The topic of consumer behaviour is one of the massively studied topics by the researchers and marketers in the past and still being studied. Researchers show different reasons as to why consumer behaviour has been the topic of many academics and researchers. One of the common views is that understanding consumer behaviour has become a factor that has a direct impact on the overall performance of the businesses (Kotler and Keller, 2012). Another view suggests that understanding consumer behaviour has become crucial especially due to fierce competition in retail industry in the UK and worldwide (Lancaster et al, 2002). This chapter will introduce some other areas of research background of consumer behaviour addressing the works of researchers and marketers. Moreover, consumer decision making process, in particular, five stages of consumer decision making process will be discussed in detail.
It is worth noting that consumer buying behaviour is studied as a part of the marketing and its main objective it to learn the way how the individuals, groups or organizations choose, buy use and dispose the goods and the factors such as their previous experience, taste, price and branding on which the consumers base their purchasing decisions (Kotler and Keller, 2012).
One of such studies of consumer buying behaviour has been conducted by Acebron et al (2000). The aim of the study was to analyze the impact of previous experience on buying behaviour of fresh foods, particularly mussels. In their studies the authors used structural equation model in order to identify the relationship between the habits and previous experience on the consumer buying decision. Their findings show that personal habits and previous experience on of the consumers have a direct impact on the consumers’ purchase decision in the example of purchasing fresh mussels. They also found that the image of the product has a crucial impact on the purchasing decision of the consumer and further recommended that the product image should continuously be improved in order to encourage the consumers towards purchasing.
Another study conducted by Variawa (2010) analyzed the influence of packaging on consumer decision making process for Fast Moving Consumer Goods. The aim of the research was to analyze the impact of packaging for decision making processes of low-income consumers in retail shopping. A survey method has been used in order to reach the research objectives. In a survey conducted in Star Hyper in the town of Canterville 250 respondents participated. The findings of the research indicate that low-income consumers have more preferences towards premium packaging as this can also be re-used after the product has been consumed. Although the findings indicate that there is a weak relationship between the product packaging and brand experience. However, it has been proven by the findings of the research that low-income consumers have greater brand experience from the purchase of ‘premium’ products when compared to their experience from purchasing ‘cheap’ brand products.
Lee (2005) carried out study to learn the five stages of consumer decision making process in the example of China. The researcher focuses on the facts that affect the consumer decision making process on purchasing imported health food products, in particular demographic effects such as gender, education, income and marital status. The author employed questionnaire method in order to reach the objectives of the research. Analysis of five stages of consumer decision making process indicate that impact of family members on the consumer decision making process of purchasing imported health food products was significant.
The author further explains this by the fact Chinese tradition of taking care of young and old family members have long been developed and marriage is considered to be extremely important in Chinese tradition. This reflects in the findings of the study that the purchase of imported health food products made by a person for the people outside the family is declined significantly by both male and female Chinese after they get married.
Five Stages Model of consumer decision making process has also been studied by a number of other researchers. Although different researchers offer various tendencies towards the definitions of five stages, all of them have common views as they describe the stages in similar ways. One of the common models of consumer decision making process has been offered by Blackwell et al (2006). According to him, the five stages of consumer decision making process are followings: problem/need recognition, information search, evaluation of alternatives, purchase decision made and post-purchase evaluation.
Each stage is then defined by a number of researchers varying slightly but leading to a common view about what each stage involves. For example, according to Bruner (1993) first stage, need recognition occurs when an individual recognizes the difference between what they have and what they want/need to have. This view is also supported by Neal and Questel (2006) stating that need recognition occurs due to several factors and circumstances such as personal, professional and lifestyle which in turn lead to formation of idea of purchasing.
In the next stage, consumer searches information related to desired product or service (Schiffman and Kanuk, 2007). Information search process can be internal and external. While internal search refers to the process where consumers rely on their personal experiences and believes, external search involves wide search of information which includes addressing the media and advertising or feedbacks from other people (Rose and Samouel, 2009).
Once the relevant information about the product or service is obtained the next stage involves analyzing the alternatives. Kotler and Keller (2005) consider this stage as one of the important stages as the consumer considers all the types and alternatives taking into account the factors such as size, quality and also price.
Backhaus et al (2007) suggested that purchase decision is one of the important stages as this stage refers to occurrence of transaction. In other words, once the consumer recognized the need, searched for relevant information and considered the alternatives he/she makes decision whether or not to make the decision. Purchasing decision can further be divided into planned purchase, partially purchase or impulse purchase as stated by Kacen (2002) which will be discussed further in detail in the next chapters.
Finally, post-purchase decision involves experience of the consumer about their purchase. Although the importance of this stage is not highlighted by many authors Neal et al (2004) argues that this is perhaps one of the most important stages in the consumer decision making process as it directly affects the consumers’ purchases of the same product or service from the same supplier in the future.
The most noteworthy writers that serve as academic advocates of The Five Stage Model of consumer decision making include Tyagi (2004), Kahle and Close (2006) Blackwell et al. (2006), and others.
