🛒 Consumer Behaviour

Main Topics Covered

Definition, scope and disciplinary roots of consumer behaviour
Origins: how marketing shifted toward the behavioural sciences
Purchase, use and disposal activities, and the three types of consumer response
Decision-making roles and the black box model
The five stages of the purchase decision process
Internal influences: motivation, perception, symbolism, prior experience, random factors
External influences: culture, subcultures, social class and reference groups

📖 Definition and Scope

Consumer behaviour is the study of individuals, groups, or organisations and all activities associated with the purchase, use and disposal of goods and services. It covers how a consumer's emotions, attitudes and preferences affect buying behaviour, and how external cues (visual prompts, auditory signals, tactile or haptic feedback) shape those responses.

Consumer behaviour entails "all activities associated with the purchase, use and disposal of goods and services, including the consumer's emotional, mental and behavioural responses that precede or follow these activities."

The consumer may be an individual or an organisation. More specifically, a consumer is "an end user, and not necessarily a purchaser, in the distribution chain of a good or service."
It emerged in the 1940-1950s as a distinct sub-discipline of marketing, but is now an interdisciplinary social science drawing on:
- psychology
- sociology
- social anthropology and anthropology
- ethnography and ethnology
- marketing
- economics (especially behavioural economics)
It formally investigates individual qualities such as:
- demographics
- personality and lifestyles
- behavioural variables (usage rates, usage occasion, loyalty, brand advocacy, willingness to provide referrals)
It also investigates influences on the consumer, from social groups (family, friends, sports, reference groups) to society in general (brand-influencers, opinion leaders).

Definitions

American Marketing Association: consumer behaviour is "the dynamic interaction of affect and cognition, behaviour, and environmental events by which human beings conduct the exchange aspects of their lives."
Consumer behaviour analysis: the "use of behaviour principles, usually gained experimentally, to interpret human economic consumption."
As a field of study it is an applied social science, standing at the intersection of economic psychology and marketing science.

Research Tools Used Today

Because consumer behaviour is unpredictable, marketers and researchers use:

ethnography
consumer neuroscience
machine learning
customer relationship management (CRM) databases

CRM data allows detailed examination of customer loyalty, re-purchase intentions, referrals and brand advocacy. It also supports market segmentation, particularly behavioural segmentation, enabling highly targeted and personalised marketing.

🕰️ Origins of Consumer Behaviour

1940s-1950s: marketing was dominated by the classical schools of thought, which were highly descriptive and relied heavily on case studies, with only occasional interviews.
End of the 1950s: two important reports criticised marketing for lacking methodological rigour, especially for failing to adopt mathematically oriented behavioural science research methods. This set the stage for a consumer-behaviourist perspective.
From the 1950s: marketing shifted away from economics toward the behavioural sciences (sociology, anthropology, clinical psychology). Results:
- A new emphasis on the customer as the unit of analysis.
- New concepts: opinion leadership, reference groups, brand loyalty.
- Market segmentation, especially demographic segmentation based on the socioeconomic status (SES) index and household life-cycle, became fashionable.
- Greater scientific sophistication in theory development and testing.

Motivation Research

Early consumer behaviour was heavily influenced by motivation research, used extensively by advertising consultants and in psychology in the 1920s, 1930s and 1940s.
By the 1950s marketing adopted its techniques: depth interviews, projective techniques, thematic apperception tests, and a range of qualitative and quantitative methods.
More recent additions: ethnography, photo-elicitation techniques, phenomenological interviewing, and contemporary tools such as neuroimaging studies and big data analytics, which give deeper insight into subconscious motivations and decision-making.
Today consumer behaviour ("CB") is an important sub-discipline of marketing and a unit of study in almost all undergraduate marketing programs.

🧭 What Consumer Behaviour Is Concerned With

Activity type	What it covers
Purchase activities	Acquiring goods or services and everything leading to the decision: information search, evaluating goods and services, payment methods, and the purchase experience
Use or consumption activities	The who, where, when and how of consumption and the usage experience, including symbolic associations and how goods are distributed within families or consumption units
Disposal activities	How consumers dispose of products and packaging; may include reselling (e.g. eBay, second-hand markets)

Types of Consumer Response

Response	Also called	Meaning
Emotional	Affective	Emotions such as feelings or moods
Mental	Cognitive	The consumer's thought processes
Behavioural	Conative	The consumer's observable responses relating to purchase and disposal

🛍️ The Purchase Decision and Its Context

Understanding purchase and consumption behaviour is a key challenge for marketers. Consumers are active decision-makers: they decide what to buy, often based on disposable income or budget, and may change preferences with their budget and other factors.

