, who are driven by tradition.
• The process is driven by social networks and communications. Because of the role of the opinion leader, this model implies that it is not necessary to direct a marketing message to the entire population; rather, it is more effective to address communication directly to the opinion leader in the hope that the idea will spread from them to the wider target population.

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• An opinion leader is a reference group member who provides relevant and influential advice about a specific topic of interest to group members, regarded as an expert in a particular field or topic. Marketers will often attempt to identify opinion leaders and to influence them in their product attitudes and purchase behaviour.
• The concept of opinion leadership is often difficult to work with in practice because opinion leadership is typically situation- and product-specific.
• An opinion leader is likely to be of greatest influence in product categories where individuals are highly involved, but in which they lack knowledge.
• New products take time to develop popularity in the market. The way in which innovations are adopted can be described by the theory of diffusion of innovations.
• The theory suggests that the influence of social groups on the decisions made by individuals determines the way in which new products and ideas are adopted. Innovations are introduced and used by ‘innovators’, who make up only 2.5 per cent of the total population. They do not generally influence the adoption of innovations by the rest of society. Rather, consumers known as ‘early adopters’, who represent about 13.5 per cent of the population, tend to drive widespread adoption. The early adopters group includes the opinion leaders. Adoption by the opinion leaders then drives adoption by the ‘early majority’, who adopt the innovation earlier than average. The ‘late majority’ adopts the innovation later than average, reflecting their sceptical nature. The last group to adopt is known as the ‘laggards’, who are driven by tradition.
• The process is driven by social networks and communications. Because of the role of the opinion leader, this model implies that it is not necessary to direct a marketing message to the entire population; rather, it is more effective to address communication directly to the opinion leader in the hope that the idea will spread from them to the wider target population.

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• For most people, the social group with the most influence over their behaviour is the family. The direct family (parents and siblings) teaches the individual appropriate behaviours relating to purchasing and consuming products. This process starts when children are very young. The family life cycle describes the stages through which most families pass.
• Family consumption decisions can be categorised into four types:
• autonomic decisions: Most household products are typically purchased by either the husband or wife, including products such as the husband’s clothing, furniture, cosmetics, pharmaceuticals, household appliances, cars and holidays.
• wife-dominant decisions: Women still make the majority of household purchasing decisions related to food, health care, laundry and bathroom products, children’s clothing and kitchen products.
• husband-dominant decisions: A small range of products are traditionally purchased by men, including hardware and garage products.
• syncratic decisions: Some products are purchased by husband and wife acting jointly. Typically such decisions would be the major household purchasing decisions, such as a home, holiday, entertainment product or significant investment.
• Pester power is the term used to describe children’s influence over their parents’ purchasing decisions. About one-quarter of parents take their children with them when they shop, so it is very common for children to be present when purchasing decisions are being made. The most common purchases made in response to pester power are fairly small (e.g. chips, biscuits, a preferred brand of toothpaste), but children can also influence or indeed initiate major purchases, such as gaming consoles, home swimming pools and holidays.

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• For most people, the social group with the most influence over their behaviour is the family. The direct family (parents and siblings) teaches the individual appropriate behaviours relating to purchasing and consuming products. This process starts when children are very young. The family life cycle describes the stages through which most families pass.
• Family consumption decisions can be categorised into four types:
• autonomic decisions: Most household products are typically purchased by either the husband or wife, including products such as the husband’s clothing, furniture, cosmetics, pharmaceuticals, household appliances, cars and holidays.
• wife-dominant decisions: Women still make the majority of household purchasing decisions related to food, health care, laundry and bathroom products, children’s clothing and kitchen products.
• husband-dominant decisions: A small range of products are traditionally purchased by men, including hardware and garage products.
• syncratic decisions: Some products are purchased by husband and wife acting jointly. Typically such decisions would be the major household purchasing decisions, such as a home, holiday, entertainment product or significant investment.
• Pester power is the term used to describe children’s influence over their parents’ purchasing decisions. About one-quarter of parents take their children with them when they shop, so it is very common for children to be present when purchasing decisions are being made. The most common purchases made in response to pester power are fairly small (e.g. chips, biscuits, a preferred brand of toothpaste), but children can also influence or indeed initiate major purchases, such as gaming consoles, home swimming pools and holidays.

