Understanding Consumer Buying Behaviour

Understanding Consumer

Buying Behavior

Chapter 4

McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

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The Psychological Importance of the Purchase

• High-involvement purchases: – Involve goods or services that are

psychologically important to the buyer because they address social or ego needs and therefore carry social and psychological risks.

– May also involve financial risk. – A high-involvement product for one buyer may

be a low-involvement one for another.

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Steps in the High-Involvement, Complex Decision-Making Process

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High-Involvement Purchase Decisions

• Step 1: Problem identification– Purchase-decision processes are triggered by

unsatisfied needs or wants.– We tend to focus on those needs that are

strongest. – A need can become stronger and be brought

to our attention by a deterioration of our actual state or an upward revision of our ideal state.

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• Step 2: Information search– People seek additional information about

alternatives brands until they perceive that the costs of obtaining more information are equal to the additional value or benefit derived.

– Opportunity cost of the time involved in seeking information.

– Psychological costs involved in searching for information.

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• Sources of information– Personal sources – Commercial sources – Public sources of information

• Commercial sources perform an informing function for consumers.

• Personal and public sources serve an evaluating and legitimizing function.

• The Internet is reducing the opportunity costs of information gathering

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• Step 3: Evaluation of alternatives– Consumers simplify their evaluation in several

ways. • They focus on their evoked set.• They evaluate each of the brands in the evoked

set on a limited number of product dimensions or attributes.

• They combine evaluations across attributes, taking into account the relative importance of those attributes.

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• Step 4: Purchase– Consumers usually select the source they

perceive to be best on those attributes most important to them.

• Step 5: Postpurchase evaluation– The person’s expectation level and evaluation

of how well the product actually did perform.– The evaluation feeds back into memory where

it can be recalled for a similar decision.– Consistent positive experiences can ultimately

lead to brand loyalty.

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Low-Involvement Purchase Decisions

• Most purchase decisions are low in consumer involvement. – Extensive information search is absent.

• Two low-involvement buying decisions: – Inertia

• Consumers either buy brands at random or buy the same brand repetitively to avoid making a choice.

– Impulse purchasing and variety seeking• Occurs when consumers impulsively decide to buy

a different brand from their customary choice or some new variety of a product.

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• Understanding level of involvement enables better marketing decisions– Product design and positioning decisions

• High-involvement goods needs to be designed to provide at least some benefits that are demonstrably superior.

• Firms that market low-involvement goods need to pay particular attention to basic use-related attributes.

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– Pricing decisions• High-involvement: Purchase of brand they

believe will deliver the greatest value.• Low-involvement: Products are largely or

solely bought on the basis of low price.

– Advertising and promotion decisions• High-involvement: Promotional vehicles

that communicate in greater detail.• Low-involvement: Focus on a few main

points and deliver the message frequently.

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– Distribution decisions• Low-involvement: Extensive retail distribution

is particularly important.• High-involvement: Extensive retail coverage is

less critical.– Strategies to increase consumer involvement

• Link the product to some involving issue.• Tie the product to a personally involving

situation.• Add an important feature to an unimportant

product.

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The Marketing Implications of Psychological and Personal Influences

• Perception and memory– Perception is the process by which a person

selects, organizes, and interprets information.

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• Perception process for high-involvement products:– Exposure to a piece of information, such as a

new product, an ad, or a friend’s recommendation, leads to attention, then to comprehension, and finally to retention in memory.

– Once consumers have fully perceived the information, they use it to evaluate alternative brands and to decide which to purchase.

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• Perception process for low-involvement products:– Consumers have information in their

memories without going through the sequence of attention and comprehension.

– Exposure may cause consumers to retain enough information so that they are familiar with a brand when they see it in a store.

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• Selectivity and organization guide consumers’ perceptual processes and help explain why different consumers perceive product information differently.– Selectivity: Even though the environment is

full of product information, consumers pick and choose only selected pieces of information and ignore the rest.

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– Perceptual vigilance: For high-involvement purchases, consumers pay particular attention to information related to the needs they want to satisfy and the particular brands they are considering for purchase

– Perceptual Defense: Consumers tend to avoid information that contradicts their current beliefs and attitudes.

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• Memory limitations– Limitation of the human memory concerns marketers.

