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What is Consumer Behavior?

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❶You must create an account to continue watching. Within consumer behaviour, a particular area of interest is the study of how innovative new products, services, ideas or technologies spread through groups.

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What Is Consumer Behavior?
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For example, one person may suggest the purchase category, another may search for product-related information while yet another may physically go to the store, buy the product and transport it home. It is customary to think about the types of decision roles; such as:.

For most purchase decisions, each of the decision roles must be performed, but not always by the same individual. The importance of children as influencers in a wide range of purchase contexts should never be underestimated and the phenomenon is known as pester power.

To understand the mental processes used in purchasing decisions, some authors employ the concept of the " black box "; a figurative term used to describe the cognitive and affective processes used by a consumer during a purchase decision. The decision model situates the black box in a broader environment which shows the interaction of external and internal stimuli e. The decision model assumes that purchase decisions do not occur in a vacuum. Rather, they occur in real time and are affected by other stimuli, including external environmental stimuli and the consumer's momentary situation.

The elements of the model include: In addition, the buyer's black box includes buyer characteristics and the decision process, which influence the buyer's responses.

The black box model considers the buyer's response as a result of a conscious, rational decision process, in which it is assumed that the buyer has recognized a problem, and seeks to solve it through a commercial purchase. In practice some purchase decisions, such as those made routinely or habitually, are not driven by a strong sense of problem-solving.

High involvement products are those that carry higher levels of risk and are often expensive, infrequent purchases. The consumer buying process is usually depicted as consisting of 5 distinct stages: The purchase decision begins with the problem recognition stage which occurs when the consumer identifies a need, typically defined as the difference between the consumer's current state and their desired state.

The strength of the need drives the entire decision process. Information search describes the phase where consumers scan both their internal memory and external sources for information about products or brands that will potentially satisfy their need.

The aim of the information search is to identify a list of options that represent realistic purchase options. Throughout the entire process, the consumer engages in a series of mental evaluations of alternatives , searching for the best value. Towards the end of the evaluation stage, consumers form a purchase intention, which may or may not translate into an actual product purchase. The stages of the decision process normally occur in a fixed sequence.

The first stage of the purchase decision process begins with problem recognition also known as category need or need arousal. This is when the consumer identifies a need, typically defined as the difference between the consumer's current state and their desired or ideal state. A simpler way of thinking about problem recognition is that it is where the consumer decides that he or she is 'in the market' for a product or service to satisfy some need or want.

The strength of the underlying need drives the entire decision process. Theorists identify three broad classes of problem-solving situation relevant for the purchase decision: Consumers become aware of a problem in a variety of ways including: During the information search and evaluation stages, the consumer works through processes designed to arrive at a number of brands or products that represent viable purchase alternatives. Typically consumers first carry out an internal search ; that is a scan of memory for suitable brands.

The evoked set is a term used to describe the set of brands that a consumer can elicit from memory and is typically a very small set of some 3- 5 alternatives. The fact that a consumer is aware of a brand does not necessarily mean that it is being considered as a potential purchase. For instance, the consumer may be aware of certain brands, but not favourably disposed towards them known as the inept set. Such brands will typically be excluded from further evaluation as purchase options.

For other brands, the consumer may have indifferent feelings the inert set. Traditionally, one of the main roles of advertising and promotion was to increase the likelihood that a brand name was included in the consumer's evoked set.

In practice, the consideration set has assumed greater importance in the purchase decision process because consumers are no longer totally reliant on memory. The implication for marketers is that relevant brand information should be disseminated as widely as possible and included on any forum where consumers are likely to search for product or brand information, whether traditional media or digital media channels.

Thus, marketers require a rich understanding of the typical consumer's touchpoints. Consumer evaluation can be viewed as a distinct stage. Alternatively, evaluation may occur continuously throughout the entire decision process. Consumers evaluate alternatives in terms of the functional also called utilitarian and psycho-social also called the value-expressive or the symbolic benefits offered. Brand image or brand personality is an important psycho-social attribute. Consumers can have both positive and negative beliefs about a given brand.

