CONSUMER BEHAVIOUR AND DECISION MAKING

1. INTRODUCTION

It is important to study consumer behaviour, so that when we implement the

marketing concept, we need to understand consumer needs and wants. How
consumers respond to a firm’s marketing strategies is the ultimate test. If
consumers respond well and buy the marketers products in sufficient quantities
we know that they have done a good job in formulating a successful marketing
strategy that appeals to the target markets needs. Information about consumers
helps marketer’s define the market and identify opportunities and threats.

2. THE IMPORTANCE OF UNDERSTANDING CONSUMER BEHAVIOUR

The discussion of consumer behaviour in this chapter is based on the premise

that we are dealing with rational buyers. Based on the economic buyer theory we
assume that buyers:

✓ Within reason, know all the relevant facts;

✓ Logically compare alternative choices in terms of cost and value; and
✓ Do not have enough money to buy everything they want, so they try to
make their money “stretch” as far as possible – that is, they pursue
maximum satisfaction at the lowest cost.

Consumer’s products and service preferences are constantly changing. In order to

address this, marketing managers must have a thorough knowledge and
understanding of consumer behaviour.

Consumer behaviour describes how consumers make purchase decisions and how
they use and dispose of the purchased goods and services. The study of consumer
behaviour also includes an analysis of factors that influence purchase decision and
product usage. Understanding how consumers make purchase decisions can help

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marketing managers in several ways. For example, if a manager of a motor vehicle
manufacturer knows through research that petrol consumption is the most important
attribute for a certain target market, the manufacturer can redesign the product in the
short run, it can use promotion in an effort to change consumer’s decision-making
criteria.

For example, the manufacturer can advertise the car’s maintenance-free features
and sporty European style while down-playing petrol consumption. In other words,
marketers can change attitudes and influence consumers buying decisions if they
are knowledgeable about consumer behaviour, and buying behaviour in particular.

The study of consumer behaviour by marketers is thus aimed at

understanding consumer behaviour, predicting consumer behaviour given a
set of circumstances, and finally, influencing consumer behaviour and
particularly buyer behaviour.

3. THE CONSUMER DECISION- MAKING PROCESS

The five steps represented below, show a general process which moves the
consumer from recognition of an unfulfilled need to the evaluation of a purchase
after the event. This processes as a guideline for studying how consumer makes
decisions.

1. Problem recognition of an unfulfilled need

This is the realisation that an unfulfilled need exists, this occurs when a
consumer is faced with a discrepancy between an actual state (I do not
have a car) and a desired state (I want my own car).
Problem recognition is triggered when a consumer is exposed to either
internal or external stimulus. An example of internal stimulus would be
hunger or thirst and an example of external stimulus could be a brand
name mentioned by a friend, an advertisement on TV or the scent of the
perfume worn by a stranger.
2. Information search
In this phase the consumer searches for information about the product that
they are interested in buying. For example John/Mary may fist use internal

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 sources such as memory or experience, then external sources such as the
advice of family members and friends, or marketing sources such as Car
Magazine.

3. Evaluation of alternatives
Evaluation entails the appraisal by the consumer of the attributes and
benefits of the various alternatives. John/Mary may consider buying a
Toyota Verso, a Jetta or a Volvo. He now evaluates these three
alternatives in terms of certain criteria such as cost, performance, colour
and quality.
4. Purchase
Once the best alternative has been identified, the consumer makes a
decision. John/Mary also has to decide at which dealer he/she will buy the
car and whether he/she needs finance to pay for the car.
5. Post-purchase behaviour
In this phase, the consumer re-evaluates his decision. If the product fulfils
his expectation, this may lead to brand loyalty. If he is dissatisfied, he
could lodge a complaint. He may also begin to wonder whether he has
made the right decision, even if there is nothing wrong with the product.
This condition is known as cognitive dissonance (post purchase doubt).
The post-purchase phase can be regarded as the beginning of a new
decision-making process. Will John/Mary, for example consider
repurchasing the same car when the need arises?

4. TYPES OF CONSUMER BUYING DECISIONS AND CONSUMER

INVOLVEMENT

All consumers buying decisions generally fall along a continuum of three broad
categories:

1. Routine response behaviour

These are frequently purchased, low cost goods and services e.g. buying
soap. There is a low level of involvement and usually buyers are familiar with
different brand in the product category.

