Customer behavior

Prof. Sławomir Smyczek, Ph.D.

Katowice, December 11, 2023

Introduction
Agenda

▪ 11.12 - Introduction to study customer

behavior
▪ 18.12 - Customer decision-making
process
▪ 22.12 - Determinant of customer behavior
▪ 08.01 - Customer behavior research
▪ 12.01 - Projects’ presentations and
reports’ evaluations
Agenda

▪ 15.01 - Projects’ presentations and

reports’ evaluations
▪ 22.01 – Customer behavior application to
practice

▪ 01.02 – Exam
Literature
▪ Solomon M.R. (2020) Consumer Behavior.
Buying, Having and Being, Pearson Education,
Inc.
▪ Arnould E.J., Price L.L., Zinkhan G.M., (2014)
Consumers, New York: McGraw-Hill/Irwin
▪ Schiffman L.G., Kanuk L.L., (2014) Consumer
behavior, Upper Saddle River: Pearson Prentice
Hall
▪ Belk R.W., Scott L., Askegaard S., (2012) Research
in Consumer Behavior, Emerland, Inc.
▪ Smyczek, S. (2012) Consumer behavior –
international perspective. Warszawa: Placet
Assessment

Course Grading: 100 points

▪ Written test: 60 points
▪ Report on case study: 30 points
▪ Presentation: 10 points

▪ Total – 100 points (60% to pass)

Assessment

Grading

▪ 93-100 A (5.0)
▪ 85-92 B (4.5)
▪ 77-84 C (4.0)
▪ 69-76 D (3.5)
▪ 61-68 E (3.0)
▪ 0-60 F, Fx (2.0)
 Case study

Consumer behavior analysis (based on

secondary data)

Step 1
▪ Select market (e.g. banking services,
cosmetics, etc.)
Step 2
▪ Select country (e.g. France, India, Brazil,
etc.)
Case study

Step 3
▪ Prepare report about consumer behavior on
selected market (e.g. level of consumption,
expenditures for product, what, where, how
often consumers buy and consume this
product, what brands they prefer, loyalty
level, etc.)
Step 4
▪ Prepare presentation
Case study

Structure of report
▪ Cover page
▪ Introduction with justification of topic and goal
▪ Characteristics of customers on selected market
▪ Characteristics of customer behavior on selected
market
▪ Recommendation for company
▪ References
Presentations
▪ 5 persons groups
▪ 10 minutes for presentation
▪ 20 second for 1 slide
▪ Totally 30 slides
▪ Selection of information and way of
presenting topics on slide
▪ 3 minutes for Q&A
▪ Total 15 minutes
Deadlines
▪ Submission of report: Jan 11, 2024
▪ Submission of presentation: Jan 11, 2024

▪ Exam: Feb 1, 2024

▪ Grades: Feb 9, 2024

Lecture 1: Introduction to
study Customer behavior
Customer and consumption

▪ Consumer must consume in order to exist

▪ Consumer must consume in order to live
▪ Consumer must consume in order to
develop
▪ Consumer must consume in order to enjoy
life …
Consumption as act
▪ Direct act of satisfying certain need of
consumer through use (usage or using
up) of good or service
▪ There are two types of consumption acts:
▪ act of single using product (until it has no
remaining value) - the act of using up
something
▪ act of multiple usage of a (durable) good
Consumption as act

▪ Sphere of production and sphere of

consumption were unified
▪ Consumption was side effect of production
Consumption as sphere of
social reproduction
▪ In XIX century – industrial revolution
started
▪ Industrial era split production and
consumption
▪ Domination of production phenomenon
▪ Industrial era based on rationality and
technological improvement
▪ Consumption was secondary phenomenon
Consumption as process

▪ After WWII – domination of consumption

phenomenon
▪ Well-developed countries create civilization
of consumption
Consumption as process

▪ The whole of actions and behaviors of

consumer leading directly or indirectly
to satisfying needs
▪ It consists of some stages:
▪ arousal of need
▪ information search and evaluation of alternatives
▪ choice (decision)
▪ satisfying the need
Consumption as process

▪ Process of consumption has three main

features:
▪ continuous – there is no break in feeling the
needs so there is no break in the process of
satisfying them
▪ universal – it’s common and characteristic for
each consumer
▪ repeated – even if we satisfy a need after
some time we can feel it again (over and over)
Who is customer?
Consumer or customer

▪ Consumer refers to end user of good or

service => they may or may not be
customer
▪ Customer refers to purchaser of good or
service => they may or may not be
consumer

Client
Role of customer?