Consumers who are less knowledgeble about a category tend to evaluate a brand based on its functional characteristics.

However, when consumers become more knowledgeable, functional attributes diminish and consumers process more abstract information about the brand, notably the self-related aspects. The marketing organization needs a deep understanding of the benefits most valued by consumers and therefore which attributes are most important in terms of the consumer's purchase decision.

During the evaluation of alternatives, the consumer ranks or assesses the relative merits of different options available. No universal evaluation process is used by consumers across all-buying situations. Thus the relevant evaluation attributes vary according to across different types of consumers and purchase contexts. For example, attributes important for evaluating a restaurant would include food quality, price, location, atmosphere, quality of service and menu selection.

Consumers, depending on their geographic, demographic, psychographic and behavioural characteristics, will decide which attributes are important to them. Potential patrons seeking a hedonic dining experience may be willing to travel further distances to patronise a fine-dining venue compared to those wanting a quick meal at a more utilitarian eatery.

After evaluating the different product attributes, the consumer ranks each attribute or benefit from highly important to least important. Once the alternatives have been evaluated, the consumer firms up their resolve to proceed through to the actual purchase. Purchase intentions are a strong, yet imperfect predictor of sales. Sometimes purchase intentions simply do not translate into an actual purchase and this can signal a marketing problem.

The extent to which purchase intentions result in actual sales is known as the sales conversion rate. Organizations use a variety of techniques to improve conversion rates. The provision of easy credit or payment terms may encourage purchase. Sales promotions such as the opportunity to receive a premium or enter a competition may provide an incentive to buy now rather than defer purchases for a later date.

Advertising messages with a strong call-to-action are yet another device used to convert customers. Other types of calls-to-action might provide consumers with strong reasons for purchasing immediately such an offer that is only available for a limited time e.

The key to a powerful call-to-action is to provide consumers with compelling reasons to purchase promptly rather than defer purchase decisions. As consumers approach the actual purchase decision, they are more likely to rely on personal sources of information.

Methods used might include: Following purchase and after experiencing the product or service, the consumer enters the final stage, namely post-purchase evaluation. The consumer's purchase and post-purchase activities have the potential to provide important feedback to marketers. The post purchase stage is where the consumer examines and compares product features, such as price, functionality, and quality with their expectations. This is also known as "post-purchase intention".

Consumer actions, in this instance, could involve requesting a refund, making a complaint, deciding not to purchase the same brand or from the same company in the future or even spreading negative product reviews to friends or acquaintances, possibly via social media. After acquisition, consumption or disposition, consumers may feel some uncertainty in regards to the decision made, generating in some cases regret.

Post-decision dissonance also known as cognitive dissonance is the term used to describe feelings of anxiety that occur in the post purchase stage; and refers to the consumer's uneasy feelings or concerns as to whether or not the correct decision was made at purchase. This type of anxiety can affect consumers' subsequent behaviour and may have implications for repeat patronage and customer loyalty.

Consumers use a number of strategies to reduce post purchase dissonance. A typical strategy is to look to peers or significant others for validation of the purchase choice. Marketing communications can also be used to remind consumers that they made a wise choice by purchasing Brand X. When consumers make unfavorable comparisons between the chosen option and the options forgone, they may feel post-decision regret or buyer's remorse.

Consumers can also feel short-term regret when they avoid making a purchase decision, however this regret can dissipate over time. This refers to the formation of hypotheses about the products or a service through prior experience or word of mouth communications.

There are four stages that consumers go through in the hypothesis testing: Hypothesis generation, exposure of evidence, encoding of evidence and integration of evidence. Internal influences refer to both personal and interpersonal factors.

Social theory suggests that individuals have both a personal identity and a social identity. Personal identity consists of unique personal characteristics such as skills and capabilities, interests and hobbies.

