Consumer Behaviour

What are we looking at today?

Learning Objectives

• Articulate the steps in the buying process

• Describe the differences between functional and
psychological needs

• Describe factors that influence information search

• List the factors that affect the consumer decision process

• Describe how involvement influences the consumer

decision process
We are not rational

Irrational and complex

Imperfect information

To understand consumer behaviour, we need to

understand why people buy
The consumer decision process

Need recognition – three triggers

Actual state – “I’m hungry and don’t want to be listening

to this lecture….it’s like sooooo boring”

Desired state – “I want to get outta here and eat”

Marketing –
The consumer decision process

Need recognition

Functional needs

Mitigates thirst, hydrates

Psychological needs

I can out perform others

I am considered attractive
I connect with higher social class
The consumer decision process

Same need, why do we buy differently?

Depends on what you value?

Some value low price, quenches my thirst

Others value, imported, glass packaging, source

The consumer decision process

Information search – consumers seek solutions to satisfy their

needs

Internal – memory, past use

External – outside personal knowledge

It is during information search marketers have the best chance of capturing a

consumer
The consumer decision process

Factors affecting information search

The consumer decision process

Factors affecting information search

• Price of the product/service

• Complexity of the product/service
• Recipient of product
• How observable is the product/service
The consumer decision process

Factors affecting information search

Locus of control

Internal locus of control

…believe they have some control over outcomes, therefore do
a lot more searching.

External locus of control

…believe other external factors contribute to the outcomes,
They’ll do a little searching, but ultimately feel fate will rule. A
bad outcome wasn’t their fault, a good outcome was the
result of an external force.
The consumer decision process

Factors affecting information search

Risk

The higher the perceived risk, the longer the search

Performance risk – it won’t work

Financial risk – I’m going to lose my money, servicing costs, insurance

Social risk – “What will my friends think?”

Time risk – Loss of time and inconvenience searching

Physical risk – safety risk, the product/service will cause harm

The consumer decision process

Evaluative alternatives

Ok, you’ve done your ‘search’ and have some choices to make.
Take 60 seconds to list brands of water bottles.
Sets;

Universal set – every possible alternative – which no one would ever know
The consumer decision process

Evaluative alternatives

Ok, you’ve done your ‘search’ and have some choices to make.

Sets;

Retrieval set – easily recalled from memory

The consumer decision process

Evaluative alternatives

Ok, you’ve done your ‘search’ and have some choices to make.

Sets;

Evoked set – brands (or stores) a consumer will consider

The consumer decision process

How will you evaluate alternatives

Evaluative criteria – a set of salient (important) attributes

Price – how much?

Brand – well known?
Performance – high?
Provenance – where is it made?
Discount – how big are the savings?

Determinant attributes – a set of features (attributes) that are the

most important to a consumer

*Hence, why we market research to understand what is the most

important attributes
The consumer decision process

Consumer decision rules

What happens in our head when we are choosing;

• Compensatory
• Non-compensatory

Compensatory – consider multiple attributes and assigns weights –

good compensates for bad. i.e. We pay more for a better taste.

*Valuable information for marketers.

The consumer decision process

Consumer decision rules

What happens in our head when we are choosing;

• Compensatory
• Non-compensatory
The consumer decision process

Consumer decision rules

What happens in our head when we are choosing;

• Compensatory
• Non-compensatory
The consumer decision process

Consumer decision rules

What happens in our head when we are choosing;

• Compensatory
• Non-compensatory

Non-compensatory – Consumers select based on one important

attribute – price… or calories… or milk that tastes like real milk
The consumer decision process

Purchase and consumption

Despite great marketing and consumers evaluating

attributes, some still won’t buy.
The consumer decision process

Post-purchase behaviour
The consumer decision process

Post-purchase behaviour

Customer satisfaction – Don’t set the bar high!

Marketers;

• Be realistic
• Demonstrate correct use
• Warranties/guarantees
• Encourage feedback
• Follow up
 The consumer decision process

Post-purchase behaviour

Post purchase cognitive dissonance – Psychological discomfort

https://www.boredpanda.com/funny-online-shopping-fails/?utm_source=google&utm_medium=organic&utm_campaign=organic
The consumer decision process

Post-purchase behaviour

Loyalty – behavioral versus altitudinal

The consumer decision process

So, now that we know the ‘process’ … what factors

affect the consumer decision making process?
Factors affecting the consumer
decision process
Marketing mix (4 P’s) factors
Factors affecting the consumer
decision process
Psychological factors - Motives
Factors affecting the consumer
decision process
Psychological factors – Motives

Ideally, marketers want products and services to tap into

multiple motives
Factors affecting the consumer
decision process
Psychological factors – Attitudes

Enduring and learned feelings towards something… but

changeable.

What is your attitude to wearing seat belts?

Factors affecting the consumer
decision process
Psychological factors – Perceptions

Perception is the process by which we select, organise and

interpret information to form a meaningful picture of reality

Heterogeneous – we are all different

Perceived risk?

https://www.skydivetecumseh.com/2017/03/16/how-common-are-skydiving-injuries/
Factors affecting the consumer
decision process
Psychological factors – Learning

Refers to a change in attitude, behaviour and decision

making based on experiences.

Learning affects attitudes and perceptions.

8 fatalities in 1,000,000 jumps 14 fatalities in 1,000,000 swims

https://www.royallifesaving.com.au/__data/assets/pdf_file/0005/16448/RLSNSW_ChildDrowningReportLR.pdf
Factors affecting the consumer
decision process
Psychological factors – Lifestyle

Refers to how consumers live, spend money and consume

Factors affecting the consumer
decision process
Social Factors – Family
Factors affecting the consumer
decision process
Social Factors – Reference Groups
Factors affecting the consumer
decision process
Social Factors – Culture

http://www.ethnicitymatters.com/why-multicultural-marketing/
Factors affecting the consumer
decision process
Situational factors – Purchase situation

Purchasing for myself Purchasing for partner Purchasing Christmas presents

Factors affecting the consumer
decision process
Situational factors – Shopping situation

Store atmosphere

Service and sales people

Crowding

In-store demonstrations – retail theatre

Promotions
Involvement and the consumer
decision process
Involvement

The consumers degree of interest can differ even for the

same product.

High – greater attention, deeper processing, more critical

Low – less attention, peripheral processing, less critical

As we wrap up…

Learning Objectives

• Can you articulate the steps in the buying process

• What are the differences between functional and psychological
needs
• Can you describe factors that influence information search
• Are you able to discuss post purchase outcomes
• Can you list the factors that affect the consumer decision process
• Can you describe how involvement influences the consumer
decision process

Next week… Digital and Social Marketing