▪ Buyer - person who make actual

purchase
▪ User - person who consumers or uses
goods or services
▪ Decider - person who decides on any
component of buying decision: whether to
buy, what to buy, how to buy, or where to
buy
Role of consumer?

▪ Gatekeeper - person who controlling

what information comes to consumer
▪ Initiator - person who first suggests idea
of buying goods or services
▪ Influencer - person whose view or advice
influences decisions
▪ Financier - person who determine and
control budget
Consumer roles
▪ Individual decisions
▪ dominated by women
▪ dominated by men

▪ Joint decisions
Customer behaviour

▪ field of study, focusing on consumer

activities
▪ study of decision-making unit and
processes involved in acquiring, consuming,
and disposing of goods, services,
experience, and ideas
▪ activities people undertake when obtaining,
consuming and disposing of products and
services
Customer behaviour

▪ refers to the behaviour that consumers

display in searching for, purchasing, using,
evaluating, and disposing of products and
services that they expect will satisfy their
needs
Identifying customer
behavior
▪ The study of customer behaviour is the
study of how individuals make
decisions to spend they available
resources (time, money, effort) on
consumption-related items:
▪ what they buy
▪ why they buy
▪ when they buy
▪ where they buy
▪ how often they buy
▪ how often they use
Where are customer
behaviour taking place?

▪ on market - market behaviour, buying

behaviour (include searching and winning
goods and services)
▪ in household - behaviours inside
household connected with using products
Elements of customer
decisions

▪ Three main elements of consumer

decisions:
▪ motivation
▪ capacity
▪ opportunity
▪ Main determinates
▪ Creating frameworks for behaviour
Economic model of
customer behavior
▪ makes rational decisions:
▪ consumer aware of all available product
alternatives
▪ would have to be capable of correctly
ranking each alternative in term of its
benefits and disadvantages
▪ would have to be able to identify one
best alternative
Economic model of
customer behavior
▪ Model is unrealistic:
▪ people are limited by their existing
skills, habits, and reflexes
▪ people are limited by their existing
values and goals
▪ people are limited by extent of their
knowledge
Passive model of customer
behavior
▪ makes impulsive and irrational purchases
▪ was subscribed to by hard-driving super-
salesmen, who were trained to regard
consumer as object to be manipulated
▪ model AIDA (attention, interest, desire,
action)
Cognitive model of
customer behavior
▪ consumer actively seeking products that
fulfil their needs and enrich their lives
▪ consumer seeks and evaluates information
about selected brands and retail outlets
▪ information-processing system (sufficient
information is acceptable)
Emotional model of
customer behavior
▪ Consumer is likely to associate deep
feelings or emotions - joy, fear, love,
hope, sexuality, fantasy, when it comes to
certain purchases or possessions less
emphasis is placed on search for pre-
purchase information
Customer decisions

Decision is the selection of an action from

two or more alternative choices

Choice of alternatives must be available for

a person to make decision:
▪ choice between making a purchase and
not making a purchase, or
▪ choice between brand A and brand B
Decision making-process

▪ Stages of decision process:

▪ needs recognition
▪ purchase search
▪ alternative evaluation
▪ purchase
▪ post-purchase evaluation
▪ consumption
▪ post-consumption evaluation
Decision making-process

▪ Stages of decision process:

▪ needs recognition
▪ purchase search
▪ alternative evaluation
▪ purchase
▪ post-purchase evaluation
▪ consumption
▪ post-consumption evaluation
Need - notion and scopes
Need is:
▪ lack of something
▪ desire of products as result of shortage
of something necessary for human life
▪ desire of goods and services (utilitarian
values) as result of achieved economic
and culture standard
▪ perception of a difference between the
desired state of affairs and the actual
situation
3 groups of needs

▪ producing needs economic character (goods and

services are needed to satisfy)

▪ consumption needs

▪ other needs - non-economic character

3 groups of needs
▪ producing needs - supply of goods and
services for production (not directly
connected with consumption)
▪ consumption needs - not directly
connected with production, customers are
subject of those needs
▪ other needs - goods and services are not
necessary to satisfy those needs, some
attitudes and behaviours are very
important
Need – mechanism
existing (objectively) or noticeable
(subjectively) situation connected with
shortage of something (or excess of
something)

discomfort of man

motivation to action

fill up with shortage

Needs arousal
▪ objective needs - man is non-aware of
those needs (e.g. low level of blood
sugar)
▪ subjective needs (e.g. need to go to
cinema)