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2. Limited decision-making
Goods and services that are purchased regularly and that are not considered
expensive are generally associated with this category. These are also
associated with low levels of involvement (although higher than routine
decisions), because consumers do make a moderate effort in searching for
information or in considering various alternatives. For example the children in
a family usually eat Kellogg’s Corn Flakes as their brand of cereal, which has
run out at home and at the supermarket. With no cereal at home, the parent
must now select another brand. Before making a final selection he or she
may pull from the shelf several brands similar to Kellogg’s corn Flakes, to
compare their nutritional value and calories and to decide whether the
children will like the new cereal.
3. Extensive decision-making
Consumers practiced this level of decision making when buying an unfamiliar,
expensive product or an infrequently bough item. This process is the most
complex type of consumer buying decision and is associated with high
involvement on the part of the customer. These consumers want to make the
right decision, so they want to know as much as they can about the product
category and available brands. People usually experience cognitive
dissonance only when buying high-involvement products. Buyers use several
criteria for evaluating their options and spend much time seeking information.
Buying a home or a car or overseas holiday, for example, requires extensive
decision-making.

The placement of goods and services in these three categories can best be
described in terms of five factors:

1. the level of consumer or buyer involvement;

2. the length of time a buyer takes to make a decision;
3. the cost of the product or service;
4. the degree of information search the buyer does; and
5. The number of alternative the buyer considers before actually buying.

Factors determining the level of consumer involvement

• Previous experience

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 When consumers have had previous experience with a product or
service, the level of involvement typically decreases. Because they are
familiar with the product and know whether it will satisfy their needs,
consumers become less involves in the purchase over time.
For example, people with pollen allergies typically continue buying the
sinus medicine that has relieved their symptoms in the past.
• Interest
Involvement is directly related to consumer interests, as in vehicles,
music, movies or electronics. Naturally, these areas of interest vary
from on individual to another.
Those who regard a motor car as no more than a means of getting
from A to B will not be too involved in a purchasing decision for a
vehicle. On the other hand, those who eat, sleep and live cars will be a
lot more involved.
• Perceived risk of negative consequences
As the perceived risk in purchasing a product increases, so does a
consumers level of involvement. The types of risks that concern
consumer include financial risk, social risk and psychological risk.
First, financial risk is associated with exposure to loss of wealth or
purchasing power. Because high risk is associated with high-priced
purchases, consumers tend to become extremely involved when
products are expensive. Therefore, price and involvement are usually
directly related: as price increases, so does the level of involvement.
For example someone who is thinking of buying a house will normally
spend much time and effort to find the right one. Second, consumers
take social risks when they buy product that can affect people’s social
opinions of them (for example, driving an old run-down car or wearing
old-fashioned clothes). Third, buyers undergo psychological risk if they
feel that making the wrong decision might cause some concern or
anxiety. For example, should a working parent employ a babysitter or
enrol the child in a day-care centre? Thus, the higher the perceived
risk, the higher the level of involvement in the purchasing decision.
• Situation

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 The circumstances of a purchase may temporarily transform a low-
involvement decision into a high involvement one. High involvement
occurs when the consumer perceives risk in a specific situation.
For example, an individual might routinely buy low priced brands of
liquor and wine. However, when the boss is invited for dinner, the
consumer might make a high-involvement decision and buy a more
prestigious brand. The prevailing situation may thus necessitate higher
(or lower) involvement in a purchasing decision.
• Social visibility
Involvement also increases as the social visibility of a product
increases. Products often on social display include cell phone designer
clothing labels, vehicles etc. All these items make a statement about
the purchaser and, therefore, carry a social risk. To avoid the social
risk consumers thus become more involved in the purchase decision.

The market implications of consumer involvement

The overall implication is that consumer involvement influences the marketing

strategies that could and should be used. For low-involvement goods convenient
availability (distribution) and low prices are important. For high-involvement goods
quality, image, shopping assistance and information may be more important. In
both cases, branding is very important.

5. INDIVIDUAL FACTORS INFLUENCING CONSUMER BUYING DECISIONS

1. Perception
Perception can be defined “as the entire process by which an individual
becomes aware of the environment and interprets it so that it will fit into
his/her own frame of reference. Thus, the person sees, hears, smells,
touches and tastes stimuli in the environment and interprets their
meaning”.
For example, what makes a consumer prefer one supermarket to another
or one brand of beer to another, or a specific type of car? The answer is

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usually found in the way a consumer perceives the available brands or
stores.

