Lecture-6: Consumer Buyer Behavior and Business Buyer Behavior

Part-1: Factors that influence Consumer Buyer Behavior

Consumer buyer behaviour is the buying behaviour of final consumers: individuals and
households that buy goods and services for personal consumption. All these consumers add up to
the consumer market: all the households and individuals that buy or acquire goods and services
for personal consumption.

Figure 1: Characteristics influencing Consumer Buyer Behavior

Cultural factors
Cultural factors have an influence on consumer behaviour. Culture is the set of basic values,
perceptions, wants and behaviours learned by a member of society from family and other
important institutions. For example, a child in USA is normally exposed to the following values:
achievement and success, freedom, individualism, hard work, activity and involvement,
efficiency and practicality, material comfort, youthfulness, and fitness and health.
A subculture is a group of people with shared value systems based on common life experiences
and situations. They are distinct, but not necessarily mutually exclusive. Subculture may from
based on nationalities, religions, racial groups, and geographic regions.
Social classes are relatively permanent and ordered divisions in a society whose members share
similar values, interests and behaviours. There are seven different social classes: upper upper
class, lower upper class, upper middle class, middle class, working class, upper lower class, and
lower lower class.
Each person is influenced by these factors when they take decisions regarding purchasing or
consuming some items.
Social factors
Another influence is social factors. Groups are two or more people who interact to accomplish
individual or mutual goals. Many small groups influence a person’s behaviour. Membership
groups are groups in which a person belongs, while reference groups serve as direct points of
comparison. The group to which they belong or the groups they follow influences their
consumption behavior.
Word-of-mouth influence of friends and other consumers can have a strong influence on buying
behaviour. An opinion leader is a person within a reference group who, because of skills,
knowledge, personality or other characteristics, exerts social influence on others. Marketers try
to identify the opinion leader and aim their marketing efforts towards this person.
Buzz marketing involves creating opinion leaders to serve as brand ambassadors. Online social
networks are online communities, such as blogs, social networking sites or even virtual worlds,
where people socialize or exchange information and opinions.
The family can have a strong influence on buying behaviour as well. Buying role patterns in
families change with evolving consumer lifestyles. A person belongs to many groups beside the
family, also clubs, organization and online communities. The position of a person in a group is
defined in terms of role and status. A role consists of the expected actions of a person. People
usually choose products appropriate to their role and status. For example, you are a student. This
is your status. A student is expected to study regularly- this is the role.

Personal factors
Personal characteristics also have an influence on consumer buyer behaviour. These
characteristics can be the person’s age and life-cycle stage, the person’s occupation and
economic situation, but also lifestyle and personality.
A person’s occupation affects the goods and services bought. Blue-collar workers tend to buy
more rugged work clothes, whereas executives buy more business suits. Marketers try to identify
the occupational group that have an above average interest in their product categories and
services.
Age and lifecycle stage may influence consumer behavior. People change the goods and services
they buy over their lifetimes. Tastes in food, clothes, furniture, and recreation are often age
related. Buying is also shaped by the stage of the family life cycle—the stages through which
families might pass as they mature over time. Life stage changes usually result from
demographics and life-changing events—marriage, having children, purchasing a home, divorce,
children going to college, changes in personal income, moving out of the house, and retirement.
Marketers often define their target markets in terms of life-cycle stage and develop appropriate
products and marketing plans for each stage.
A person’s economic situation will affect his or her store and product choices. Marketers watch
trends in personal income, savings, and interest rates. F
Lifestyle is a person’s pattern of living as expressed in his or her psychographics. It involves
measuring consumers’ major AIO dimensions—activities (work, hobbies, shopping, sports,
social events), interests (food, fashion, family, recreation), and opinions (about themselves,
social issues, business, products). When used carefully, the lifestyle concept can help marketers
understand changing consumer values and how they affect buying behavior. Consumers don’t
just buy products; they buy the values and lifestyles those products represent.
Each person’s distinct personality influences his or her buying behavior. Personality refers to the
unique psychological characteristics that distinguish a person or group. Personality is usually
described in terms of traits such as self-confidence, dominance, sociability, autonomy,
defensiveness, adaptability, and aggressiveness. Personality can be useful in analyzing consumer
behavior for certain product or brand choices. The idea is that brands also have personalities, and
consumers are likely to choose brands with personalities that match their own.
A brand personality is the specific mix of human traits that may be attributed to a particular
brand. One researcher identified five brand personality traits: sincerity (down-to-earth, honest,
wholesome, and cheerful); excitement (daring, spirited, imaginative, and up-to-date);
competence (reliable, intelligent, and successful); sophistication (upper class and charming); and
ruggedness (outdoorsy and tough).30 Most well-known brands are strongly associated with one
particular trait: Jeep with “ruggedness,” Apple with “excitement,” CNN with “competence,” and
Dove with “sincerity.”

