24 Consumer behaviour and values

To study about the behaviour of the consumers, it is essential to understand first, who is a consumer?

  • How does the consumer behaves during his purchase decision making process?
  • And the values of consumers.

CONSUMER BEHAVIOUR

 

Consumer: According to Philip Kotler and Gary Armstrong, consumers are” all the individuals and households who buy or acquire goods and services for personal consumption”.

A consumer is an ultimate buyer. The attitude of the consumer decides how existing goods and services will be sold. Many economic, social, cultural and climatic factors determine the attitude of consumers. Buying decisions are also influenced by education, life style, size of family etc., of the consumer. So it is essential to study how and why a particular consumer behaves the way he/she does.

 

First let us discuss the categories of buyer.

 

There are two categories of buyer:

 

Individual buyer:

 

The individual buyer buys things for his own personal and family consumption.

 

Business buyer:

 

The business buyer is a commercial buyer who buys things for manufacturing other products or for reselling or for use in the running his enterprise.

 

Ok, now we have understood, who is a consumer, the next we are going to discuss is about the behaviour of buyer.

 

What is Buyer Behavior?

Almost all the products, which are available to buyers, have a number of alternative supplies; i.e., substitute products are available to consumers, who make a decision to buy products. Therefore, a seller, most of his time, seeks buyers and tries to please them. In order to be successful, the marketer should be able to identify correct answers for the following questions, which helps him to study the behavior of consumers.

 

  • Who is the customer?
  • What do consumers buy?
  • When do consumers buy?
  • How do consumers buy?
  • From where do consumers buy?
  • Why do consumers buy?

Definitions of consumer behavior:

 

According to Kotler and Armstrong, “Consumer buying behavioru refers to the buying behavior of final consumers – individuals and households who buy goods and services for personal consumption.”

 

According to Schiffman and Kanuk, “ Consumer behavior maybe defined as the behaviour that consumers display in searching for purchasing, suing, evaluating and disposing of products, services and ideas which they expect will satisfy their need”.

 

Thus, the study of consumer behaviour is the study of how individuals make decisions to spend their available resources- money, time and effort- on consumption related items. For the marketer, the person is important, who makes the buying decision, not the one who actually makes the purchase or uses the product

 

Importance of Studying Consumer Behaviour

The field of consumer behavior studies deal with how individuals, groups and organizations select, buy, use and dispose the products and services to satisfy their needs and desires. Thus, according to Webster, “Buyer behavior is all psychological, social and physical behavior of potential customers as they become aware of, evaluate, purchase, consume and tell other people about products and services”.

 

As a matter of fact, customer is the pivot around which the whole industrial of nowadays revolves. The economists call the ‘customer’ a “king”. He is just like a voter in democracy. His selection of goods or services determines the fate of products/services. Therefore, in order to attract him more and more, the markets should know their customers well so that they could treat them in the way they like to be treated, present the goods in the way, they will appreciate and close a sale in such a way that consumer satisfaction is created.

 

The study of consumer behavior is very useful in determining the form, style, packaging, brand, trademark etc. of the product. The whole aspect of buying behavior determines the durability, price policy and utility aspect in goods.

 

The consumer or buyer behavior is extremely important for an effective marketing planning. The success or failure of marketing depends largely on target consumer’s individual and group reaction that manifest in the buying patterns. The buyer behavior is concerned with the study of factors that influence a person to buy or not to buy. Its concept lies in understanding the consumer and his motives and therefore, involves seeking answers to pertinent questions like:

 

Why a buyer buys or does not buy a particular brand or product?

 

Does a buyer devote much time and study to comprehend the benefits of a product and its services?

 

Does a buyer buy due emotion or impulse?

 

Does a buyer imitate other?

 

What factors does a buyer take into consideration in the buying decision?

 

Types of Buyers:

The issue of the buyer’s style and its implications for marketing strategy has been the subject of research in the United States by Dickinson, who identified seven types of buyers:

  1. Loyal buyers who remain loyal to a source for considerable periods;
  2.  Opportunistic buyers who choose between sellers on the basis of who will best further has long-term interests;
  3. Best deal buyers who concentrate on the best deal available at the time;
  4. Creative buyers who tell the seller precisely what they want in terms of the product, service and price;
  5. Advertising buyers who demand advertising support as part of the deal;
  6. Chisellers who constantly demand extra discounts;
  7. Nuts and bolts buyers who select products on the basis of the quality of their construction,

Also Marketers should approach the study of a new market by asking the following question that may be called Six O’s of any market.”