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• For most people, the social group with the most influence over their behaviour is the family. The direct family (parents and siblings) teaches the individual appropriate behaviours relating to purchasing and consuming products. This process starts when children are very young. The family life cycle describes the stages through which most families pass.
• Family consumption decisions can be categorised into four types:
• autonomic decisions: Most household products are typically purchased by either the husband or wife, including products such as the husband’s clothing, furniture, cosmetics, pharmaceuticals, household appliances, cars and holidays.
• wife-dominant decisions: Women still make the majority of household purchasing decisions related to food, health care, laundry and bathroom products, children’s clothing and kitchen products.
• husband-dominant decisions: A small range of products are traditionally purchased by men, including hardware and garage products.
• syncratic decisions: Some products are purchased by husband and wife acting jointly. Typically such decisions would be the major household purchasing decisions, such as a home, holiday, entertainment product or significant investment.
• Pester power is the term used to describe children’s influence over their parents’ purchasing decisions. About one-quarter of parents take their children with them when they shop, so it is very common for children to be present when purchasing decisions are being made. The most common purchases made in response to pester power are fairly small (e.g. chips, biscuits, a preferred brand of toothpaste), but children can also influence or indeed initiate major purchases, such as gaming consoles, home swimming pools and holidays.

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Roles and status

• Each individual in a society plays a number of roles, each of which entails a complex set of expectations — parent, child, neighbour, employee, employer, customer, friend, and so on. We understand that as part of our roles we are expected to engage in certain behaviours and actions. These roles may have a formal, even legal, definition, such as the role of parents, or of officeholders in social or volunteer organisations.
• Within the social group an individual may occupy multiple roles and roles may be shared among members of the group. Because such roles are difficult to generalise, it is equally difficult for marketers to identify in advance how the group will make its decisions, and who in the group would be most influential.
• The influence of individuals within the decision-making social group will frequently be based on the perceived status of the individual, which reflects the position occupied by an individual in a notional hierarchy of group members. Such status can be based on a range of criteria, including formal role, age, length of group membership, technical competence, access to resources or social popularity. Under such circumstances, the usual challenge for the marketer is to identify the group leaders and seek to influence their behaviours, although the criteria for group leadership and the identity of group leaders are challenges too. The combination of roles and status typically shape the expectations of group members which exert an important influence on the buyer’s final decision.

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• Individual factors relate to personal and psychological characteristics. These factors can be measured for an individual and are presumed to differ significantly between individuals, they explain the individual’s purchase process and final product choice.
• Personal characteristics constitute an individual’s identity, are objective and relatively stable. This stability is attractive to marketers in that these characteristics are relatively easy to observe and measure. They can therefore form the basis of ongoing marketing campaigns.
• Demographic factors describe the general make-up of the population, measurable characteristics that are either assumed or demonstrated to be related to the purchase or consumption of products. Demographic characteristics do not cause shopping or choice behaviour, but rather they vary systematically and predictably with the observed behaviour. They are commonly used in the description and explanation of consumer behaviour. For example, occupation is a strong predictor of computer, mobile phone and Internet usage.

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• Individual factors relate to personal and psychological characteristics. These factors can be measured for an individual and are presumed to differ significantly between individuals, they explain the individual’s purchase process and final product choice.
• Personal characteristics constitute an individual’s identity, are objective and relatively stable. This stability is attractive to marketers in that these characteristics are relatively easy to observe and measure. They can therefore form the basis of ongoing marketing campaigns.
• Demographic factors describe the general make-up of the population, measurable characteristics that are either assumed or demonstrated to be related to the purchase or consumption of products. Demographic characteristics do not cause shopping or choice behaviour, but rather they vary systematically and predictably with the observed behaviour. They are commonly used in the description and explanation of consumer behaviour. For example, occupation is a strong predictor of computer, mobile phone and Internet usage.

