1.
Consumer Behaviour
Concepts and
Applications
Not a simple picture !!!

2.
1
To consider
 influences on consumer buying processes
 problem-solving: pleasure seeking (irrational) vs.
rational views of buying
 how we construe our buying/spending: perceptions,
attitudes & motivations
 pre-exchange, in the exchange itself & post exchange
 categories of influence:
 environmental and cultural
 individual and reference groups
 Insights from learning theory
 B2C and B2B organisational buying behaviours
 marketing strategy & communications design
implications

3.
22
Obviously
 Individual customers & organisational
customers buy goods & services
 They are stimulated & prompted to buy
Marketers
 are interested in their decision behaviour
 try to stimulate & influence this behaviour to
get better responses from the customer

4.
33
Marketers, actors & roles in buying
 marketing concept …"satisfy
consumer needs for profit/value"
so....
 to segment, target & construct our
marketing mix & promotions well,
we must understand consumers &
their behaviour
 we can study actual purchases
then find ways to encourage them
to consider buying & then buy !!!
 buying may involve
 many steps
 many people
 the actual purchase is but one part
of the process
Actors and roles
the same person can play
multiple roles
•consumers
•opinion formers
•marketers
•public policy actors
Who is important in the buying
decision?
What do they buy & how much ?
When do they buy & where ?
How do they buy?
What choice criteria do they use?
How do they respond to the efforts
we use?

5.
4
Buyer Behaviour Model
4
buyer’s
black
box
Needs - wants, stimuli
Product, price, place,
promotion etc
Environmental (PEST)
factors
Buyer
responses
Choices of
•product
•brand
•dealer
•timing
•price
Buy more, less,
stay loyal etc

6.
55
Information search
How we buy (a rational view)
Need recognition,
problem-awareness
Evaluate alternatives
Information search
Buy
Post-purchase
evaluation
Shape desire, want
Evaluate alternatives (against evoked set)
Window-shop – simmering interests
Buy
Post-purchase
evaluation
• functional
• emotional ?
• current vs desired situation
• relative importance
• need inhibitors
• are they aware of need ?
• can we mediate need inhibitors?
• can we stimulate awareness &
action
• internal search (memory)
• external search (personal
sources, commercial sources
• third party reports (e.g. Which)
• personal observation/testing
Evoked
set

7.
Operant (or instrumental) conditioning
 Learning based upon the consequences of
behaviour
 the chance of a specific behaviour goes  or 
thru +ve or -ve reinforcement each time the
behaviour happens
 we associate the pleasure or displeasure of the
reinforcement with the behaviour
 Consequences of responding that increase
behaviour are “reinforcers”
 Marketers want to know the “reinforcers”
6

8.
Responses are reinforced, punished,
or extinguished 1
Reinforcement is …
 a consequence that  more frequent behaviour
Positive reinforcement
 a behaviour (response)  a favourable stimulus
(commonly pleasant)  increasing the frequency
of the behaviour
Negative reinforcement
 a behaviour (response)  lessening of an aversive
stimulus (commonly unpleasant) increasing that
behaviours frequency
7

9.
Responses are reinforced, punished,
or extinguished 2
Punishment
 a consequence that causes a behaviour to occur less
often
Positive punishment ("P. by contingent stimulation")
 a behaviour (response)  an aversive stimulus 
a decrease in the behaviour.
Negative punishment ("P. by contingent withdrawal")
 a behaviour (response)  removal of a favourable
stimulus e.g. taking away a naughty child's toy, resulting
in less of that behaviour
8

10.
Responses are reinforced,
punished, or extinguished 3
Avoidance learning
 a behaviour r  ending of an aversive
stimulus e.g. we no longer contact someone &
so avoid their unpleasantness.
Extinction
 a behaviour (response) that had previously been
reinforced is no longer effective
 the lack of any consequence following a
behaviour
9

11.
1010
Roles in the decision process
after Blackwell/Miniard/Engel, 2007 Consumer Behaviour, 10th Ed, Thomson
 each role can be acted by parent, children or other
members of the buying centre.
Each actor may display
multiple roles when buying
•a toy purchase
•a house
•a washing machine
•an armoured vehicle
•a sound system
•computer software
Infants, teenagers, working
women, husbands?
Influencing Strategies
1. expert influencing
2. subtle (incl. use of
rewards
3. emotional
4. combination
Who is
 initiator
 influencer
 decider
 buyer
 user

12.
11
What is the Relative Influence of Husbands
vs. Wives in Decision Making?
How is this changing?