Social identity consists of the individual's perception of the central groups to which an individual belongs and may refer to an age group, a lifestyle group, religious group, educational group or some other reference group. Social psychologists have established that the need to belong is one of the fundamental human needs.

Demographic factors include income level, psychographics lifestyles , age, occupation and socio-economic status. Personality factors include knowledge, attitudes, personal values, beliefs , emotions and feelings. Psychological factors include an individual's motivation , attitudes , personal values and beliefs. Other factors that may affect the purchase decision include the environment and the consumer's prior experience with the category or brand.

Social identity factors include culture, sub-culture and reference groups. The consumer's underlying motivation drives consumer action, including information search and the purchase decision.

The consumer's attitude to a brand or brand preference is described as a link between the brand and a purchase motivation. One approach to understanding motivations, was developed by Abraham Maslow. Maslow's hierarchy of needs is based on five levels of needs, organized accordingly to the level of importance. Maslow's five needs are: Physiological needs and safety needs are the so-called lower order needs.

Consumers typically use most of their resources time, energy and finances attempting to satisfy these lower order needs before the higher order needs of belonging, esteem and self-actualization become meaningful.

Part of any marketing program requires an understanding of which motives drive given product choices. Marketing communications can illustrate how a product or brand fulfills these needs. Another approach proposes eight purchase motivations, five negative motives and three positive motives, which energise purchase decisions as illustrated in the table below.

In the marketing literature, the consumer's motivation to search for information and engage in the purchase decision process is sometimes known as involvement. On the other hand, a purchase decision is classified as high involvement when psycho-social risks are perceived to be relatively high.

Part of marketing strategy is to ascertain how consumers gain knowledge and use information from external sources. The perception process is where individuals receive, organize and interpret information in order to attribute some meaning. Perception involves three distinct processes: Sensation is also part of the perception process, and it is linked direct with responses from the senses creating some reaction towards the brand name, advertising and packaging.

The process of perception is uniquely individual and may depend on a combination of internal and external factors such as experiences, expectations, needs and the momentary set. When exposed to a stimulus, consumers may respond in entirely different ways due to individual perceptual processes.

Selective exposure occurs when consumers decide whether to be exposed to information inputs. Selective attention occurs when consumers focus on some messages to the exclusion of others.

Selective comprehension is where the consumer interprets information in a manner that is consistent with their own beliefs. Selective retention occurs when consumers remember some information while rapidly forgetting other information. The way that consumers combine information inputs to arrive at a purchase decision is known as integration. Marketers are interested in consumer perceptions of brands, packaging, product formulations, labeling and pricing.

Of special interest is the threshold of perception also known as the just noticeable difference in a stimulus. For example, how much should a marketer lower a price before consumers recognize it as a bargain? Accordingly, white packaging would be an inappropriate color choice for food labels on products to be marketed in Asia. The consumer's prior experience with the category, product or brand can have a major bearing on purchase decision-making.

Experienced consumers also called experts are more sophisticated consumers; they tend to be more skillful information searchers, canvass a broader range of information sources and use complex heuristics to evaluate purchase options.

Novice consumers, on the other hand, are less efficient information searchers and tend to perceive higher levels of purchase risk on account of their unfamiliarity with the brand or category. When consumers have prior experience, they have less motivation to search for information, spend less effort on information search but can process new information more efficiently. Purchasing behaviour can also be affected by external influences, such as culture , sub-culture , social class , reference groups , family and situational determinants.

Culture is the broadest and most abstract of the external factors. Culture refers to the complexity of learning meanings, values, norms, and customs shared by members of a society. Cultural norms are relatively stable over time, therefore, culture has a major impact on consumer behaviour. Research studies have consistently shown that culture influences almost every aspect of purchasing: Marketers, interested in global expansion, are especially interested in understanding cross-cultural differences in purchasing and consumption.

For instance, Ferrari, one of the world's top brands found that Chinese consumers are very different from their Western counterparts.

Whereas consumers in the US, UK and Australia expect to wait 12 months for a custom-made Ferrari, prospective Chinese buyers want to drive the vehicle off the showroom floor.