• Human memory works in two stages:– Information from the environment is first processed by

the short-term memory, which forgets most of it within 30 seconds or less.

– Some information is transferred to long-term memory.– For information to be transferred to long-term memory

for later recall, it must be actively rehearsed and internalized.

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• Perceptual organization– Categorization helps consumers process

known information quickly and efficiently.– Integration means that consumers perceive

separate pieces of related information as an organized whole.

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• Effects of stimulus characteristics– Personal characteristics influence the

information consumers pay attention to, comprehend, and remember.

– Message characteristics and the way it is communicated influence consumers’ perceptions.

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• Needs and Attitudes– The Fishbein model specifies how consumers

combine evaluations of a brand across multiple attributes to arrive at a single overall attitude toward that brand.

– This approach is compensatory in nature.

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• Noncompensatory attitude models– The mental processes involved in forming an

attitude are quite complex.– Consumers may evaluate alternative brands

on only one attribute at a time particularly with low-involvement products.

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The Marketing Implications of Psychological and Personal Influences• Marketing implications of attitude models

– Marketers must have information about:• The attributes or decision criteria used to evaluate

a particular product category.• The relative importance of those attributes to

different consumers.• How consumers rate their brand relative to

competitors’ offerings on important attributes.– Multiattribute models show the consumer’s

ideal combination of product/service attributes, each of which is weighted as to its relative importance.

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• Attitude change– Changing attitudes toward the product class

or type.– Changing the importance attached to

attributes.– Adding a salient attribute to the existing set.– Improving ratings of the brand on one or more

salient attributes.– Lowering the ratings of the salient product

characteristics of competing brands.

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• Demographics influence– The nature of consumers’ needs and wants.– Their ability to buy products or services to

satisfy those needs.– The perceived importance of various

attributes or choice criteria used to evaluate alternative brands.

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• Personality and self-concept– Brands are perceived to have personalities,

and consumers are likely to choose brands whose personalities match their own.

– Consumers tend to choose brands with personalities that match either their own self-concept or their ideal self-concept.

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• Lifestyles– To obtain lifestyle data, consumers are asked

to indicate the extent to which they agree/disagree with a series of statements involving price consciousness, family activities, spectator sports, traditional values, adverturesomeness, and fashion.

– Lifestyle typologies or psychographic profiles.

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The Marketing Implications of Social Influences

• Culture– Culture is the set of beliefs, attitudes, and

behavior patterns shared by members of a society and transmitted from one generation to the next through socialization.

– Cultural differences across countries create both problems and opportunities for international marketers.

– Subcultures

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• Social class– Status groupings largely based on similarities

in income, education, and occupation.– It is possible to infer certain behavior

concerning some products and services, including class members’ reactions to advertising.

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• Reference groups include a variety of groups that affect consumer behavior through:

• Normative compliance• Value-expressed influence: Involves conforming to

gain status within one’s group.• Informational influence: Involves the use of certain

influentials to help assess the merits of a given product/service.

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• The Family– It serves as the primary socialization agent.– It has a great and lasting influence on its

younger members’ attitudes toward various brands and stores.

– Family members tend to specialize in the purchase of certain products either because of their interest or expertise or the role structure of the family.

– Influence varies across countries.– Family life cycle.

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Take-Aways

• Not all purchase decisions are equally important or psychologically involving for the consumer. – People engage in a more extensive decision-

making process, involving a more detailed search for information and comparison of alternatives, when buying high-involvement goods and services than when purchasing more mundane, low-involvement items.

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Take-Aways

• A given marketing strategy will not be equally effective for both high- and low-involvement products. – The consumer marketer’s first task, then, is to

determine whether the majority of potential customers in the target segment are likely to be highly involved with the purchase decision or not.

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Take-Aways

• For low-involvement products, marketers need to focus their promotional messages on a few frequently repeated points and to distribute such products extensively.

• Consumers often prefer different brands because of differences in their psychological or personal characteristics, such as their perceptions, memories, attitudes, and lifestyles.

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Take-Aways

• Regardless of the consumer’s level of involvement with a product category, consumers often prefer different brands because of differences in their social relationships, such as their culture, social class, reference groups, and family circumstances.

Understanding Consumer Buying Behaviour

Education

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