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• Individual factors relate to personal and psychological characteristics. These factors can be measured for an individual and are presumed to differ significantly between individuals, they explain the individual’s purchase process and final product choice.
• Personal characteristics constitute an individual’s identity, are objective and relatively stable. This stability is attractive to marketers in that these characteristics are relatively easy to observe and measure. They can therefore form the basis of ongoing marketing campaigns.
• Demographic factors describe the general make-up of the population, measurable characteristics that are either assumed or demonstrated to be related to the purchase or consumption of products. Demographic characteristics do not cause shopping or choice behaviour, but rather they vary systematically and predictably with the observed behaviour. They are commonly used in the description and explanation of consumer behaviour. For example, occupation is a strong predictor of computer, mobile phone and Internet usage.

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• Lifestyle – How a person spends their time and how they interact with others. There may be a significant difference between an individual’s actual lifestyle and their preferred lifestyle. Consumers regularly purchase products that play a role in their lifestyle, or to enhance or express their preferred lifestyle. Such products are aspirational in nature. Marketers of lifestyle-oriented products should therefore devote considerable effort to understand the preferred lifestyle of their target customers and how those lifestyles might be changing. Lifestyle is partly a choice, but is also influenced by personality and demographic characteristics such as age, income and education.
• Personality – This is the most distinctive characteristic that defines an individual’s behaviour, but is difficult to measure reliably. Researchers’ attempts to establish a reliable relationship between personality and behaviour have met with limited success. We can define personality as the set of unique psychological characteristics and behavioural tendencies that characterise an individual. It is formed through a complex combination of genetics and experiences. Often, as with lifestyle, individuals choose to purchase products as an expression of their personality. This is related to the individual’s self-concept, which is a combination of how they see themselves and how they wish others to see them. Purchase decisions are both a cause and effect of self-concept. For some individuals, purchases related to self-concept are those that reflect things such as individual achievement and material success. For other individuals, their self-concept may be tied to being socially and environmentally responsible and fashionable. Self-concept, then, can be linked to most aspects of an individual’s purchasing behaviour.

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• Lifestyle – How a person spends their time and how they interact with others. There may be a significant difference between an individual’s actual lifestyle and their preferred lifestyle. Consumers regularly purchase products that play a role in their lifestyle, or to enhance or express their preferred lifestyle. Such products are aspirational in nature. Marketers of lifestyle-oriented products should therefore devote considerable effort to understand the preferred lifestyle of their target customers and how those lifestyles might be changing. Lifestyle is partly a choice, but is also influenced by personality and demographic characteristics such as age, income and education.
• Personality – This is the most distinctive characteristic that defines an individual’s behaviour, but is difficult to measure reliably. Researchers’ attempts to establish a reliable relationship between personality and behaviour have met with limited success. We can define personality as the set of unique psychological characteristics and behavioural tendencies that characterise an individual. It is formed through a complex combination of genetics and experiences. Often, as with lifestyle, individuals choose to purchase products as an expression of their personality. This is related to the individual’s self-concept, which is a combination of how they see themselves and how they wish others to see them. Purchase decisions are both a cause and effect of self-concept. For some individuals, purchases related to self-concept are those that reflect things such as individual achievement and material success. For other individuals, their self-concept may be tied to being socially and environmentally responsible and fashionable. Self-concept, then, can be linked to most aspects of an individual’s purchasing behaviour.