1. What does the market buy? -Object of Purchase.
2. Why does it buy? -Objectives of Purchase.
3. Who buys? -Organization of Purchasing.
4. How does it buy? -Operations of Purchasing organization.
5. When does it buy? -Occasion for Purchase.
6. Where does it buy? -Outlets for Purchase.”

 

 

Determinants of Consumer Buying

A market is always interested to know how consumers respond to various marketing stimuli-product, price, place and promotion and other stimuli i.e., buyer’s environment-economic, technologies political and cultural. The marketer studies the relationship between marketing stimuli and consumer response. These stimuli pass through buyer’s box which produces the buyers’ responses and its shows below:

The buyer is considered as a black box, because his mind cannot be imagined, as to his buying decision. The buying decision depends on his attitude, preferences, feeling etc.

Factors influencing buyer behaviour:

Factors influencing the consumer behavior are internal-needs, motives, perception and attitude as well as external-family, social groups culture, economics, business influences etc. These influences are shown below:

The study of the buyer behavior is essential to understand what Marketing is. The success or failure in marketing depends upon the individual’s reactions, expressed in the form of buying pattern. Mainly, the buyer has many approaches: the economic the psychological, the socio cultural etc. A buyer is subjected to may influences before the actual purchase.

 

Consumer Buying Decision

A very important area for marketing firms is to determine the decision maker or the real customer in the purchase decision of products and services. For purchasing a car, scooter etc., man take the decisions whereas for buying baby products, kitchenware’s, house-furnishing etc., purchasing decisions are taken by women For buying a house or going for vacations, decisions are taken by majority members in the family. The firm must find out the characteristics of such persons who play significant role in influencing the decision to make a purchase:

 

The following are the different participants in any consumer buying decision:

 

  1. Initiator: Initiator is the person who first suggests the needs of the idea or the need for a particular product which should be bought for satisfying certain requirements.
  2. Influencer: After the initiator has suggested the idea for a particular product, the influencer is the person who gives more information or gathers more information which will influence the decision of the purchase.
  3. Decider: A decider is the person who ultimately decides to buy a particular product depending upon the situation. He is generally the dominating member of the family or head of the family who carries out the role.
  4. Buyer: The decision has been made for certain goods, the buyer goes to purchase from the shop. The actual purchase made by the buyer will depend on the convenience of the family members or of the group and it may depend on the earning members or head of the family.
  5. User: The user is generally one who actually consumes or uses the product or service and he may or may not be the initiator, decider or buyer for instance, parents purchase toys be the actual users are children.

Characteristics of Buyer Behaviour

 

  • Buyer behavior is very complex.
  • Buyer behavior is the process by which individuals decide whether, what, when, from whom, where and how much to buy.
  • Buyer behavior is very dynamic.
  • Consumer behavior comprises both mental and physical activities of a consumer.
  • It is an integral part of human behavior.
  • In many cases, it is the sum total of the behavior of a number of persons.
  • It is influenced by a number of marketing stimuli offered by the marketer.
  • Consumer behavior is basically social in nature.
  • Consumers act differently at different times.

 

They learn and thereby change their attitude and behavior

Important buying motives

 

1.   Problem or need Recognition:

 

Problem or need recognition is the first step in the buying decision process. The marketer has to identify the need at the right time. This enables him to develop marketing strategies that trigger the consumer interest.

 

2.    Information search:

 

After recognizing the problem, the consumer will try to search for more information. The sources of information are:

 

  • Personal sources: Family, friends, neighbours, etc.,
  • Commercial sources: Advertisements, salesmen, dealers, packages etc,
  • Public sources: Mass media
  • Experimental source: Examining, using and handling the product.

From the above information search, the consumers learn more about the available product and their features.