It is important to note that The Five Stage Model is not the only model related to consumer decision-making, and there are also a range of competing models that include Stimulus-Organism-Response Model of Decision Making developed by Hebb in 1950’s, Prescriptive Cognitive Models, The Theory of Trying (Bagozzi and Warsaw, 1990), Model of Goal Directed Behaviour (Perugini and Bagozzi, 2001) and others. All of these models are analysed in great detail in Literature Review chapter of this work.
Factors Impacting Consumer Buyer Behaviour
It has been established that the consumer buying behaviour is the outcome of the needs and wants of the consumer and they purchase to satisfy these needs and wants. Although it sounds simple and clear, these needs can be various depending on the personal factors such as age, psychology and personality. Also there are some other external factors which are broad and beyond the control of the consumer.
A number of researches have been carried out by academics and scholars on identifying and analyzing those factors affecting the consumers’ buying behaviour and as a result, various types of factors have been identified. These factors have been classified into different types and categories in different ways by different authors. For instance, Wiedermann et al (2007) classified them into internal and external factor. On the other hand, Winer (2009) divided them into social, personal and psychological factors. Despite the fact that they have been classified into different groups by different authors they are similar in scope and purpose (Rao, 2007).
There is a wide range of factors that can affect consumer behaviour in different ways. These factors are divided by Hoyer et al. (2012) into four broad categories: situational, personal, social and cultural factors.
Situational factors impacting consumer behaviour may include location, environment, timing and even weather conditions (Hoyer et al., 2012). In order to benefit from situational factors major retailers attempt to construct environment and situations in stores that motivate perspective customers to make purchase decision. Range of available tools to achieve such an outcome include playing relaxing music in stores, producing refreshing smells in stores and placing bread and milk products in supermarkets towards the opposite end of stores to facilitate movement of customers throughout the store to make additional purchases etc.
The temporary nature of situational factors is rightly stressed by Batra and Kazmi (2008).
Personal factors, on the other hand, include taste preferences, personal financial circumstances and related factors. The impact of personal factors on consumer decision-making is usually addressed by businesses during market segmentation, targeting and positioning practices by grouping individuals on the basis of their personal circumstances along with other criteria, and developing products and services that accommodate these circumstances in the most effective manner.
According to Hoyer et al. (2012) social factors impacting consumer behaviour arise as a result of interactions of perspective consumers with others in various levels and circumstances. Targeting members of society perceived as opinion leaders usually proves effective strategy when marketing products and services due to the potential of opinion leaders to influence behaviour of other members of society as consumers.
Lastly, cultural factors affecting consumer behaviour are related to cross-cultural differences amongst consumers on local and global scales. Culture can be defined as “the ideas, customs, and social behaviour of a particular people or society” (Oxford Dictionaries, 2015) and the tendency of globalisation has made it compulsory for cross-cultural differences amongst consumers to be taken into account when formulating and communicating marketing messages.
Marketing mix or 4Ps of marketing is one of the major concepts in the field of marketing and each individual element of marketing mix can be adopted as an instrument in order to affect consumer behaviour.
Importance of the marketing mix can be explained in a way that “successful marketing depends on customers being aware of the products or services on offer, finding them available in favourably judging that practitioners of the offering in terms of both price and performance” (Meldrum and McDonald, 2007, p.4).
Core elements of marketing mix consist of product, price, place and promotion. Marketing mix has been expanded to comprise additional 3Ps as processes, people and physical evidence.
Product element of marketing mix relates to products and services that are offered to customers to be purchased. Products can have three levels: core, actual and supporting products. For example, core product in relation to mobile phones can be explained as the possibility to communicate with other people in distance. Actual product, on the other hand, relates to specific brand and model of a mobile phone, whereas augmented product may relate to product insurance and one-year warranty associated with the purchase of a mobile phone.
Price represents another critically important element of marketing and four major types of pricing strategies consist of economy, penetration, skimming, and premium pricing strategies (East et al., 2013).
Place element of marketing mix relates to point of distribution and sales of products and services. Advent of online sales channel has changed the role of place element of marketing mix to a considerable extent.
Promotion element of marketing mix refers to any combination of promotion mix integrating various elements of advertising, public relations, personal selling and sales promotions to varying extents (Kotler, 2012).
Processes, on the other hand, refer to business procedures and policies related to products and services. For example, integration of a greater range of payment systems such as PayPal, SAGE Pay and Visa in online sales procedures may have positive implications on the volume of sales by creating payment convenience to customers.
People element of marketing mix is primarily related to skills and competencies of the workforce responsible for customer service aspect of the business. Importance of people element of marketing mix in general, and providing personalised customer services in particular is greater today than ever before.
Physical evidence relates to visual tangible aspects of a brand and its products. For instance, for a large supermarket chain such as Sainsbury’s physical evidence is associated with design and layout of a store, quality of baskets and trolleys, layout of shelves within the store etc.
It can be forecasted that further intensification of competition in global markets and more intensive search of businesses for additional bases for competitive advantage may result in emergence of additional ‘P’s to compliment the framework of marketing mix in the future.
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