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• Psychological characteristics describe internal factors that shape the thinking, aspirations, expectations and behaviours of the individual. These characteristics are particular to the individual and independent of their situational and social circumstances.
• Motivation – The term is used to describe the individual’s internal drive to act to satisfy unfulfilled needs or achieve unmet goals. This internal force prompts behaviours that seek to move from an actual, current state to the desired state. Motivation is often made up of individual motives. A motive is specific to a particular drive, such as hunger.
• Behaviours are usually the result of a combination of motives. While motivation is often specific to the individual and situation, some motives are consistent over time and across the population. For example, marketers can predict that consumers will be motivated by hunger at breakfast time and that breakfast will usually be within a range of a few hours for almost all of the population.

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• Psychological characteristics describe internal factors that shape the thinking, aspirations, expectations and behaviours of the individual. These characteristics are particular to the individual and independent of their situational and social circumstances.
• Motivation – The term is used to describe the individual’s internal drive to act to satisfy unfulfilled needs or achieve unmet goals. This internal force prompts behaviours that seek to move from an actual, current state to the desired state. Motivation is often made up of individual motives. A motive is specific to a particular drive, such as hunger.
• Behaviours are usually the result of a combination of motives. While motivation is often specific to the individual and situation, some motives are consistent over time and across the population. For example, marketers can predict that consumers will be motivated by hunger at breakfast time and that breakfast will usually be within a range of a few hours for almost all of the population.

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• Psychological characteristics describe internal factors that shape the thinking, aspirations, expectations and behaviours of the individual. These characteristics are particular to the individual and independent of their situational and social circumstances.
• Motivation – The term is used to describe the individual’s internal drive to act to satisfy unfulfilled needs or achieve unmet goals. This internal force prompts behaviours that seek to move from an actual, current state to the desired state. Motivation is often made up of individual motives. A motive is specific to a particular drive, such as hunger.
• Behaviours are usually the result of a combination of motives. While motivation is often specific to the individual and situation, some motives are consistent over time and across the population. For example, marketers can predict that consumers will be motivated by hunger at breakfast time and that breakfast will usually be within a range of a few hours for almost all of the population.

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• Psychological characteristics describe internal factors that shape the thinking, aspirations, expectations and behaviours of the individual. These characteristics are particular to the individual and independent of their situational and social circumstances.
• Motivation – The term is used to describe the individual’s internal drive to act to satisfy unfulfilled needs or achieve unmet goals. This internal force prompts behaviours that seek to move from an actual, current state to the desired state. Motivation is often made up of individual motives. A motive is specific to a particular drive, such as hunger.
• Behaviours are usually the result of a combination of motives. While motivation is often specific to the individual and situation, some motives are consistent over time and across the population. For example, marketers can predict that consumers will be motivated by hunger at breakfast time and that breakfast will usually be within a range of a few hours for almost all of the population.

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The most widely recognised theory of motivation is Maslow’s hierarchy of needs, which suggests that people seek to satisfy needs according to an hierarchy that places lower order ‘biogenic’ needs before higher order ‘psychogenic’ needs. Only once lower order needs are met will an individual seek to satisfy higher level needs.

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• Biogenic, or physiological, needs are the most basic: food, water, shelter, clothing, sleep and sex. They are the fundamentals of survival.
• Once these needs are reasonably satisfied, then the need for physical and emotional safety and security will come to the fore.
• Once the individual feels safe and secure, social needs such as the desire for love, affection and belonging will be dominant.
• Beyond social needs are the ego or esteem needs, which relate to self-esteem and the individual’s need to be recognised and respected by others.
• At the top of the hierarchy, self-actualisation needs refer to an individual’s need for improvement, achievement and success. Individuals pursuing self actualisation may choose to purchase services such as education, personal coaching, meditation and even yoga.
• The presumption that consumers will only pursue higher order needs when all their lower order needs are satisfied is clearly questionable. In practice, a consumer’s behaviour, at any one time, is likely to be driven by a range of motives. Motives are of immediate interest and importance to marketers, as they can explain the reasons for some key consumer behaviours, including:
• choosing to buy a particular product
• choosing to buy a particular brand
• being willing to pay a particular price
• preferring to shop through particular outlets.
• Knowledge of these patronage motives is crucial to understanding and predicting consumer behaviour. For example, the marketers employed by a supermarket will seek to understand who from among their customers are motivated by location, who are shopping for the lowest price, and who are motivated by convenience, the weekly shopping ritual or an enjoyable social experience.