 

3.   Evaluation of Alternatives:

 

Buyers evaluate the various alternatives available in the market on the basis of certain product attributes. The attribute vary according to the product. For example, in case of tyres, the attributes normally required are safety, life, quality and price. The marketer must try to find out which attributes the consumer gives importance.

 

4.   Purchase Decision:

 

After evaluating the various alternatives, the next step is taking decision as to buy or not. If he has decided to buy, then he has to take decision regarding

 

  • Which brand to be purchased?
  • How much to be purchased?
  • From whom it should be purchased?
  •  When to be purchased? And How to make payment? and so on

      5.  Post Purchase Behaviour:

 

The consumers after purchase, if he is satisfied, will make repeat purchase and also says good things about the product to others. Marketers say, “Our best advertisement is a satisfied customer.” But a dissatisfied consumer will not stop repeat purchase but also stops others in buying the product.

 

CUSTOMER VALUE:

 

Why focus customer value?

 

The following words by our Father of nation Mahatma Gandhiji will give us clear understanding on customer value, “ A customer is the most important visitor on our premises. He is not dependent on us, we are dependent on him.He is not an interruption in our work. He is the purpose of it. He is not the outsider in our business. He is a part of it. We are not doing him a favor by servicing him He is doing us a favor by giving us an opportunity to do so.

 

According to Kotler,, the components of total customer value include: Product value, personal value and image value.

 

The customer to get value out of the purchased item. Obviously, in certain cases the value is created through the image, where as in some instances the value is created through product features, and in certain instances, customer value is a combination of both; in certain instances personnel creates the value, like services of a doctor. Therefore, marketers make every effort to ensure that suitable value is being offered to customers. To ensure value, the steps taken by the marketers include:

  • Customer intimacy
  • Interpreting needs
  • Co-creating value
  • Suitable branding
  • Training and empowering personnel
  • Research techniques
  • Value based pricing

 

1.Customer intimacy:

 

Regular customer contact and intimacy with customers enable marketers to understand customer needs better and what the customer seeks from the product.

 

2.Interpreting needs:

 

Customer needs may not be readily apparent and hence the marketer have to interpret the customer’s needs and produce products to satisfy them.

 

3. Co-creating value:

 

Dell computers became a market leader by engaging the customer in co-creating value, Most manufacturers were offering standard PC s to customers but Dell enabled the customer to custom-create a PC based on the usage requirements of the individual customer. Therefore, when customer could get what is actually useful to them, they feel satisfied by the offered value.

 

4. Suitable branding:

 

The value that is offered to customers’ needs to be communicated through suitable branding efforts. It is necessary to ensure that branding does not create exaggerated expectations for customers while ensuring the adequate value is prepositioned.

 

5. Training and empowering personnel:

 

Value is created through the actions performed by the personnel. This is especially true for service based offerings. For example, the manner in which the air hostess takes care of the passengers in a flight creates a value.

 

6. Research techniques:

 

Customer surveys are undertaken and the findings analysed to find out which needs of customers are not being fulfilled and the gaps in value delivery.

 

7.Value based pricing:

 

Value based pricing is based on how much the product or service is worth to the customers.

 

ENHANCING CUSTOMER VALUE:

Companies need to keep adding value to enhance the attractiveness of the product from the point of view of the customers. In this respect, companies can gain competitive advantage and leapfrog ahead of the competition through significant value additions. Various methods used by the companies are:

 

  • Innovative features
  • Complete solutions
  • Value at lesser cost
  • Removing pain points
  • Use of new technology Innovative features:

 

Innovations offer added benefits to the customers, then they would treat these as additional value.

 

Complete solutions:

By providing customers with total solutions instead of a part of solution, the value is enhanced. Like, a number of stores advertise ‘everything under one roof’ stressing the point that they provide complete solutions.

 

Value at lesser cost:

 

If a product is available at a price less than the worth of the product, customers would consider that as enhanced value.

 

Removing pain points:

 

It is that, removing the pain points of the customers by offering enhanced services, like, bank offering ATM, internet banking, mobile banking etc., Use of new technology:

 

By adopting new technology, the value can be enhanced. For example, Apple created ipod which offered enhanced value to music players and customers have responded very positively to this product.