Some decisions involve long, detailed processes with extensive information search between competing alternatives.
Other decisions are made under a lack of time, knowledge or negotiating ability. Impulse buys and habitual purchases are made almost instantaneously with little or no information search.
Some decisions are made by groups (families, households, businesses), others by individuals.

Decision-Making Roles

In a small group such as a household, different members may be involved at different stages and perform different roles.

Role	Description
Initiator	Proposes a brand (or product) for consideration
Influencer	Recommends a given brand
Decider	Makes the ultimate purchase decision
Purchaser	Orders or physically buys the product
User	Uses or consumes the product

For most purchases every role must be performed, but not always by the same person.
Example, dining out: a parent initiates by saying they are too tired to cook; the children influence; both parents act as joint deciders, performing a gate-keeping role by vetoing unacceptable alternatives and encouraging acceptable ones.
The influence of children on purchases should never be underestimated; the phenomenon is known as pester power.

The Black Box Model

The black box represents the cognitive and affective processes a consumer uses during a purchase decision.
The decision model places the black box in a broader environment showing the interaction of external and internal stimuli (consumer characteristics, situational factors, marketing influences, environmental factors) and consumer responses.
It is related to the black box theory of behaviourism, where the focus extends beyond processes inside the consumer to the relation between stimuli and the consumer's response.
Purchase decisions do not occur in a vacuum: they occur in real time and are affected by external environmental stimuli and the consumer's momentary situation.
Elements of the model:
- Interpersonal stimuli (between people) and intrapersonal stimuli (within people)
- Marketing stimuli: actions planned and carried out by companies
- Environmental stimuli: events in the wider environment, with social, economic, political and cultural dimensions
- The buyer's black box itself: buyer characteristics and the decision process, which influence the buyer's responses

🔄 The Purchase Decision Process

The stages: problem recognition -> information search -> evaluation of alternatives -> purchase decision -> post-purchase evaluation.

1. Problem Recognition

Also known as category need or need arousal. The consumer identifies a need, typically defined as the difference between the current state and the desired or ideal state; they decide they are "in the market" for a product or service. The strength of the underlying need drives the entire decision process.

Three classes of problem-solving situation:

Type	Description
Extensive problem-solving	Greater deliberation, extensive search and evaluation. Typically expensive purchases or those with high social visibility (e.g. fashion, cars)
Limited problem-solving	Known or familiar purchases, regular purchases, straight re-buys; typically low-priced
Routinised problem-solving	Repeat or habitual purchases

Ways consumers become aware of a problem:

Out-of-stock / natural depletion: replenishing a consumable (e.g. ran out of milk or bread)
Regular purchase: buying on a regular basis (e.g. newspapers, magazines)
Dissatisfaction: unhappiness with the current product or service
New needs or wants: lifestyle changes (e.g. a new baby prompts buying a cot, stroller and car-seat)
Related products: one purchase triggers a need for accessories, spare parts or complements (a printer leads to ink cartridges; a digital camera leads to memory cards)
Marketer-induced problem recognition: marketing persuades consumers of a problem they did not realise they had; traditional and social media content, consumed consciously and subconsciously, acts as a stimulus
New products or categories: innovative products offer a superior way to fulfil a need; disruptive technologies (e.g. wireless-free communication devices) can trigger a need for many products such as a new mouse or printer

2. Information Search

Search and evaluation aim to arrive at a number of brands that are viable purchase alternatives.

Consumers first carry out an internal search, scanning memory for suitable brands.
The evoked set is the set of brands a consumer can elicit from memory, typically a very small set of about 3-5 alternatives.
They may supplement it with an external search: the Internet, brand websites, shopping around, product reviews, peer referrals.
Easy information availability has raised informedness: how well consumers know what is available, with which attributes and at what price.

