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Consumer Behaviour & the Decision Making Process

 

Understanding consumer buyer behaviour, and the decision making process, is the key to reaching and engaging your customers, and persuading them to buy from you.

Every successful marketing campaign starts with an understanding of the customers’ buying behaviour. This knowledge helps you reach your customers through the right channels at the right time, target them with the right messages, and ultimately influence their buying decisions.

Definition of Consumer Behaviour

Here's Philip Kotler's definition of consumer behaviour:


“Consumer buying behaviour refers to the buying behaviour of final consumers, those individuals and households who buy goods and services for personal consumption.”


Influences on Consumer Behaviour

And consumer buying behaviour is influenced by four major factors:

  • Psychological – motivation, perception and attitudes
  • Personal – factors in life cycle such as age, occupation, stage in family life cycle
  • Social – friends, family, trade unions and professional bodies
  • Cultural – the environment we grow up in, country and religion

Let's take a closer look at each of these factors...

Psychological Factors

The three main psychological factors are motivation, perception, and attitudes.

Everyone’s motivations are different. Someone who lives in poverty is going to be concerned with food, drink and shelter, rather than a new BMW. However, a person who has enough material wealth might be motivated by self-fulfilment and want to buy courses or knowledge for self-improvement. What we buy is very much influenced by our motivation and goals in life depending where we are on Maslow’s hierarchy of needs.

Again, individuals all have a different perception of the world, which is unique to them. Some people feel that the world is a negative place and others feel it is full of optimism. This affects what people buy and their reaction to products.

Attitudes lead people to behave in a fairly consistent way towards thoughts, feelings and tendencies. If you are old fashioned or conservative in your attitudes then this will affect what you buy, wear or think across the board. Attitudes are quite difficult to change because they are set at a fairly young age. It is a challenge for marketing people to try to change attitudes but they do try in the way they promote and associate celebrity to products.

Personal Factors

Personal factors such as age dictate which products and services we consume and how we react to different marketing messages.

Stage in the family life-cycle is important as to how much disposable income we have. Whether we are married, single, with small or grown up children affects what we buy.

Occupation influences our income, status, attitudes and expectations. We tend to buy more expensive, luxury items, the more of a professional job we have.

Lifestyle affects what we buy. Someone who prefers an outdoor lifestyle will buy outdoor products. Also someone who is a couch potato might buy more junk food and Sky TV subscription.

Social Factors

We are influenced by three groups of people.

The primary group of social influencers includes our family, friends and work colleagues. We are also influenced by secondary groups such as trade unions and professional bodies. Thirdly, the sort of group that we would 'like' to belong to also affects what we buy. Examples that might fall into this inspirational group include country clubs, marketing bodies, Mercedes owners club, etc.

Cultural Factors

We are all influenced by the culture we grew up in. Areas of influence differ between countries, sub-cultures (such as class in Britain or caste in India), religion, and age related culture.

The Decision Making Process

Most consumers go through a series of stages when making the decision to buy a product:

  1. Need recognition
  2. Information search
  3. Evaluate alternatives
  4. Purchase decision
  5. Post-purchase evaluation

We'll take a look at each in turn and how they relate to the factors that influence buyer behaviour that we looked at before.

1. Need Recognition

The first stage is recognising that there is a need for a product or recognising that there is a problem to be solved. This might be realising that you are hungry or realising that your car is old and rusty and you could do with a new one, for example.

2. Information Search

After realising you need or want a product, you have heightened awareness and you start looking for information. You might start noticing billboard advertising for different models of car, you might talk to family and friends about different models, or you might read articles in magazines to see which car would be a good option.

Information is usually obtained from a variety of sources. These are personal such as family or friends. It can be commercial sources such as advertising, packaging or sales promotions or public information such as watchdog organisations or mass media. Also experiential information such as handling or using the product is important. For a car this is demonstrated by a test drive.

3. Evaluation of Alternatives

Once all the information has been gathered, you begin to evaluate a choice. There are no set rules about doing this – Kotler suggests that people look for benefits and weigh them up product against product. It might be that the family is the biggest influence or price is the winning factor in the end.

4. Purchase Decision

After evaluation, the consumer wants to buy the product that will meet their need. The task for the marketer is to ensure that the purchase decision is put into effect easily. Everything has to be right for the customer to buy. Factors include good customer service, a well-stocked range of products, which can be easily ordered and paid for as well as easily delivered within a certain period.

5. Post-purchase Evaluation

After purchasing the product, the consumer will assess whether the product has met their expectations. If they are happy, they will promote it with good word-of-mouth and tell lots of people – usually about five. However, an unhappy person will tell about ten people about their dissatisfaction. It is therefore very important to make sure that the company makes realistic claims and does not oversell the product. The company must try to ensure satisfaction (and if possible delight) and manage the relationship afterwards by providing good customer service.

Bear in mind that this is only a model and has some limitations. We are assuming that the buyer goes through every stage of the process. In some cases the buyer might skip a stage if they already know a lot about a product. In an impulse buy, the buyer might just see a product and buy. There are also situations where the buyer might get to evaluation of alternatives and then go back one stage to information search.

Decision-making Unit for B2B Markets

There are often many people involved in making a decision to buy a product in an organisation. And a group of people who make a decision together to buy a product or service is called a decision-making unit:

“A group of people who together influence a purchase decision at any stage in the process.”

There are usually six people in the decision-making unit...

Gatekeeper: Controls the flow of information into an organisation. For example, it might be a receptionist who passes on a brochure to a manager.

Influencer: Stimulates, informs or persuades the rest of the group their way. For example, this might be the manager who recommends looking at a particular printer.

Decider: Makes the decision that the product should be bought. In an organisation this is likely to be the manager or purchasing manager.

Buyer: Orders or buys the product. Again this might be the purchasing manager, purchasing clerk.

Financier: Sets the budget and authorises the funds for the purchase. Likely to be the finance manager.

User: The person or group that benefits from or uses the product. This could be a whole department who benefits from a new printer. All these people need to be communicated with as they all affect the purchasing decision. Sales reps need to communicate persuasively to the gatekeeper to obtain appointments or to pass information onto other decision makers. Companies need to make sure that the way they communicate is effective and that they have good, persuasive information and after-sales material for the purchaser or influencer to digest.

Organisational Buying Versus Consumer Buying

There are several differences between organisational and consumer buying.

For an organisation:

  • There tends to be fewer customers placing orders of much higher value than in consumer markets.
  • There is generally a greater inertia and unwillingness to change suppliers once they are established. It takes a long time to establish a relationship with a supplier and once set, most businesses less willing to change.
  • Organisational buyers are more rationally motivated than consumers. They are buying because of managerial objectives, not because of personal needs. Therefore, they are unlikely to buy on impulse and are less likely to be swayed by promotional messages.
  • Organisations usually buy a complex complete offering. They will buy PCs, training, printers and software together rather than making piecemeal purchases. They will usually buy longer warranties and other extras. Communication between supplier and company becomes very important.
  • The buying process takes longer, is usually more complex than consumer buying and has more people involved. It also tends to be more professional with purchasing by a formally trained purchasing officer.

If you'd like to learn more about buyer behaviour and how it can be applied to digital marketing, wander over and take a look at our Diploma in Digital Marketing and Postgraduate Diploma in Digital Marketing.