13.
1212
Influences on Consumer
Behaviour
Cultural
 broadest & deepest influence
 cultures & subculture
 social classes
Social
 Family
 Social roles and status (multiple)
 Reference groups
 Membership - primary vs. secondary
 Aspirational vs. dissociative
Personal
 Age
 Life cycle stage
 Occupation
 Economic circumstances
 Lifestyle
 Personality
 Self-concept
Psychological
 Motivation
 Perception
 Learning
 Beliefs
 Attitudes

14.
1313
Personal influences
Perception
 "mind" processes - selection, association,
organisation & interpretation. We
 only note some things (selective) i.e. what
grabs attention + distortion & retention
 associate & categorise information into
meaningful wholes
 interpret/make inferences
 information framing e.g.
 good news or bad news first ?
 accentuate the positives, eliminate the
negatives
Learning
 classical & operant conditioning
 cognitive learning
by rote
vicarious (from others)
reasoning
 what motivates us
 what we believe in
 real knowledge, opinion or
faith
 Our attitudes
 relatively consistent
evaluations, feelings,
tendencies towards something
 Three components
 cognitive (belief),
 affective (feeling),
 conative (behavioural)
 personality
 self-concept, lifestyle
& life cycle stages

15.
14
Perceptual, conceptual & related capacities
Perceptual - Sensing, measuring, judging
 Colour, sound, texture, smell. Interpreting smells, noises, signals
 Monitoring sounds, vibrations, data, information
 Frames of reference – what is your “vantage point”
Conceptual
 associating, abstracting, formulating, calculating, inferring
 understanding processes in the abstract
 deriving ideas & predicting from associated, comparative information
 depends on knowledge and know-how (range & level)
 dealing with symbolic information + its associations
Relating - Ego + alter-ego oriented:
 need for achievement, power, affiliation
 sensitivity & empathy, identification & association, objective-subjective,
attitudes & values
Physical
 Storage, access, processing & transmission capacity, security, privacy

16.
15
Concepts in socio-cultural
examination
Culture
 a socially constructed complex of
values, ideas, attitudes, institutions,
meanings & symbols that shape
and are shaped by behaviour &
maybe passed on thru generations
Social Class
 relatively permanent divisions in a
society into which individuals or
families may be categorized
 based on perceived status &
prestige.
Sub- or Micro-culture
 a sub-group with its own
distinguishing modes of behaviour.
Role
 Behaviours, rights, duties expected
of an individual in a group by other
members
Reference groups
 structures & standards
influence behaviour.
Membership
 groups we actually belong to
Aspirational
 We wish to associate with
this group.
Disassociative
 We do not want to be
identified with this group.
Power studies
 how roles, groups & norms
influence individual
behaviour.

17.
16
Opinion formers
 Trendsetters
 influential people in a group who
 purchase new products early
 serve as information sources for others
 The Media
 TV, newspapers, magazines, Internet communication
 commentators
 the media need "stories"
 Sellers & Marketers
 "seeding" the media. Pay media producers for product
placement in "publication channels"
 From a Fashion house to Primark
 Advertising, promotions & incentives
 Word-of-mouth - viral

18.
19
Personality & self concept
 extroversion-introversion
 self-confidence, dominance
 sociability
 autonomy
 defensiveness
 adaptability
 aggressiveness
Towards a brand personality:
“the brand & Me”
 sincerity
 down to earth, honest, wholesome,
cheerful
 excitement
 daring, spirited, imaginative, up-to-
date
 competence
 reliable, intelligent, successful
 sophistication
 higher class, charming
 ruggedness
 outdoors, tough
 e.g. Take care of pennies & £ will
take care of themselves
Levi Jeans ?
Swaferga ?
Branston baked beans?
Chicken jalfrazi ?
Top Gear ?
Yesterday Channel ?
Lands End?