Brand sets:

Set	Meaning
Inept set	Brands the consumer is aware of but not favourably disposed towards; excluded from further evaluation
Inert set	Brands toward which the consumer has indifferent feelings
Consideration set	The "small set of brands which a consumer pays close attention to when making a purchase decision"; realistic purchase options
Choice set	Alternatives that are strong contenders for purchase

Brands enter the consideration set based on how well they satisfy the consumer's purchasing objectives and/or the salience or accessibility of the brand at decision time. More memorable brand names are more accessible.
Traditionally, advertising and promotion aimed to get a brand into the evoked set; repeated exposure built top-of-mind brand awareness.
With the Internet, consumers are no longer totally reliant on memory, so the consideration set has gained importance.
Marketing is defined as "the process by which companies create value for customers and build strong customer relationships, in order to capture value from customers in return." This implies a relationship built on exchange and the creation of value.
Implication for marketers: disseminate brand information as widely as possible on any forum where consumers search, whether traditional or digital media. Marketers need a rich understanding of the typical consumer's touchpoints.

3. Evaluation of Alternatives

Evaluation may be a distinct stage or may occur continuously throughout the process. Consumers evaluate alternatives by two kinds of benefit:

Benefit	Also called	Meaning
Functional	Utilitarian	Tangible outcomes the consumer can experience, such as taste or physical appearance
Psycho-social	Value-expressive, symbolic	Abstract outcomes and personality-related attributes of a brand, such as the social currency of an expensive suit, designer label or "hot" car

Brand image (brand personality) is an important psycho-social attribute. Consumers are predisposed toward brands whose personality matches their own. A good match can affect brand preference, choice, satisfaction, commitment, loyalty and the propensity to give positive word-of-mouth referrals.
Self-congruity research investigates the match between brand personality and consumer personality.
Social media is a two-way street: unlike regular media, consumers can communicate back, share views with peers and gauge the positive and negative sides of each alternative.
Beliefs about a brand vary with prior experience and with selective perception, distortion and retention.
Knowledge effect: less knowledgeable consumers evaluate brands on functional characteristics; as they become more knowledgeable, functional attributes diminish and they process more abstract, self-related brand information.
No universal evaluation process exists; consumers generate different criteria for each buying situation. For a restaurant, attributes include food quality, price, location, atmosphere, quality of service and menu selection. Consumers' geographic, demographic, psychographic and behavioural characteristics determine which attributes matter. Someone seeking a pleasant dining experience may travel farther to a fine-dining venue than someone wanting a quick meal.
Weighted scoring: the consumer ranks each attribute from most to least important (priorities relate directly to needs and wants), then combines subjective attribute scores, weighted by importance, into a total mental score or rank for each brand.
Marketers need to understand which benefits consumers value most and should monitor other brands in the customer's consideration set.

4. Purchase Decision

Purchase intent is the self-instruction to buy (e.g. "Yes, I will buy Brand X one day"). It is a strong yet imperfect predictor of sales.
The sales conversion rate is the extent to which purchase intentions result in actual sales. Failure to convert can signal a marketing problem (e.g. the consumer does not know which outlets stock the product).

Techniques to improve conversion:

Easy credit or payment terms
Sales promotions (premiums, competitions) that give an incentive to buy now
Calls-to-action: devices that encourage immediate sale, using imperative verbs ("Buy now!", "Don't wait!") or reasons to act at once, such as limited-time offers ('Limited stocks available'), deadlines ('Order before midnight to receive a free gift') or special deals ('Two for the price of one for the first 50 callers only')
Service convenience: minimising the effort customers bear in buying

The key to a powerful call-to-action is to give consumers compelling reasons to purchase promptly rather than defer.

Close to purchase: consumers rely more on personal sources, so sales representatives must master pitches and closing tactics:

Social evidence: referring to previous success and satisfaction of other customers
Scarcity attraction: stating the offer is limited, forcing a quicker decision and less time evaluating alternatives

5. Post-Purchase Evaluation

After experiencing the product, the consumer compares features such as price, functionality and quality with their expectations, correlating expectations with perceived value. This influences the next purchase. Foxall suggested it gives key feedback to marketers because it shapes future purchase patterns.
Positive evaluation (e.g. a new phone): encourages buying the same brand or company again, known as post-purchase intention.
Dissatisfaction: the consumer may request a refund, complain, decide not to buy from that brand or company again, or spread negative reviews to friends, possibly via social media.

Post-decision (cognitive) dissonance

The feeling of anxiety after purchase, and uneasy concern about whether the right decision was made (e.g. regret at not buying another considered brand).
It can affect subsequent behaviour, repeat patronage and customer loyalty.
Strategies to reduce it: seek validation from peers or significant others (today also social media likes, reviews and testimonials); marketing communications reminding consumers they made a wise choice.