Buyers see their friends riding around in a luxury car and want to have the same as quickly as possible. To meet the growing demand for luxury goods, Ferrari and other luxury car makers have been forced to modify their production processes for Asian markets.

Subcultures may be based on age, geographic, religious, racial, and ethnic differences. More often, however, a subculture occurs when people with shared interests form a loose-knit group with a distinctive identity sometimes called consumer tribes. Members of subcultures are self-selected, and signal their membership status by adopting symbols, rituals or behaviours that are widely understood by other members of the tribe e. For example, within youth culture it is possible to identify a number of sub-groups with common interests such as skaters and bladers, surfers, ravers, punks, skin-heads, Goths, homies and others.

A different type of subculture is a consumption subculture which is based on a shared commitment to a common brand or product. In other words, consumption subcultures cut across demographic, geographic and social boundaries. The most well-known example of a consumption subculture is that of Harley-Davidson motorcycle owners. Ethnographic researchers who have studied Harley riders believe that there are only two types of motor cyclists; namely Harley owners and the rest.

Subcultures are important to marketers for several reasons. Secondly, and perhaps less obviously, many new fads and fashions emerge spontaneously from within these tribal groups. Trend-spotters are accordingly interested in studying the lifestyles and activities of tribes in an effort to spot new trends before they go mainstream. Social class refers to relatively homogenous divisions in a society, typically based on socio-economic variables such as educational attainment, income and occupation.

Social class can be very difficult to define and measure, however marketers around the world tend to use a conventional classification which divides any given population into five socio-economic quintiles e. AB socio-economic segments are of particular interest to marketers of luxury goods and services such as travel, dining-out, entertainment, luxury cars, investment or wealth management services, up-market consumer electronics and designer labels e.

A reference group is defined as "a group whose presumed perspectives or values are being used by an individual as the basis for his or her judgment, opinions, and actions. The literature identifies five broad types of reference group; primary, secondary, aspirational, dissociative and formal:. Opinion Leaders can act like reference groups in that they exert considerable social influence because of their product knowledge, expertise and credibility. In the marketing literature, opinion leaders are also known as influencers, mavens and even hubs.

Typically, opinion leaders have high levels of involvement with the product category, are heavy users of the category and tend to be early adopters of new technologies within the category.

In order to leverage the value of opinion leaders in marketing strategies, it is important to be able to identify the unique opinion leaders for each category or situation and this can be very challenging. Some techniques that can be used are through key informants, socio-metric techniques and self-questionnaires. Marketers of cosmetics and skincare preparations regularly provide fashion editors with free samples in the hope that their products will be mentioned in fashion magazines.

The family has a great impact on the individual because he learn from his young age how to act as a conscious consumer by acquiring the skills, values and trends of his family environment. As the family plays an important role in the consuming process and affects the behavior of its purchasing members, those interested in marketing should design the advertisements to suit this role. The role of the husband and wife in the purchasing decisions can be categorized into three types: The goods are purchased by a decision of the wife only.

Children play an important role in the family's purchasing processes but their role varies according to the age of the child. Older children tend to consume higher-priced goods such as computers, bedrooms, trips, etc.

Situation determinants play an important role in influencing the behavior of the consumer and are factors independent of the individual and its characteristics, and related to the place and time of purchase or consumption, and know that it "The temporal and spatial conditions surrounding the purchasing and consumer position that temporarily affect the behavior of the individual without having to do with his or her personal characteristics or the elements of the marketing mix".

These effects fall into two sets of factors: A number of theorists have argued that certain fundamental decision-making styles can be identified. Based on these factors, the authors developed a typology of eight distinct decision-making styles: The Consumer Styles Inventory CSI has been extensively tested and retested in a wide variety of countries and purchasing contexts.

In addition to understanding the purchasing decision, marketers are interested a number of different aspects of consumer behaviour that occur before, during and after making a purchase choice. Areas of particular interest include: The consumer's perceptions of risk are a major consideration in the pre-purchase stage of the purchasing decision.