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• Perception is the psychological process that filters, organises and attributes meaning to external stimuli. Perception is particular to the individual, so, for example, a commercial may be interpreted by viewers to mean something quite different than what the advertiser intended.
• The first stage of the process of perception — filtering — enables the individual to deal with only those inputs that are relevant to their particular needs and circumstances. In this sense, perception is selective and produces:
• selective exposure: the tendency to actively seek out messages that are pleasant and agreeable and to avoid messages that are threatening or disagreeable. Consumers may, for example, actively shut out messages from political parties with which the individual disagrees.
• selective attention: the process by which an individual chooses to take in only those messages which are relevant to their needs. Some consumers will only be interested in particular brands, some only in price, some in appearance, and some in social acceptability. In these circumstances, messages which do not feature the particular brand, price, appearance or social success will be disregarded.
• selective distortion: an individual’s tendency to perceive information which is inconsistent with existing beliefs or attitudes in such a way as to reduce the inconsistency. For example, an individual who idolises a sporting hero will seek to deny information which suggests the hero has been performing poorly.
• selective retention: the tendency to remember only that information which is consistent with other beliefs and which is relevant to an individual’s needs. An individual will tend to remember information which supports prior beliefs and feelings and to forget information which is not consistent with these prior feelings.
• The second stage in the process of perception involves organising new information and integrating it with existing knowledge. This process often involves connecting new information with existing memories via familiar expressions, sights and sounds.
• The ultimate outcome of the perceptual process is the assignation of meaning. An individual will interpret new information in a way that is consistent with their expectations, existing knowledge or beliefs.

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• Perception is the psychological process that filters, organises and attributes meaning to external stimuli. Perception is particular to the individual, so, for example, a commercial may be interpreted by viewers to mean something quite different than what the advertiser intended.
• The first stage of the process of perception — filtering — enables the individual to deal with only those inputs that are relevant to their particular needs and circumstances. In this sense, perception is selective and produces:
• selective exposure: the tendency to actively seek out messages that are pleasant and agreeable and to avoid messages that are threatening or disagreeable. Consumers may, for example, actively shut out messages from political parties with which the individual disagrees.
• selective attention: the process by which an individual chooses to take in only those messages which are relevant to their needs. Some consumers will only be interested in particular brands, some only in price, some in appearance, and some in social acceptability. In these circumstances, messages which do not feature the particular brand, price, appearance or social success will be disregarded.
• selective distortion: an individual’s tendency to perceive information which is inconsistent with existing beliefs or attitudes in such a way as to reduce the inconsistency. For example, an individual who idolises a sporting hero will seek to deny information which suggests the hero has been performing poorly.
• selective retention: the tendency to remember only that information which is consistent with other beliefs and which is relevant to an individual’s needs. An individual will tend to remember information which supports prior beliefs and feelings and to forget information which is not consistent with these prior feelings.
• The second stage in the process of perception involves organising new information and integrating it with existing knowledge. This process often involves connecting new information with existing memories via familiar expressions, sights and sounds.
• The ultimate outcome of the perceptual process is the assignation of meaning. An individual will interpret new information in a way that is consistent with their expectations, existing knowledge or beliefs.