Regret

Post-decision regret or buyer's remorse arises from unfavourable comparisons between the chosen option and forgone options.
Consumers can also feel short-term regret when they avoid a purchase decision, but it can dissipate over time.

Hypothesis testing: consumers form hypotheses about products or services from prior experience or word of mouth. Four stages: hypothesis generation, exposure of evidence, encoding of evidence, integration of evidence.

🌐 Influences on the Purchase Decision

Purchasing is influenced by a wide range of internal and external factors.

Consumer Awareness

Consumer awareness is awareness of the consumption of goods bought in the long-term shopping environment and purchasing activities.

Change of life concept is the subjective factor: as living standards and incomes rise, life concepts change. Differences in consumer personality are the internal motivation for changes in awareness.
Intensified market competition is a catalyst. Many companies launched their own branded products, consumers' brand awareness matured, and paying attention to brand became fashionable. Companies realised the importance of brand strategy and began focusing on market research to grasp consumers' psychology and improve market share and brand loyalty.
Rational consumption psychology has become more prominent. Social marketing, customised marketing, brand-name shopping, and price sensitivity are main factors for understanding consumer attitudes and explain how demand reacts to price changes.

Internal Influences

Internal influences are personal and interpersonal factors.

Personal identity: unique personal characteristics such as skills, capabilities, interests and hobbies.
Social identity: perception of the central groups one belongs to (age group, lifestyle group, religious group, educational group, other reference group).
The need to belong is a fundamental human need.

Factor group	Includes
Demographic	Income level, psychographics (lifestyles), age, occupation, socioeconomic status
Personality	Knowledge, attitudes, personal values, beliefs, emotions, feelings
Psychological	Motivation, attitudes, personal values, beliefs
Social identity	Culture, sub-culture, reference groups

The environment and prior experience with the category or brand also matter.

Motivations and Emotions

Underlying motivation drives action, including information search and purchase. Attitude to a brand (brand preference) is a link between the brand and a purchase motivation.
Motivations may be negative (to avoid pain or unpleasantness) or positive (to achieve a reward such as sensory gratification).

Maslow's hierarchy of needs (five levels, ordered by importance):

Level	Need
Physiological	Food, water, sleep
Safety	Physical safety, shelter, security
Belonging	Love, friendship, group acceptance
Esteem	Status, recognition, self-respect
Self-actualisation	Self-fulfilment (e.g. personal growth, artistic expression)

Physiological and safety needs are lower order needs. Consumers use most of their resources (time, energy, finances) on them before the higher order needs (belonging, esteem, self-actualisation) become meaningful.
Marketing communications can show how a product or brand fulfils these needs.
Maslow's model is generalised for human motivation in many contexts and is not specific to purchasing decisions.
Another approach proposes eight purchase motivations, five negative and three positive, providing positive or negative reinforcement.

Involvement

Involvement is the motivation to search for information and engage in the decision process: "the personal relevance or importance of a message [or a decision]".
Low involvement: only a small psycho-social loss if the decision is poor.
High involvement: relatively high perceived psycho-social risk.
It depends on perceived risk of negative consequences, the social visibility of the product, and prior experience with the category.

Perception

Perception is the process by which individuals receive, organise and interpret information to attribute meaning to it. It involves three processes: sensing, selecting and interpreting information. Sensation, linked directly to responses from the senses, creates reactions toward the brand name, advertising and packaging. Perception is individual and depends on experiences, expectations, needs and the momentary set.

Process	Meaning
Selective exposure	Consumers decide whether to be exposed to information inputs
Selective attention	Focusing on some messages to the exclusion of others
Selective comprehension	Interpreting information consistently with one's own beliefs
Selective retention	Remembering some information while rapidly forgetting other information

Together these lead consumers to favour certain messages over others. Integration is how consumers combine information inputs to reach a purchase decision.
Marketers care about perceptions of brands, packaging, product formulations, labelling and pricing.
The threshold of perception (just noticeable difference): e.g. how far must a price fall before consumers see it as a bargain?
Cultural differences in perception: westerners associate white with purity, cleanliness and hygiene, while in eastern countries white is often associated with mourning and death, so white food packaging would be inappropriate for Asian markets.

Symbolic Consumer Behaviour

Consumption symbols can explain the consumer as a group member or a unique individual. Consumption is not only material and psychological.

