Consumer Buying Behaviour Essays
Understanding consumer behaviour is essential to succeed in business. As Solomon et al. (2013) stresses, businesses exist to satisfy consumer’s needs. By identifying and understanding the factors that influences their customers, firms have the opportunity to develop a more efficient strategy, marketing message and advertising campaigns that is more in line with the needs and ways of thinking of their target consumers (Perreau, 2015).
The targeted consumer has been identified as a recent retiree who is in her early 60s. This customer has just broken her laptop which was given to her as a gift from her daughter, four years ago and is looking for a replacement. As she is not in tune with the latest technology developments and vast option available for her, she does not know which option will best suit her. Additionally due to this she would prefer a device with simplicity, ease of use but also longevity.
This report will examine the decision making process in depth, analysing elements such as; characteristics that affect this consumer behaviour, types of buying decisions, component of decision making process and conclude with marketing recommendations.
The next section of this report will outline the different characteristics that affect consumer’s behaviour.
2. The Characteristics that Affect Consumer Behaviour.
‘ Figure 1, shows the factors influencing consumer behavior. There are four different factors all which play a crucial role in determining the action of consumers. It is important that marketers understand these affecting characteristics as they can determine the difference between buying or not.
Figure 1, Factors influencing consumer behaviour. (Data collected 11am on 9th March 2015.)
Source: Blogspot.com (2015)
1. Social factors.
‘ As the target customer is an elderly woman in her early 60s, her family and friends will play a major role in influencing which technological device and brand she would consider (Mason and Beardon, 1978). Especially as this consumer does not have the same level of knowledge, ownership and interest in technology. Davis (2013) report shows seniors in similar situations tends to rely on younger generations for advice, education and help in this area as they would have grew up exposed to this era.
2. Personal factors.
‘ As this consumer is in her early 60s, she has no interest in the latest stylish brands and expensive designs but just wants a simple and manageable device that will serve the basic functions of a laptop. A laptop that is easy to use is particular important for this customer as women over the age of 55 are particularly influenced by the ease of use of a technology product (83% vs. 70% of senior men), (Davis,2013)
‘ Price wise, she is looking for something of reasonable price, as she is now a retiree and is planning on paying for this purchase with her personal savings, her budget is ??400.
‘ As technology devices are long term investments the buyer requires something that will be great quality and of great longevity.
‘ It appears that a segment of seniors also value the quality of their purchasing journey from start to finish. Three fifths (60%) of over-55s who are influenced by the level of after-sales service also value the length of guarantee, whilst 41% of this group also care about the level of customer service in-store (vs. 17% of all seniors). (Davis,2013)
3. Psychological factors.
‘ This consumer’s previous experience with a functional laptop has influence how she know views laptops in comparisons to desktops, as she finds the portable device is handy to carry around the house and bring along when traveling to visit her children.
3. The Types of Consumer Buying Decisions.
‘ Consumers buying decisions behaviour can vary depending on the type of goods involved and the factors associated with the particular product. Figure 2 shows the four different categories and how they are each classified. Depending on how involved the consumer is with the purchase and how significant the difference is between the brands available, a buying decision can be classified as complex, variety-seeking, dissonance-reducing and habitual.
Figure 2 Four types of buying decision behavior. (Data collected 11am on 9th March 2015.)
Source: Launchengineering.com (2015)
‘ The purchasing of a laptop can be classified as a complex buying behaviour. This is due to the fact that the product is expensive and the consumer will need to be highly involved with the purchase. As there is a wide range of options available with significant differences among each brand, this purchasing decision will take a long time especially because the consumer has much to learn regarding the product category. There is also a high risk associated with this purchase as she particularly wants a product with simplicity but with great quality and longevity. Kjell (1977).
‘ The fact that this is a long term investment and will be costly indicates that the consumer will have to be highly involved with the buying decision. She will be required to spend an extensive period of time evaluating the different options available which according to keynote market report (2014) of the UK market, is a vast range including personal computers, laptops, notebooks and tablets computers.
‘ As mention before, this product will be costly and price being the biggest influence for consumers of all ages when it comes to purchasing technology products, with 84% saying it is one of their main considerations (86% of over-55s), more attention and effort will have to be paid before making any purchasing decision, in order to ensure it will be money spent efficiently. (Davies,2013)
‘ The purchasing of televisions, household appliances such as washing machine and a car would also involve a complex buying behaviour decision. In the state of buying a new television as watching TV is still an extremely popular activity amongst most seniors with 92% of seniors compared to 85% of the younger generations more likely to have a television within their household, they would therefore equally invest their time and money in the purchasing decision as it is an enjoyable hobby for them. (Davies,2013)
4. The Components of the Decision-Making Process.
1. Problem recognition.
‘ This is the first stage when the buyer recognises a problem or need. The need can be triggered by internal or external stimuli. Internal stimuli arises from an individual’s average need while external need arises from the environment in which we live in. (Armstrong and Kotler, 2013). This consumer’s need began when her old laptop broke down and as a result she decided it was time for her to replace it.