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• Consumers rely upon beliefs and attitudes when making judgements about problems that require solutions and products for which there is no readily apparent need (e.g. new high-technology products).
• Beliefs comprise descriptive or evaluative thoughts that an individual holds regarding their knowledge or assessment of a person, idea, product and so on. Beliefs may be based on objective knowledge, opinions or faith. They may be accurate or inaccurate. When they involve a judgemental or emotional component, they can form the basis of a strong brand image.
• An attitude describes an individual’s relatively stable and consistent thoughts, feelings and behaviours towards an object or idea. People hold attitudes regarding politics, ideas, food, clothing, art, music, religion, other people – almost everything.
• Attitudes and beliefs therefore form the background against which new products or ideas are evaluated. Attitudes clearly relate to reputation, brand image and brand equity, and negative attitudes can destroy reputation, brand image and brand equity, especially through negative word-of-mouth.
• The three components that make up an attitude are:
• the cognitive component, which comprises the person’s awareness of and knowledge about the object or issue
• the affective component, which refers to feelings towards the object or issue
• the behavioural component, which reflects the individual’s actions or intentions towards the object or issue.

Because attitudes are relatively stable, it is difficult to change attitudes towards an organisation in the short term, especially when that company or brand is already very familiar.

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• Behavioural learning theories stress the role of experience and repetition of behaviour.
• ‘Classical conditioning’ describes learning in which behaviour that results in a pleasant experience is likely to be repeated. If a brand can be consistently associated with a pleasant experience in the minds of the consumer over an extended period of time, then eventually the brand itself will provoke a pleasant experience.
• For classical conditioning to be effective, it requires long-term repetition of a consistent, simple message. Classical conditioning is therefore most relevant in low involvement purchases; that is, where the product is relatively unimportant to the consumer and the cost of being wrong is equally minimal. With products such as soft drink, there is little risk involved, and the consumer is often willing to buy on the basis of ‘trial and error’.
• Beyond classical conditioning, ‘operant’ or ‘instrumental’ conditioning, pioneered by American psychologist B.F. Skinner, is distinguished by the overt use of reward and punishment to stimulate appropriate behaviour. In behavioural learning, consumers learn from experience, frequently with very little deliberate thought or reflection. Such immediate gratification can lead to long-term loyal consumption behaviour.
• Cognitive learning theories describe learning that takes place through rational problem solving, which emphasises the acquisition and processing of new information.
• Cognitive learning theories are generally more relevant in the case of complex problems for which the consumer needs to develop a rational solution. Cognitive learning theories therefore place a high reliance on the provision of information and guidance to enable the consumer to arrive at his or her desired solution.
• In cognitive learning theories, the emphasis is on reasoning (rather than experience), and so decision making is likely to be protracted, deliberate, rational and well informed. Cognitive learning is generally more relevant in high involvement purchasing decisions, which are typically for high-cost, important and infrequent purchases which involve significant levels of risk in the event of making a wrong decision.

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• Behavioural learning theories stress the role of experience and repetition of behaviour.
• ‘Classical conditioning’ describes learning in which behaviour that results in a pleasant experience is likely to be repeated. If a brand can be consistently associated with a pleasant experience in the minds of the consumer over an extended period of time, then eventually the brand itself will provoke a pleasant experience.
• For classical conditioning to be effective, it requires long-term repetition of a consistent, simple message. Classical conditioning is therefore most relevant in low involvement purchases; that is, where the product is relatively unimportant to the consumer and the cost of being wrong is equally minimal. With products such as soft drink, there is little risk involved, and the consumer is often willing to buy on the basis of ‘trial and error’.
• Beyond classical conditioning, ‘operant’ or ‘instrumental’ conditioning, pioneered by American psychologist B.F. Skinner, is distinguished by the overt use of reward and punishment to stimulate appropriate behaviour. In behavioural learning, consumers learn from experience, frequently with very little deliberate thought or reflection. Such immediate gratification can lead to long-term loyal consumption behaviour.
• Cognitive learning theories describe learning that takes place through rational problem solving, which emphasises the acquisition and processing of new information.
• Cognitive learning theories are generally more relevant in the case of complex problems for which the consumer needs to develop a rational solution. Cognitive learning theories therefore place a high reliance on the provision of information and guidance to enable the consumer to arrive at his or her desired solution.
• In cognitive learning theories, the emphasis is on reasoning (rather than experience), and so decision making is likely to be protracted, deliberate, rational and well informed. Cognitive learning is generally more relevant in high involvement purchasing decisions, which are typically for high-cost, important and infrequent purchases which involve significant levels of risk in the event of making a wrong decision.

