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SECTION 3

CONSUMER BUYING BEHAVIOUR

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INTRODUCTION

v  As many as 95% of new products introduced

each year fail, according to Cincinnati (Ohio, US) research agency AcuPoll (2010).

v  Why do so many new products fail?

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MODELLING CONSUMER BUYER BEHAVIOUR (CBB)

•  CBB is never simple - influenced by a multitude of factors (operating at many levels).

•  But, marketing management needs to have a working understanding of CBB:

•  Essential for survival and success in today’s market place.

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DEFINITIONS

•  “Consumer buyer behaviour refer to the buying behaviour of final consumers-individuals and households that buy goods a n d s e r v i c e s f o r p e r s o n a l consumption” (Kotler and Armstrong, 2014:158).

•  “A consumer market consists of all the individuals and households that buy or acquire goods and services for personal consumption” (ibid).

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STIMULUS-RESPONSE MODEL OF CBB:

The Environment Marketing stimuli:

product, price, place, promotion

Other stimuli: economic, socio-cultural,

technological

Buyer's Black Box

Buyer's characteristics

Buyer's decision process

Buyer Responses Buying attitudes and

preferences Purchase behavior: what the

buyer buys, when, where, and how much

Brand and company relationship behavior

(Adapted from: Kotler and Armstrong, 2014:159

Ø Figure 6: A “stimulus response” model of CBB - to explain the inputs, process, and results of buyer behaviour.

Ø  “How do consumers respond to various marketing efforts the firm might use?”

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ACTIVITY: GROUP DISCUSSION

1.  Explain in your own words why figure 6 is called the “Stimulus-Response” Model of consumer buyer behaviour.

2.  From Fig 6, what is the essential question that marketers need to answer?

3.  What do you understand by the term “black box?” Where does this term come from originally?

4.  Comment on the following statement. “As diverse as the consumer market is, so complex are the “fascinating array of factors that affect consumer behaviour”.

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CHARACTERISTICS INFLUENCING CBB:

•  Consumer buying is influenced strongly by: •  cultural •  social •  personal •  psychological characteristics (Kotler and Armstrong, 2014:159).

•  Complete the case study: “Harnessing the Power of Online Social Influence”.

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CULTURAL FACTORS

•  Cultural factors exert a “broad and deep influence” on consumer behaviour.

•  Marketers need to understand role played by the buyer’s culture, subculture and social culture (ibid).

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SOCIAL FACTORS

Influenced by consumer’s: •  Small groups •  Family •  Social roles •  Status •  Online social networks (online

communities) (Very important to marketers)

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PERSONAL FACTORS

Influenced by personal characteristics eg: •  Age •  Life cycle stage •  Occupation •  Economic situation •  Lifestyle •  Personality •  Self-concept

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PSYCHOLOGICAL FACTORS

Influenced by: •  Motivation •  Perception •  Learning and beliefs •  Attitudes

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FOUR TYPES OF BUYING BEHAVIOUR

Complex buying behaviour

Variety-seeking buying behaviour

Dissonance reducing buying behaviour

Habitual buying behaviour

High involvement Low involvement

Significance difference between brands

Few differences between brands

(Adapted from Assael, 1987:87)

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COMPLEX BUYING BEHAVIOUR

•  Consumer is highly involved in purchase •  Perceive significant differences among

brands •  Consumer is highly involved when product

is expensive, risky, purchased infrequently and highly self expressive.

•  Consumer has much to learn about product and marketers need to help buyer learn about the product (Assael, 1987)

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DISSONANCE REDUCING BUYING BEHAVIOUR

Customers are highly involved with an expensive, infrequent or risky purchase but see little difference among brands. Buyers respond in this case to good price or purchase convenience. After purchase, the customer may develop post purchase dissonance (discomfort) when they notice certain disadvantages about the purchase or hear favourable things about brand not purchased.

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HABITUAL BUYING BEHAVIOUR

•  There is low consumer involvement and little significant brand difference

•  Low cost frequently purchased products eg sugar.

•  Marketers use prices and sales promotion to promote buying.

•  Marketers may also differentiate product to promote buying.

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VARIETY SEEKING BUYING BEHAVIOUR

•  Low consumer involvement but significant perceived brand differences.

•  Brand switching is high for variety reasons eg buying biscuits

•  Market leader will try to promote habitual buying behaviour by dominating shelf space, keeping shelves fully stocked and running frequent reminder adverts

•  Minor brands may offer lower prices, special deals, coupons, free samples, adverts to encourage trying something new to encourage variety seeking.

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THE BUYER DECISION PROCESS

Need Recognition Information Search Evaluation of Alternatives Purchase Decision Post-Purchase

Behaviour

Adapted from Kotler and Armstrong, 2014:176)

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THE BUYER DECISION PROCESS

Ø Figure 9: Clearly, the “buying process starts long before the actual purchase and continues long after.”

Ø  “The way in which buyers move through the buying process: will depend on the nature of the buyer, the product itself, and the buying situation.”

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ADOPTION PROCESS FOR NEW PRODUCTS:

•  “How do consumers learn about totally new products for the first time and make decisions on whether to adopt them or not?

•  Stages in the Adoption Process:

1.  Awareness; 2.  Interest; 3.  Evaluation; 4.  Trial; and 5.  Adoption.