Perception is influenced by what we have learned. The way in which we

perceive things is influenced by what we know about them, in other words,
what we have learned about them.
E.g. a young man sees an advertisement for Camel cigarettes. His
interpretation is that smoking demonstrates masculinity, so he buys a
packet of Camel.
The perception process
➢ Exposure
Initial exposure begins with exposure to stimuli. Exposure occurs
when the stimuli come with range of one of the five primary
receptions, i.e. vision, hearing, taste, smell and touch. Most stimuli
to which an individual is exposed are deliberately selected, that is,
certain stimuli are sought out, others are avoided and the meaning
of some is distorted. This is known as selective exposure.
To ensure that consumers in their target market are exposed to a
marketing message, marketers often put advertisement on
unconventional places where there will be less competition, for
example on the backs of shopping trolleys, on walls in sports
stadiums etc. Retailers use shelf position and amount of shelf
space to ensure consumers are exposed to certain brands. Point-
of-purchase displays also attract attention to sale items. Stores are
designed with highly visible shelves and overhead signs to make
locating items as easier as possible.
➢ Attention
Attention is activated when one or more of the sensory receptors
are stimulated and the resulting sensations are processed in the
brain. The individual is exposed to more stimuli than he/she can
process. Therefore he/she has to be selective in attending to
marketing and other messages, known as selective attention.
Thus the stimuli will be processed only when the individual makes a
deliberate effort. Normally a person will attend to a stimulus if
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 he/she is interested in it. For example a person who is not normally
interested in car adverts will be very much aware if he/she wants to
buy a car.

Some advertisers often set their advertisements off from other by

showing their products against a black and white background.
Sudden silences in TV ads, drastic changes in music, sudden
changes from black and white to colour and the way price are
announced and displayed all are examples of enhancing attention.
➢ Interpretation
This is the meaning that people assign to sensory stimuli. Just as
people differ in terms of the stimuli that they perceive, the eventual
assignment of meaning to these stimuli varies as well. Two people
can see or hear the same even but their interpretation of it can be
like night and day. Consumers usually interpret information on the
basis of their own attitudes, beliefs, motives and experiences,
known as selective interpretation. They often interpret
information in a manner that supports their own position. Marketers
rely heavily on symbols in marketing messages to promote the
current interpretation.
E.g. the use of a pine tree symbol on some cleaning products
conveys a meaning of fresh and clean. The protective hands of the
Sanlam logo provide an association with trust.
➢ Recall
Consumers do not remember all the information they see, hear or
read, even after attending to and interpreting it. Selective recall
refers to the fact that consumers tend to forget the marketing
message. To ensure full and correct recall of the message, as well
as appropriate purchasing action, the marketer must use point-of-
purchase promotion to remind the consumer of the message and
product.
For example marketers attempt to promote recall by using symbols,
rhymes, jingles and association that assist in the learning and
memory process. Eveready put pictures of its pink bunny on
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 packages to remind consumer at the point of purchase of its
creative advertising.

2. Motivation

Motivation can be described as the driving force within individuals that

impels them to action.

Two classifications that are particularly relevant to the marketer are

Maslow’s hierarchy of motives.

[Diagram to be given in class and discussed]

3. Learning
Almost all consumer behaviour results from learning, which is the process
that creates change in behaviour through experience and practice.
Learning is boosted through reinforcement and repetition. It is not
possible to observe learning directly but we can infer when it has occurred
by a person’s actions. For example, suppose you see an advert for a new
improved cold medicine. If you go to a pharmacy that day and buy that
remedy, we can infer that you have learned something about the cold
medicine.
There are two types of learning:
Experiential
This occurs when an experience changes your behaviour. For example, if
you try the new cold medicine when you get home and it does not relieve
your symptoms, you may not buy that brand again.
Conceptual
Conceptual learning is not learned through direct experience. Assume, for
example, that you are standing at a cool drink vending machine a notice a
new diet cool drink with an artificial sweetener. But someone as told you
that diet beverages leave an aftertaste, so you choose a different drink.
You have learned that you would not like this new diet drink without even
trying it.