19.
20
Components of Attitude
Attitude
(overall orientation
toward object or idea)
Cognitive
(knowledge & beliefs
about a subject/object)
Affective
(overall feelings or
emotive reactions)
Behavioural
(how we tend to behave)
A person’s enduring
favourable or
unfavourable evaluation
of some object or idea

20.
21
Choice criteria
 attributes & variables a
consumer uses when
evaluating products &
services
 different members of
buying centre obviously
may use different criteria
 e.g. a teenager or a WAG
(self-image), a parent (for
the baby), an OAP (price
or risk reduction)
Social
status
social
belonging
fashion
Personal
self-image
risk reduction
morals
emotion
Technical
reliability
durability
performance
style/looks
comfort
delivery
convenience
taste
Economic
price, VfM
running costs
residual
value
life cycle
costs

21.
22
Consumer Problem-Solving
Categories
 Routinised (habitual)
 repeat buys.
 Advertising may influence a change – also
promotions (2 for 1), branding to keep product in
customer’s mind
 Limited problem solving (LPS)
 buyer has some experience, may check prices
etc. Buyers can advertise to stimulate & compare
or reduce risk of brand switching
 Extended problem solving (EPS)

22.
23
Extended problem-solving
 Research all choice
alternatives + examine
solutions
alternatives are
differentiated &
numerous
high deliberation &
involvement time
personally relevant
(risks)
 high potential for
cognitive dissonance
self-image
risks
social
factors

23.
24
Cigarette advertising

24.
Cognitive dissonance
(after Festinger)
 discomfort when facing logical inconsistencies in our
thinking (cognitions) e.g. a belief in animal rights may be
seen as inconsistent with eating meat or wearing fur.
 We may feel anxiety assoc. with bad decisions: guilt,
shame, anger, embarrassment, stress or other. This can
lead to rationalisation: justifications to support our
choices or change in attitudes, beliefs & behaviours.
 When ideas are consistent … harmony or consonance.
 If cognitions are unrelated, they are "irrelevant" not
dissonant. 25

25.
Aesop's "The Fox and the Grapes"
A fox sees some tasty, grapes high on the
vine but can't think how to reach them. He
concludes that the grapes are probably not
worth eating anyway (not yet ripe, too
sour).
Nb. dissonance in the desire for something
unattainable & so the fox irrationally
decides that the "thing" must be flawed
(Sour Grapes).
26

26.
Smoking
 we know that cigarettes cause lung cancer
 we want to live a long and healthy life
 we can
 quit smoking & reduce the tension between the contradictory
ideas or
 deny conclusions about lung cancer or justify our smoking
 “Only a few smokers become ill". "It only happens to very
heavy smokers“. "If smoking does not kill me, something
else will." "I am a smart, reasonable person who makes
good decisions." Easier to make excuses than to change
behaviour. Humans are rationalizing and not always
rational.
27

27.
28
Social classes
 Upper Uppers
 Lower Uppers
 Upper Middles
 Middle Class
 Working Class
 Upper Lowers
 Lower Lowers
Chavs
• slang (UK) for a subcultural stereotype
• Aspirants who want to be in a "class"
above their actual class.
• spend on fashion for upward social
mobility.
• fixated on fashion 'designer' clothing,
handbags, gold jewelery e.g.
Burberry,
• trying to adopt lifestyle of admired,
referent class but not seen as
successful.
• considered to be in poor taste,
ignorant,
• labelled as "trying too hard, not worthy
enough".

28.
29
VALS2 psychographic groups
 Actualizers
 Fulfilleds
 Achievers
 Experiencers
 Believers
 Strivers
 Makers
 Strugglers
 How do you see
each category
behaving as
buyers?

29.
30
Forrester Technographics
customer segments by motivation, desire & ability to
invest in technology
30

30.
31
Start here
Explain the customer behaviour appeals being
used by … each of the following …
 a selected product group within e.g. Gillette
 a company within the earth-moving equipment industry e.g.
JCB, Caterpillar, Komatsu etc
 A group within the hotel sector including: Hilton, Accor,
Travelodge, Townhouse
 HMV
What common or different customer behaviour appeals are being
used by
 http://www.wickes.co.uk/
 http://www.screwfix.com
 http://www.diy.com/
 http://www.homebase.co.uk

31.
32
Explain the following in terms of consumer
behaviour debate
 fitting rooms
 return of goods policies e.g. B&Q, Next on-line
 2-for-1, 20% bigger
 interest free for
 3 months (over £300)
 3-years (DFS)
 "Never knowingly undersold" - John Lewis Partnership
 free delivery over £15 (Amazon)
 main dealer trade in values, old car-new car
 easy financing terms
 free insurance
 mobile phone automatic new model + cheaper contract + extras
 home deliveries e.g. Tesco
 £15 (21 days in advance), £26 (7 days), £55 – with on-line booking -
Travelodge
 4x Tesco Club Card points value for Cafe Rouge vouchers (£8 = £32)