Symbolic consumption has two meanings:

A symbol of consumption: consumption expresses and transmits meaning derived from culture, letting us use products to symbolise membership in social groups. It is a process of social expression and communication.
Symbolic consumption: people consume the cultural and social significance products represent, including mood, beauty, grade, status, atmosphere, style and emotional appeal. It is typically reflected in brand consumption.

A brand has three functions for consumers: functional value, symbolic value and experience value.
Luxury brands: their power goes beyond conveying identity; some consumers want to make an impression. Luxury goods were once the daily routine of the aristocracy; after modern social class blurred, consumers still regard them as a ticket into the upper class. Consumers evaluate a brand by how it aligns with their identity, which helps define and maintain self-concept, and luxury becomes a symbol of noble status, wealth and success.

Prior Experience

Consumer type	Characteristics
Experienced (experts)	More skilful information searchers, canvass a broader range of sources, use complex heuristics
Novices	Less efficient searchers; perceive higher purchase risk because of unfamiliarity

With prior experience, consumers have less motivation to search and spend less effort, but process new information more efficiently.
One study found that as experience increases, consumers generate a larger consideration set, but only at the product category level.

Random Factors

Special occasions and random conditions at purchase. Decisions may be made in unexpected circumstances, or a situation may delay or shorten decision-making. Research found that in waiting scenarios, seemingly unrelated physical cues such as area carpets or queue guidelines can act as virtual boundaries that alter consumers' initial decisions.

External Influences

Culture, sub-culture, social class, reference groups, family and situational determinants.

Culture

Culture is the broadest and most abstract external factor: the complexity of learned meanings, values, norms and customs shared by members of a society. Norms are relatively stable, so culture has a major effect.
It influences almost every aspect of purchasing: self-identity and motivation, information processing, and interpretation of advertising. Perceived value and happiness are critical in shaping attitudes and behavioural intentions.
Cultural choice of consumption is shaped by two factors:
- External: the overall social and cultural atmosphere (consumption atmosphere, customs, trends)
- Internal: the consumer's artistic quality, aesthetic pursuit and cultural value orientation
Cross-cultural example, Ferrari: consumers in the US, UK and Australia expect to wait 12 months for a custom-made Ferrari, whereas prospective Chinese buyers want to drive off the showroom floor. China is an "instant-gratification market", and luxury car makers modified production processes for Asian markets.

Subcultures

Based on age, geography, religion, race and ethnicity, but more often formed when people with shared interests form a loose-knit group with a distinctive identity (consumer tribes), e.g. punks or goths in youth culture.
Members are self-selected and signal membership through symbols, rituals or behaviours (dress code, hairstyle, unique way of speaking). They create a sense of belonging.
A consumption subculture is based on shared commitment to a common brand or product and cuts across demographic, geographic and social boundaries. The best-known example is Harley-Davidson owners; ethnographers believe there are only two types of motorcyclists: Harley owners and the rest. Harley-Davidson leveraged this by establishing the Harley Owners Group (HOG).

Why subcultures matter to marketers:

They can be sizeable, profitable and influential market segments.
Many new fads and fashions emerge spontaneously from tribes, so trend-spotters study them to spot trends before they go mainstream.

Social Class

Social class: relatively homogenous divisions in society, typically based on educational attainment, income and occupation. It is hard to define and measure.
Marketers conventionally divide a population into five socio-economic quintiles (Australia: AB, C, D, E, FG with AB the top; much of Asia: I to V with I the top).
In Australia the AB group is just 24% of the population but controls 50% of discretionary spending. The top quintiles interest marketers of luxury goods and services (travel, dining out, entertainment, luxury cars, wealth management, up-market electronics, designer labels such as Louis Vuitton).
Middle-class consumers consume more carefully and collect information to compare producers. Lower-class consumers tend to buy more on impulse, while the wealthy buy goods to maintain social status.

Reference Groups

A reference group is "a group whose presumed perspectives or values are being used by an individual as the basis for his or her judgment, opinions, and actions." They guide attitudes, beliefs and values, and understanding group influence and group socialisation shows how consumers acquire a value system.

Type	Description
Primary	Groups such as family that exert a strong influence on attitudes and behaviours
Secondary	Clubs, societies, sports teams, political parties, religions that align with a person's ideas or values but exert less fundamental influence
Aspirational	Groups the individual does not belong to but may aspire to join because of admired characteristics
Dissociative	A group with a negative image; individuals disapprove of its values or behaviours and seek to distance themselves
Formal	Named as the fifth type in the literature

Consumer Behavior: Marketing Study Notes