4. Values, beliefs and attitudes

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 Values help determine self concept, personality and even lifestyle. A
value is an enduring belief that a specific mode of conduct is personally or
socially preferable to another mode of conduct.
Consumers with similar value systems tend to react alike to prices and
other marketing-related inducements. Values also correspond to
consumption patterns. In other words what and where people buy is
influenced by their value system. For example people who care for the
environment will buy environmentally friendly products.
A belief is an organised pattern of knowledge that an individual holds as
true about his or her world. A consumer may believe that that Sony’s
video camera makes the best home videos, tolerates hard use and is
reasonably priced. These beliefs may be based on knowledge, faith or
hearsay. Consumers tend to develop a set of beliefs about a particular
brand. In turn brand image shapes consumers attitudes towards the
product.
An attitude is a learned tendency to respond consistently towards a given
object, such as a brand. Attitudes also encompass an individual’s value
system, which represents personal standard of good and band, right and
wrong etc. From a marketing perspective the objective is to cultivate a
positive attitude towards a firm, product or brand.

5. Personality, self-concept and lifestyle

Each consumer has a unique personality. Personality is a broad concept
that can be thought of as a way of organising and grouping consistencies
of an individual’s reaction to situations. Some marketers believe that
personality influences the types and brands of products purchased. For
instance, the type of car, clothes, jewellery a consumer buys may reflect
one or more personality traits. Personality traits such as autonomy,
aggressiveness, dominance, sociability and self-confidence may be used
to describe a consumer’s personality.
Self concept or self perception is how consumers perceive themselves to
be. Self concept includes attitudes, perceptions, beliefs and self-
evaluation. Self concept combines the ideal self-image (the way an
individual would like to be) and the real self image (how an individual
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 actually perceives them self to be). Generally we try to raise our real self
image towards our ideal self image.
Consumer’s seldom buy products that jeopardise their self image. For
instance a trendsetter would not buy a traditional safari suit.
Personality and self concepts are reflected in lifestyle. This is a mode of
living. Psychographics is the analytical tool used to examine consumer
lifestyles and to categorise consumers. Lifestyle characteristics are useful
in segmenting and targeting consumers. LSM research.

6. SOCIAL FACTORS INFLUENCING CONSUMER BUYING DECISION

• Culture and Sub-culture
It is a set of values, norms and attitudes that shape behaviour and
consumer behaviour. They comprise of the following norms:
➢ Reasonable, homogeneous
➢ Its learned over time and passed on
➢ Its dynamic
➢ Careful not to offend

• Reference groups
A reference group involves one or more people that a consumer uses
as a basis for comparison or ‘point of reference’ in forming responses
and performing behaviours. For example:
Membership groups – book clubs, sports clubs etc.
Automated groups – are groups to which a person belongs as a result
of age, gender or occupation e.g. SACPVP
Negative groups – groups whereby the consumer does not want to be
a part of e.g. people who smoke or drink
Associative groups – are those groups to which a person aspires to
belong to e.g. SAIV

• Opinion leaders

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 a reference group need not necessarily be a group of persons but can
also be a reference person, an individual to whom other will look in
forming opinions and taking consumer decisions.

• Family
➢ Initiator, influencer, decision-maker, purchaser, user
➢ Family life-cycle, attitudes, behaviour and particularly buyer
behaviour change over time.

• Social class
➢ Upper class
➢ Middle class
➢ Working class
➢ Lower class

7. THE PURCHASE SITUATION’S INFLUENCE ON CONSUMER BUYING

DECISIONS
Individual consumer’s behaviour is affected by the purchase situation they find
themselves in at the time of the purchase. Below are the three variables that
can play a role.
• Purchase reason affects buying.
Why a consumer makes a purchase can affect buying behaviour. For
example, a person buying a watch to wear during long-distance
running will buy a different watch when it is bought as a gift for his
mother’s seventieth birthday.
• Time affects buying.
Time influences a purchase situation. When consumers make a
purchase, and the time they have available for shopping, will influence
their behaviour. A Valentine’s Day dinner will be different from a quick
hamburger and Coke before a rugby match.
• Physical surrounding affect buying

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Surroundings can affect buying behaviour. The excitement of an
auction may stimulate impulse buying. Surroundings may discourage
buying too. For example, some people don’t like to stand in a checkout
line in a supermarket where others can see what they’re buying.

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