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• Behavioural learning theories stress the role of experience and repetition of behaviour.
• ‘Classical conditioning’ describes learning in which behaviour that results in a pleasant experience is likely to be repeated. If a brand can be consistently associated with a pleasant experience in the minds of the consumer over an extended period of time, then eventually the brand itself will provoke a pleasant experience.
• For classical conditioning to be effective, it requires long-term repetition of a consistent, simple message. Classical conditioning is therefore most relevant in low involvement purchases; that is, where the product is relatively unimportant to the consumer and the cost of being wrong is equally minimal. With products such as soft drink, there is little risk involved, and the consumer is often willing to buy on the basis of ‘trial and error’.
• Beyond classical conditioning, ‘operant’ or ‘instrumental’ conditioning, pioneered by American psychologist B.F. Skinner, is distinguished by the overt use of reward and punishment to stimulate appropriate behaviour. In behavioural learning, consumers learn from experience, frequently with very little deliberate thought or reflection. Such immediate gratification can lead to long-term loyal consumption behaviour.
• Cognitive learning theories describe learning that takes place through rational problem solving, which emphasises the acquisition and processing of new information.
• Cognitive learning theories are generally more relevant in the case of complex problems for which the consumer needs to develop a rational solution. Cognitive learning theories therefore place a high reliance on the provision of information and guidance to enable the consumer to arrive at his or her desired solution.
• In cognitive learning theories, the emphasis is on reasoning (rather than experience), and so decision making is likely to be protracted, deliberate, rational and well informed. Cognitive learning is generally more relevant in high involvement purchasing decisions, which are typically for high-cost, important and infrequent purchases which involve significant levels of risk in the event of making a wrong decision.

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• Consumer decisions involve different levels of engagement. They can be categorised along a continuum from habitual at one end to extended decision-making behaviours at the other:
• Habitual decision making involves little engagement with the purchase. Typically, the consumer minimises search and shopping efforts for purchases that are routine and habitual; for example, many supermarket and convenience store purchases.
• Limited decision making involves seeking limited information to evaluate options for infrequent purchases within familiar product categories, such as clothing, books, music, inexpensive appliances and restaurants.
• Extended decision making involves full engagement with the purchase decision in a protracted, deliberate and detailed way. In such purchases, consumers will seek to gather comprehensive information concerning the nature of the problem, the product category, the available brands, their relative merits and the specific details of the purchase. Such decision making is typical for high-involvement products, which are usually those that are high priced and infrequently purchased. Examples include cars, home prestige furniture and decoration, holidays, home entertainment systems, new information technology, mortgages and investment products.
• The level of engagement is fundamentally important to the type of marketing that will be effective.

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• Need/want recognition – Typically occurs when a buyer becomes aware of a discrepancy between a desired state and the actual state. It can occur in a range of ways. Often, an individual, will become aware of an unsatisfactory state of affairs, such as poor health or fitness. Alternatively, marketers can stimulate recognition of the problem by highlighting the incidence of the problem in the population, for example, poor diet or hypertension (high blood pressure). Marketers can use advertising, public information campaigns, salespeople or packaging to highlight the problem in the minds of the public. (Of course, such campaigns might also be partly responsible for adverse social consequences such as the increasing incidence of eating disorders. Marketers need to closely monitor the effects of such campaigns.)

According to research, awareness is driven principally by:

• websites in the travel sector
• direct mail in the credit card and retail banking sector
• Internet ads in the mortgage and investment business
• print in the personal and home products sectors.