Psychological factors
Buying behaviour is influenced by four major psychological factors: motivation, perception,
learning and beliefs and attitudes.
Motive (drive) is a need that is sufficiently pressing to direct the person to seek satisfaction of
the need. Motivation research refers to qualitative research designed to find consumer’s hidden
motivations. Maslow’s hierarchy of needs categorizes needs into a pyramid, consisting of
psychological needs, safety needs, social needs, esteem needs and self-actualization needs.
Perception is the process by which people select, organize and interpret information to form a
meaningful picture of the world. People form different perceptions of the same stimulus because
of three perceptual processes: selective attention, selective distortion and selective retention.
Learning describes changes in an individual’s behaviour arising from experience. A drive is a
strong stimulus that calls for action. Cues are minor stimuli that determine how a person
responds.
A belief is a descriptive thought that a person holds about something. An attitude is a person’s
consistently favourable or unfavourable evaluations, feelings and tendencies toward an object or
idea. Attitudes can be difficult to change, because they are usually part of bigger pattern. Both
beliefs and attitudes influence consumer behavior.

Part-2: Types of Buying Decision Behavior

There are four different types of buying decision behaviour. The following figure shows them:

Figure 2: Types of buying decision behaviour.

Complex buying behaviour
Consumers undertake complex buying behavior when they are highly involved in a purchase and
perceive significant differences among brands. Consumers may be highly involved when the
product is expensive, risky, purchased infrequently, and highly self-expressive. Typically, the
consumer has much to learn about the product category. This buyer will pass through a learning
process, first developing beliefs about the product, then attitudes, and then making a thoughtful
purchase choice. Example: buying Cars, or PCs.
Dissonance-reducing buying behaviour
Dissonance-reducing buying behavior occurs when consumers are highly involved with an
expensive, infrequent, or risky purchase but see little difference among brands. For example,
consumers buying carpeting may face a high-involvement decision because carpeting is
expensive and self-expressive. Yet buyers may consider most carpet brands in a given price range
to be the same. In this case, because perceived brand differences are not large, buyers may shop
around to learn what is available but buy relatively quickly. Another Example might be
purchasing furniture.
Habitual buying behaviour
Habitual buying behavior occurs under conditions of low-consumer involvement and little
significant brand difference. For example, take table salt. Consumers have little involvement in
this product category—they simply go to the store and reach for a brand. If they keep reaching
for the same brand, it is out of habit rather than strong brand loyalty. Consumers appear to have
low involvement with most low-cost, frequently purchased products. Ad repetition creates brand
familiarity rather than brand conviction. Consumers do not form strong attitudes toward a brand;
they select the brand because it is familiar.
Variety-seeking buying behaviour
Consumers undertake variety-seeking buying behavior in situations characterized by low
consumer involvement but significant perceived brand differences. In such cases, consumers
often do a lot of brand switching. For example, when buying cookies, a consumer may hold
some beliefs, choose a cookie brand without much evaluation, and then evaluate that brand
during consumption. But the next time, the consumer might pick another brand out of boredom
or simply to try something different.

Part-3: The Buyer Decision Process

The buyer decision process has five stages. The Following figure shows the buyer decision
process:

Figure 3: The Buyer Decision Process

Need recognition
The buying process starts with need recognition—the buyer recognizes a problem or need. The
need can be triggered by internal stimuli when one of the person’s normal needs—for example,
hunger or thirst—rises to a level high enough to become a drive. A need can also be triggered by
external stimuli. For example, an advertisement or a discussion with a friend might get you
thinking about buying a new car
Information search
In the information search stage, the consumer is aroused to search for more information, the
consumer may simply have heightened attention or may go into active information search.
Consumers may search information from their memory. This information may be related to
recalling the brands, recalling some attributes of the items, recalling evaluations, or recalling past
experiences. Consumers may also obtain information from some other sources.
These include personal sources (family, friends, neighbors, acquaintances), commercial sources
(advertising, salespeople, dealer Web sites, packaging, displays), public sources (mass media,
consumer rating organizations, Internet searches), and experiential sources (handling, examining,
using the product). The relative influence of these information sources varies with the product
and the buyer
Evaluation of alternatives
Alternative evaluation is the process in which the consumer uses information to evaluate
alternative brands in the choice set. How consumers go about evaluating purchase alternatives
depends on the individual consumer and the specific buying situation. In some cases, consumers
use careful calculations and logical thinking. At other times, the same consumers do little or no
evaluation; instead, they buy on impulse and rely on intuition. Sometimes consumers make
buying decisions on their own; sometimes they turn to friends, online reviews, or salespeople for
buying advice.
Purchase decision
Purchase decision is the buyer’s decision about which brand to purchase. Both the attitude of
others and unexpected situational factors can influence the ultimate decision. Several factors
influences the judgements and decision making of the consumers.
Biases: Consumers’ disposition to make judgments in a certain way.
1. Confirmation bias: consumers will focus on judgement that confirm what they already
believe. Less than optimal decisions.
2. Self-positivity bias: they believe that bad things are more likely to happen to other people
that to themselves.
3. Negativity bias: consumers give negative information more weight that positive
information. Not applicable for committed brand.
Heuristics: mental shortcuts to minimize efforts. Prominent when MAO low.
1. Representativeness heuristic: making judgements based on comparisons with category
prototype or exemplar.
2. Availability heuristic: Judgements based on how easy it is recalling an event to mind.
3. Law of small numbers: people expect information obtained from a small sample to be
typical of the larger population.
Anchoring and adjustment process: consumers employ when making judgments. Starting with an
initial evaluation and adjusting it with additional information.
Prospect Theory: consumers’ evaluation of gain and losses. It describes how consumers make
decisions by evaluating possible outcomes against their own subjective utility or wealth.
1. It proposes that possible gains are evaluated differently against possible losses.
 2. Prospect theory can also explain the endowment effect.
Biases in decision Processes:
1. Attraction effect: when the addition of an inferior brand to a consideration set increases
the attractiveness of the dominant brand.
2. Extremeness aversion: options that are extreme for some attributes are less attractive than
those perceived as at a moderate level.
3. Compromise effect: a brand gains market share because it is seen as the intermediate or
compromise choice rather than as an extreme choice.
The decision-making process can be of three types.
Making thought-based decisions:
1. Compensatory model: a mental cost-benefit analysis model in which negative features
can be compensated for by positive ones.
2. Non-compensatory model: a simple decision model in which negative information leads
to rejection of the option.
3. Brand Processing: evaluating one brand at a time.
4. Multi-attribute expectancy-value model: when considering multiple attributes, consumers
tend to give more weight to those that are compatible with their goals.
5. Conjunctive model: a non-compensatory model that sets minimum cut- offs to reject bad
options.
6. Disjunctive model: a non-compensatory model that sets acceptable cut-offs to find
options that are good.
Decisions based on product attributes:
Attribute processing: Comparing brands, one attribute at a time.
Additive difference model: consumers evaluate differences between the two brands on each
attribute and then combine them into an overall preference.
Lexicographic model: a non-compensatory model that compares brands by attributes, one at a
time in order of importance.
Elimination-by-aspects model: like the lexicographic model but adds the notion of acceptable
cut-offs.
Making feeling-based decisions: tends to be more satisfied, critical for offering with hedonic,
symbolic, or aesthetic aspects.
Appraisals and feelings: appraisal theory states how our emotions are determined by the way in
which we think or appraise the situations. Consumers also consider how they will feel if a
hedonic experience is interrupted.
Affective forecasts and choices: a prediction of how you will feel in the future.

Post-purchase behaviour
The stage of the buyer decision process in which consumers take further action after purchase
based on their satisfaction or dissatisfaction with a purchase. Cognitive dissonance is buyer
discomfort caused by post-purchase conflict. e. Satisfied customers buy a product again, talk
favorably to others about the product, pay less attention to competing brands and advertising, and
buy other products from the company. A dissatisfied consumer responds differently. Bad word of
mouth often travels farther and faster than good word of mouth. It can quickly damage consumer
attitudes about a company and its products.

Part-4: Model of Buyer Behavior

Figure 4: Model of Buyer Behavior.

Marketing stimuli consist of the four Ps: product, price, place, and promotion. Other stimuli
include major forces and events in the buyer’s environment: economic, technological, political,
and cultural. All these inputs enter the buyer’s black box, where they are turned into a set of
buyer responses: the buyer’s brand and company relationship behavior and what he or she buys,
when, where, and how often.
Marketers want to understand how the stimuli are changed into responses inside the consumer’s
black box, which has two parts. First, the buyer’s characteristics influence how he or she
perceives and reacts to the stimuli. Second, the buyer’s decision process itself affects his or her
behavior. We look first at buyer characteristics as they affect buyer behavior and then discuss the
buyer decision process.