2. Information Research.
‘ As the potential buyer interest as been triggered by the breakdown of her laptop she now has a drive to search for and gather information about the possible products that could replace it. This stage is usually one of the longest processes as information can be gathered from a range of different sources. It is also an extremely important stage as this is when the consumer’s opinion formulation often begins.
‘ Research shows that over twice as many seniors rely on younger generations for advice, education and help with technology. This is certainly the case for this customer as she is not familiar with the advancement in technology she starts with her personal source which is usually the most effective and influential and draws on the opinions and experiences of younger friends and family members. (Davis, 2013)
‘ However most of her personal source would have gather much of their own knowledge from commercial sources such as advertisement, online sources and salespersons which information about the product were provided from the company’s market.
‘ Public source will also have an influence as the elderly rely more heavily on newspaper, television and salespersons for marketing information than other generation grouping (Martin, 2013).
3. Information Evaluation.
‘ After gathering relevant information the next step is to evaluate the various alternatives available in the market. Figure 3, shows the current desktops and laptops in the market and each brand’s personality ranking.
‘ The consumer will try to choose the best option available, while taking into consideration her need, taste and budget. This consumer particularly required a device that is of ease of use but can still perform all basic roles of a laptop. An affordable option is also vital as she is now a retiree but will be using her savings for this purchase. She also wanted a reliable brand that will be durable and last the upcoming years.
Figure 3 Desktops and laptops brand’s personality.
Source: Mintel (2014)
4. Purchase Decision.
‘ After the brand evaluation stage, the intention to buy a specific brand will be made in this stage. This could generally be the buyer most preferred brand but two factors can come in between these processes, the attitude of others and an unexpected situational factor.
‘ This buyer has made a decision to go with the brand Hewlett-Packard, a highly used brand which has also earned the strongest amount of commitment from over-55s, who trust it and much prefer it to newer brands (Munson, 2014)
‘ She found the ‘HP 15-r101na Laptop’ most suited to her as the laptop cost a reasonable price of ??299 while still meeting all her desired needs.
5. Post purchase Evaluation
‘ This is the final stage and occurs after the product has been the purchased and the customer analysis whether the product was useful and fulfilled his/her needs.
‘ This customer was highly satisfied with her overall experience when purchasing her new HP laptop. The staff at Argos provided her with excellent service and they were very friendly and informative throughout the whole purchase process, offering her with great advice and deals.
‘ She has also received a two year laptop warranty from the manufacturer, which has given her a great sense of relief and security.
‘ Additionally she is greatly satisfied with the specific laptop she chose to buy; she has found it easy to manoeuvre and is currently enjoying using it. She feels pleased with her purchase.
5. Marketing Recommendations.
Based on the analysis on the factors that affect consumer behaviour, the types of buying decisions and the components of the decision making process the following suggestions and recommendations can be made:
‘ Manufacturers should focus on producing excellent quality products for their consumer, as all consumers regardless of their demographics expect products of high quality especially when it comes to long term investment. Additionally the manufacturer should work on building products that offer simple functionality that will be favoured by many in this particular market.
‘ As price is the biggest influence for consumers of all ages when it comes to purchasing technology products, manufacturer should work on providing the most competitive price. Marketers can then emphasise this affordable price and provide additional deals in order to attract potential consumer and assist in gaining an overall bigger share in the market.
‘ Marketer’s that tailor products for this market should aim to highlight specification features in order to up sell their devices, whilst ensuring they avoid using too much ‘jargon’ that will alienate the buyers, as this particular market is not familiar with the current technology terms.
‘ Marketers should make use of reference group as these sources have proved to be the most influential. A direct focus should be made on friends and family in their advertising strategies and personal selling strategies, educating these groups more about what the brand can offer them.
‘ Products and features that are complicated by nature could be more attractive to seniors if walk-through demonstrations are offered in-store or available as part of after-sales service schemes. This will also help build a great relationship with their consumers as seniors are more concerned than younger generation with their overall sales experience as well as peace of mind.
‘ As the length of product guarantees is one thing that really matters to this age group, with 35% of seniors saying it influences their purchasing decisions, compared with just 23% of under-55s, I would also recommend marketers to extend their warranty period in order to persuade the consumers to purchase their products. (Davis, 2013)
In summary this report has identified that there are different characteristics that can affect consumer behaviour and it is extremely crucial that marketers try to understand this in order to successfully meet these processes with utmost effectiveness and ensure sales.