2. Information search – Having recognised the problem, the buyer searches for information about how to solve the problem. Our middle-aged businessman will search for information that will help him overcome the problems of being unfit and overweight. Typically, an information search will begin with the individual examining their knowledge and memory for appropriate solutions. Once this first stage of the information search has been done, decision makers look externally for more information. In engaging in an external search, the consumer will prefer sources that are reliable and efficient. In this sense, personal relationships with friends, family members and associates are the most highly valued, as the person trusts and/or respects them. This explains why ‘word-of-mouth’ is highly influential and so appealing to marketers, but is not easy to manage. On the other hand, the Internet has become the most preferred information source for many categories of purchases, such as expensive consumer durables and travel. The consumer decision making process.

• Evaluation of options – A successful information search will usually yield a range of alternative solutions for consideration. To evaluate the options, the buyer uses a combination of objective criteria, such as price, and subjective criteria, such as style, image or feeling about a product. These criteria will likely vary in importance. From the range of evaluative criteria, the potential buyer rates and eventually ranks the alternative solutions. Marketers can influence consumers’ evaluations by presenting their products’ features and benefits in a way that reflects the consumer’s needs and evaluative criteria, and hence influences their decision making. Marketers tend to feature those attributes of their products that are strongest and seek to convince the consumer that those features are the most important. In this way, marketers can shape the consumer’s decision, particularly in unfamiliar problems or product categories. It is important to remember that the consumer is also considering completely different uses of their money. Because consumers have limited resources, not only will they compare a few different brands and styles when choosing a new lounge suite, but they will also make a judgement as to whether a new lounge suite offers more value than other possible uses of their money, such as a holiday or just saving the money.
• Purchase – Once the evaluation of alternatives is complete, the consumer moves to the purchase stage, in which the particular product and specific brand are chosen. It is important to recognise of course that the purchasing decision may in fact be to not purchase. Product availability can often make a crucial difference at this stage, particularly when consumers are undecided between brands, for example, in wine, clothing and footwear.
• Post-purchase evaluation – It is a common mistake for marketers to assume that the consumer decision-making process ends with the purchase. This is rarely the case for the consumer. After the purchase, the buyer continues to evaluate their purchase decision. In fact, once the purchase is made, the consumer is in a much better position to evaluate their choice. They continue to assess whether the product matched their expectations.

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The consumer decision-making process involves five stages, all typically present in consumer buying decisions, but the relative importance and duration of each varies considerably from one decision to another.

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• Cognitive dissonance occurs when a purchaser has second thoughts or doubts about the wisdom of the purchase. It is most probable when a person has recently purchased an expensive, high-involvement product, the features of which are shared with other acceptable alternatives. In these circumstances, there is a danger that the buyer may feel that they have made the wrong choice. Consequently, a buyer will actively seek out information from personal or commercial sources, which will reassure them about their decision. In these circumstances, marketers may seek to communicate with their recent customers to ensure that their experience has been satisfactory and that they have no regrets. For this reason, car companies write to their new customers to receive feedback on the purchase experience and to provide evidence to customers that they have made a wise choice. In the case of both the car companies and the gym, the objective in the post-purchase phase should be the same; that is, to ensure that the customer is satisfied and is likely to continue the relationship by renewing the gym subscription or by continuing their loyalty to the car brand when the consumer next purchases. This forms the basis of a continuing, profitable customer relationship.
• Another strategy for reducing cognitive dissonance is the use of bonuses or rebates via redemption, which provide the consumer with additional value some time after the purchase. Sony regularly uses this approach, inviting buyers of its LCD televisions to send in a form and their barcode to receive cash back or a bonus product such as a Blu-Ray DVD player.

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Chapter summary:

• explain why marketers require a thorough understanding of consumer behaviour and its major influences
• understand the major group factors that influence consumer behaviour
• analyse the major individual factors that influence consumer behaviour
• explain the general steps in the consumer decision-making process.

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