32.
33
Post-purchase evaluation
 We want customer to have positive experiences
from purchase but they may experience
Cognitive Dissonance
Pre-purchase, purchase or post-purchase
 attitudes & behaviour should be consistent with one
another. If you buy a car & your friend thinks that it is
rubbish …..
 uncertainty – "Have I made the right decision?"
 feel anxiety, disappointment, remorse
 discrepancy between expectation & experience
 reflect on opportunity cost and lost - difficult
decision, many alternatives
 irrevocable decision
 neurotic customer (impulse buy)
 post-purchase remorse
What can
marketer &
seller do?

33.
34
Post-purchase Behaviour
 expectations are compared to performance
 post-purchase satisfaction influences future
behaviour
 future purchasing behaviour
 word-of-mouth communication
 Marketers try to influence post-purchase
behaviour. How ?
 Post-purchase communication to reduce dissonance,
returns & order cancellations
 Talk with customers:
 discover new uses for existing products
 etc

34.
35
Evaluate Harley-Davidson Consumer Behaviour
 Hells Angels ? Burly,
leathers, bikers, rebels
 New breed:
 older
 more affluent
 better educated
 rubbies (rich urbans)
 Showrooms + sales
approaches
 Customer types from HD
research
 adventure-loving traditionalists
 sensitive pragmatists
 stylish status seekers
 laid-back campers
 classy capitalists
 cool-headed loners
 cocky misfits
 all loved their Harleys because
 independence, freedom, power
 more than a machine – part of
self-expression
 classic look, throaty sound
 American legend

35.
36
Scope of B2B Market
 Agriculture
 Mining
 Construction
 Manufacturing
 Transport
 Wholesale & retail
 Finance, insurance,
property
 Government
 Non-profit & voluntary
organisations
 different needs & buying
patterns e.g. medical from
rubber gloves vs body scanner
 buy raw materials/inputs to
make other goods/services e.g.
sugar & flavouring as inputs for
Pepsi
 sell on to other business users
or consumers e.g. Argos
 use purchases to conduct
business e.g. stationery, legal
services, IT/systems
consultancy, marketing services

36.
37
Purchasing decisions in B2B Markets
Buying is less frequent.
new task buy
 buying decision not been
made before
modified rebuy
 bought before but this time
change spec. or new supplier
straight rebuy
 routine purchase made many
times before
One-off, a batch or steady
flow (JIT)
Long, complex negotiation
Service & consistency of
quality & supply are vital
Buying centre
 Buying often a group process.
Who is in the buying group?
Users
 use the product e.g. trucks
Influencers (direct or indirect)
 Tech know-how, budget etc
Deciders
 Make the actual decision:
purchasing officer, manager,
product/service user
Gatekeepers
 Control flow of information
Buyers
 Select suppliers & negotiate
terms

37.
38
Organisational buying
Need recognition,
problem-awareness
Evaluate, negotiate,
select
Search for sources,
research & approve
Finalise contract &
order routines
Performance feedback &
evaluation
Determine specification &
quantity
Receive proposals & analyse
Integrate partner
systems
competition
legal steps
financing
JIT
logistics
conflict
outsourcing
quantity
continuity
quality
price
financing
life cycle costs
prody
maintenance
residual values
risks
politics
personal
Choice criteria
Can we assume that B2B
buying motives are rational,
methodical & objective
Personal factors incl:
relationships, self advancement
Motivators include
Cost & profit-related benefits
Incentives & promotional support
Supply alliances for expansion &
synergy + share costs, improve
productivity etc

38.
39
Relationship Marketing
establishing & developing successful exchanges with customers.
Influences
global competition & defensive strategies. Growth in services
(direct relationships). Focus on the ‘value chain’ + the ‘value
proposition’ incl offering specific competencies
Customer relationship management (CRM)
maximise customer retention & share of customer’s business
past behaviour is important
The future involves
increased WWW use – direct marketing & personalisation
costs of servicing unprofitable customers
focus on better servicing of other customers