In the state of complex buying behaviour when buyers are highly involved with the purchasing decision, marketers will find advantage of this process if they provide the buyer with relevant, concise but sufficient information about their brand, as it will greatly assist consumers while gaining sales.
The senior market tends to be of different demographics to the younger generations and because of this marketers should not neglect them but pay attention to their particular desires and needs when purchasing goods in order to win their sales.
7. List of References.
Armstrong G. and Kotler P., (2013) Marketing an Introduction. 11th Global edn. Pearson Education.
Blogspot.com (2015) 5 March, 2015. Available at http://1.bp.blogspot.com/-z9S6aasnBbQ/UkRjZaSfrAI/AAAAAAAAABk/m1QcrVyFp-Q/s1600/buying_customer_factors.gif [Accessed: 5 March, 2015].
Davis P. (2013) Technology and the Over 55s. Mintel. [Online] Available at: http://academic.mintel.com.ezproxy.herts.ac.uk/display/650142/?highlight#hit1 [Accessed: 10 March, 2015].
Keynote (2011) Computer Hardware Market Report. Keynote. Available at: https://uhvpn.herts.ac.uk/market-intelligence/view/product/10455/computer-hardware/chapter/1/,DanaInfo=www.keynote.co.uk+executive_summary
[Accessed: 10 March, 2015].
Kjell G., (1977) Industrial Marketing Management, Vol. 6 Issue 6, p439-445. 7p. 1 Black and White Photograph, 3 Charts. Business Source Complete [Online] Available at: http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=7335216&site=bsi-live [Accessed: 7 March, 2015].
Launchenginnering.com (2015) 5 March, 2015. Available at http://www.launchengineering.com/images/Types%20of%20buying%20behavior.jpg [Accessed: 5 March, 2015].
Mason, J. B., and Beardon, W. O. (1978), Profiling the Shopping Behavior of Elderly Consumers The Gerontologist, 18, 454-461. [Online] Available at: http://www.acrwebsite.org/search/view-conference-proceedings.aspx?Id=5885 [Accessed: 7 March, 2015].
Munson R. (2014) Desktop and Laptop Computers ‘UK. Mintel. [Online] Available at: https://uhvpn.herts.ac.uk/display/679757/,DanaInfo=academic.mintel.com+
[Accessed: 12 March, 2015].
Solomon, M., Bennett R., and Josephine P. (2013) Consumer Behaviour [Online] Available at: https://books.google.co.uk/books?hl=en&lr=&id=ajDiBAAAQBAJ&oi=fnd&pg=PP1&dq=why+marketers+should+understand+consumer+behaviour+&ots=ewRRQx3hHI&sig=Wi4NrOPn1MHETuHl9tnysdO5AfA&redir_esc=y#v=onepage&q=why%20marketers%20should%20understand%20consumer%20behaviour&f=false
[Accessed: 25 February, 2015].
Towle, J. G. and Martin, C. R. (1976), “The Elderly Consumer: One Segment of Many?” in The Elderly Consumer, ed. F. E. Waddell, Columbia, MD: The Human Ecology Centre, Antioch College, pp. 232-242. [Online] Available at: http://www.acrwebsite.org/search/view-conference-proceedings.aspx?Id=5885
[Accessed: 7 March, 2015].
Perreau F. (2015) The Consumer Factor. [Online] Available at: http://theconsumerfactor.com/en/4-factors-influencing-consumer-behavior/
[Accessed: 25 February, 2015].
Consumer behaviour is a complicated and diverse area of study. Since marketing is based on identifying, anticipating and providing customer needs it is important to understand them. There are two predominant types of buying: consumer buying, which consists of buying products for personal use, and organisational buying, which involves buying for organisational purposes. Consumer buying behaviour is defined as the buying behaviour of final consumers, individuals and households who purchase goods and services for personal consumption (Kotler et. al., 2001, pg. 858).
Purpose of choosing this topic:For a marketer to satisfy customer needs efficiently and lucratively, understanding consumer behaviour is essential. Research into consumer behaviour allows the marketer to create target groups of people with common interests, values, beliefs and patterns of behaviour which will be discussed further in this proposal. Once a market segment has been identified, marketers can research the target market more thoroughly and the marketing mix, product, price, promotion and place can be adjusted to ensure the product position is correct.
This dissertation will identify the main factors influencing consumer behaviour patterns, particularly in textile retailing. It will examine how buyer characteristics influence buyer behaviour and also how retailers react to such characteristics. In particular this proposal will look at the cultural factors, demographic factors and psychological factors that influence consumer buying. Also, it will investigate on different types of buying behaviour that helps to find how and why consumers make their purchase decisions. It is vital to note that the purchase of a particular product does not always derive the same type of decision making behaviour (East, 1997: 19). For example, an affluent businessman who enjoys collecting cars may not undergo complex buying behaviour as opposed to an average earning salesman who is buying a car for transportation purposes.