Perceived risk is defined as "the consumer's perceptions of the uncertainty and adverse consequences of engaging in an activity". The marketing literature identifies many different types of risk, of which five are the most frequently cited: If a consumer perceives a purchase to be risky, he or she will engage in strategies to reduce the perceived risk until it is within their tolerance levels or, if they are unable to do so, withdraw from the purchase.

Services marketers have argued that risk perception is higher for services because they lack the search attributes of products i. Experience goods, such as restaurants and clubs, can only be evaluated with certainty after purchase or consumption. In the case of credence goods, such as many professional services, the consumer finds it difficult to fully appreciate the quality of the goods even after purchase and consumption has occurred. Difficulties evaluating quality after consumption may arise because the cost of obtaining information is prohibitive, or because the consumer lacks the requisite skills and knowledge to undertake such evaluations.

Typical risk-reduction strategies used include: Within consumer behaviour, a particular area of interest is the study of how innovative new products, services, ideas or technologies spread through groups. Insights about how innovations are diffused i. In addition, diffusion models provide benchmarks against which new product introductions can be tracked. A sizeable body of literature has been devoted to the diffusion of innovation.

However, the exact shape and timing of curves varies in different product markets such that some innovations are diffused relatively quickly, while others can take many years to achieve broad market acceptance. The diffusion model developed by Everett Rogers is widely used in consumer marketing because it segments consumers into five groups, based on their rate of new product adoption. An innovation is any new idea, object or process that is perceived as new by members of the social system.

Communication channels are the means by which information about the innovation is transmitted to members of the social system and may include mass media, digital media and personal communications between members of the social system. Time refers to the rate at which the innovation is picked up by the members of the social system. A number of factors contribute to the rate at which innovations are diffused through a social community. Innovations with some or all of these factors are more likely to be adopted quickly.

Accordingly, marketing communications may stress the innovation's relative benefits over other solutions to the consumer's problem. Marketing messages may also focus on compatibility and observability.

Marketers can also facilitate adoption by offering limited scale trial e. Studies have shown that the diffusion rate for many new technologies is speeding up. For example, it took decades for the telephone to achieve 50 percent penetration rates beginning in around , but it took less than five years for cellphones to achieve the same penetration rates. In order to explain the increasing pace of adoption, some have pointed to supply-side issues such as reduced barriers to entry and lower costs of innovation, [] [] while others have argued that consumers drive adoption rates because they place a high value on the convenience of new innovations.

Brand-switching occurs when a consumer chooses to purchase a brand that is different to the regular or customary brand purchased. Consumers switch brands for a variety of reasons including that the store did not have the regular brand or the consumer's desire for variety or novelty in brand choice. In the fast moving consumer goods market FMCG , the incidence of switching is relatively high.

A great deal of marketing activity is targeted at brand-switchers. Marketers are particularly interested in understanding the factors that lead to brand-switching. The concept of switching costs also known as switching barriers is pertinent to the understanding of brand switching.

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Today, consumer behaviour (or CB as it is affectionately known) is regarded as an important sub-discipline within marketing and is included as a unit of study in .

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Consumer behavior involves services and ideas as well as tangible products. The impact of consumer behavior on society is also of relevance. For example, aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have serious repercussions for .

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Customer Behavior online seminar broadcasts from the best minds in marketing Be sure to check out our Upcoming Online Seminars. Tune in LIVE or watch the recordings at any time. Consumer behavior is a hotbed of psychological research as it ties together issues of communication (advertising and marketing), identity (you are what you buy), social status, decision-making, and mental and physical health. Corporations use findings about consumer behavior to .

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To define consumer behavior: it is the study of consumers and the processes they use to choose, use (consume), and dispose of products and services. A more in depth definition will also include how that process impacts the world. Understanding consumer behavior is a vital aspect of marketing. Consumer behavior is the study of how people make decisions about what they buy, want, need, or act in regards to a product, service.