▪ Conclusion!
▪ need is existing without awareness
▪ but only perceived needs can influence
on our behaviours
Needs arousal

▪ we are aware of our needs only when they

are aroused
▪ they can be aroused by four distinct
stimuli:
▪ physiological
▪ cognitive
▪ environmental
▪ emotional
 Stimuli of needs arousal

Stimuli type Example of mechanisms Needs aroused

Physiological Drop in blood sugar levels Hunger
Testosterone release in men Sex
Cogitative Seeing an advert which reminds you to Social
phone a friend
Emotional Fear of being burgled Security
Chaotic life Stability
Environmental Finding a dream home that you can Success
afford
Sources of needs
I)
▪ body (physiologic)
▪ intellect (emotion)
▪ environment
II)
▪ physical requirements of human body
▪ natural (biologic)
▪ human personality
▪ environment
Sources of needs
III)
▪ physiologic - bodily needs at any one specific
moment in time are rooted in an individual’s
physiological condition at that moment
▪ emotion - thinking or daydreaming results in the
arousal or stimulation of latent needs
▪ cognitive - random thoughts or personal
achievement can lead to a cognitive awareness of
needs
▪ environment - set of needs activated at particular
time are often determined by specific cues in
environment
Features of needs

▪ needs are constantly changing

▪ amount of needs is non-limited (in time
and in space)
▪ scope and capacity of some needs is
limited (especially physiological needs)
▪ needs are never fully satisfied
▪ new needs emerge as old needs are
satisfied
▪ needs appear with different intensity
Features of needs

▪ complementary of needs (at the same

importance level)
▪ needs are competitive
Types of needs

▪ according to sources of needs - I

▪ biologic
▪ psychological
▪ sociologic
▪ according to sources of needs - II
▪ innate
▪ acquired
Types of needs

▪ according to sources of needs - III

▪ real need - objective lack of something
▪ “surrounding” needs - psychological,
sociological, economic, cultural
elements influencing and transforming
real needs; “surrounding” elements are
dominated
▪ seeming need - mania or addiction
Types of needs
▪ according to character
▪ primary - these are needs that sustain
life; they are not connected with
particularly goods or services (they
include need for food, air, sex and self-
preservation)
▪ secondary - these are needs which arise
as result of our socialisation;
particularly goods and services are
desired
Types of needs

▪ according to subject of needs

▪ individual - needs of individuals
▪ collective - needs of family, local society,
nations
▪ according to object of needs
▪ needs connected with food, apartment,
rest and fun, travel etc.)
▪ according to needs of urgency
Hierarchy of consumption needs

▪ hierarchy - rank in order of importance

from lower-level (biogenic) needs to
higher-level (psychogenic)needs

▪ needs of urgency - importance of needs,

depends on intensity of need’s feeling

▪ hierarchy depends on:

▪ actual level of consumption
▪ desired level of consumption
Hierarchy of consumption
needs

actual desired
level difference level
consumption consumption

hierarchy position
of need
Hierarchy of needs

lower-level higher-level
needs needs

necessary not necessary

to satisfy to satisfy
non-satisfy is harmfully reschedule of satisfying
Lower-level (basic) needs

▪ the most fundamental needs

▪ result of human physiology
▪ necessary to physical and social life

Elements of lower-level needs:

▪ physiology and nature basis (e.g. need
of food, rest, cloth etc.)
▪ culture basis (e.g. need of education,
information, entertainment etc.)
Feature of lower-level
needs
▪ complementary
▪ most of them are innate (especially
biologic basis needs)
▪ means satisfying lower-level needs are
substitute
▪ hard to modify, less susceptible to
external determinates and information
▪ low income and demand elasticity of price
of goods and services satisfying these
needs
Higher-level needs
▪ not necessary to satisfy
▪ non-satisfy needs don’t evoke negative effects
(connected with human life, health and social
activity)

Feature of higher needs:

▪ acquired
▪ easy to modify by external determinants,
information, promotion etc.
▪ complementary as well as substitute
▪ condition of satisfying: low-level needs partly
satisfied, free founds and time
Maslow hierarchy of needs

Self-actualisation
Esteem needs
(prestige, status, self-respect)
Social needs
(affections, friendship, belonging)
Safety and security needs
(protection, order, stability)
Physiological needs
(food, water, air, shelter, sex)
Thank you for your attention

Sławomir Smyczek
slawomir.smyczek@uekat.pl
meet.google.com/ypq-sjmu-qiu