In order to achieve the objectives stated above, the research will utilise online survey and will consider the scope to which:
- Online community members share their views on buying;
- The sharing of pre-buying experience differs from the sharing of post-buying experience;
- Comments made by third party and direct contact through an online community affect buying pattern;
- Comments received on different company websites affect buying pattern.
Also, the research will utilise online database: Mintel and Emerald, and published material: books, articles on newspaper, magazines, or journals.
There is no purpose at this stage to employ any company information for preparing the dissertation. The author wants to ensure if he needs permission from the online community to approach individuals to take part in the survey. Participants will be at liberty to withdraw from the survey at any moment of time.
5. To whatextend the existing published material meets the proposal
The dissertation intends to explore the knowledge of types and elements of buying behaviour that influence consumer buying behaviour such as cultural factors, demographic factors and psychological factors. This will significantly assist the marketers to invade the competitive market and come out with fruitful wings.The relationship between different types of consumer buying behaviour with the level of consumer involvement and the degrees of differences between brands. The level of involvement in a purchasing a product is related to the importance of the purchase, the risks involved and the type of cognitive processing that is generated (East, 1997: 19). It helps the marketer to keep a better hold on the competing market.
Cultureaffects consumer behaviour in a variety of ways. It relates to customs and beliefs that are learned from the society in which an individual grows up. Aspects of our socio-culture, such as sub-culture, social class and reference groups play different roles in influencing consumers. A common pattern of behaviour can be observed within groups. Cultural change occurs at a very slow pace and can be seen to marketers as threats or opportunities. Cultural elements that influence consumer behaviour can also be said to be environmental influences.
- ‘A reference group is one that the individual tends to use as the anchor point for evaluating his/her own beliefs and attitudes' (American Marketing Association, 2004).
- ‘Sub-culture plays an important part to marketers because of their influence on brands and types of product and services demanded by their members' (Chisnall, 1975, p.98). Mintel (2003) reports that an emerging youth sub-culture, in which extreme sports is the focal point. He estimates that consumers spent £4.5 billion on extreme sports goods in 2003, an increase of 29% on 1998. (See appendix 1, figure 3)
Demographicelements (ref Fig.7 appendix.3) can significantly affect consumer behaviour. As an individual's stage of life progresses, so will the needs and wants of a product. To help marketers make a clearer distinction between demographic groups for market segmentation classification bases have been developed.
- ‘A Classification of Residential Neighbourhoods' (ACORN) is a popular geo-demographic technique used as a segmentation base. ACORN maps geographically the concentrations of a particular type of individual and can be useful for helping marketers decide upon store locations and targeting direct mailing (Beaumont, 1989).
- Lansing, J and Morgan, J (1955) have devised a popular and successful break down of the life cycle of families to successfully target a market. Each stage influences consumer behaviour in a different way (see table1 appendix2). Mintel (2001) reports that the greatest time of expenditure for women in the AB social grade are during the bachelor stage where 56% of women spent more than £500 on clothes in a year. However, during the newly married couples, full nest 1 and full nest 2 periods the percentage of women that spends £500 a year on clothes decreases to 35%. This percentage increases at the empty nest stage to 46%. (See appendix 3, figure 6)
Psychological factorsare related to perceptions, motivations, attitudes and personality of a consumer so it crucial to know how life patterns influence purchasing decisions. ‘Psychographics are usually based on demographic information as well as ratings of consumer's activities, interests and opinions' (Williams, K, 1981, pg.91).
- Lifestyles and patterns have strong influences on consumer behaviour. Figure 7 (see appendix. 3) illustrates the main factors that form a lifestyle.
- Perception and motivation relates to an individual's interpretation of a product and company. Maslow recognises that people with intensive needs can be motivated to purchase the goods if identified properly (Lancaster, G, Massingham, L, and Ashford, R, 2002, pg. 80). With this, marketer can convey good brand awareness.
- The subject of personality is a very complicated area. There are many variables that reflect a comprehensive view of a personality. This makes it difficult for marketers to understand the link personality has with consumer behaviour (Williams, K, 1981, pg.133)
Stage 1: Area of interest identified
24 March ‘10
Stage 2: Specific topic selected
24 March ‘10
Stage 3: Topic refined to develop dissertation proposal
6 April ‘10
Stage 4: Proposal written and submitted
22 April ‘10
Stage 5: Collection of data and information
30 June ‘10
Stage 6: Analysis and interpretation of collected data
10 July ‘10
Stage 7: Writing up
31 July 10
Stage 8: Final draft prepared - submission of dissertation
31 Aug ‘10
Final Deadline of dissertation
17 Sept ‘10
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