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Consumer & Organisational Behaviours


CONSUMER AND ORGANISATIONAL BEHAVIOURS

WHAT IS CONSUMER BEHAVIOUR?

Consumer behaviour or buyer behaviour is the observable actions and reactions of the consumer in relation to the marketing mix, his person, his society and other factors that make buy goods and services.

Consumer behaviour is the study of individuals, groups, or organisations and the processes they use to select, secure, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. It attempts to understand the decision-making processes of buyers, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people’s wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general.

By studying consumer behaviour, a marketing manager will be able to answer the following questions: Who are the buyers of the product? Why do consumers purchase the product? Moreover, what they buy, how they buy, when they buy, are the concerns of the marketing manager. Thus, the objective of consumer behaviour as a field of inquiry is to understand, explain and predict human actions in the consumption role.

FACTORS INFLUENCING CONSUMER BEHAVIOUR

Consumer purchases are influenced strongly by cultural, social, personal, and psychological characteristics.

1.   Cultural Factors

Cultural factors exert a broad and deep influence on consumer behaviour. The marketer needs to understand the role played by the buyer’s culture, subculture, and social class.

Culture

Culture is the way of life of a people, i.e., a community, tribe, etc. This reflects in the way they dress, what they eat, amongst other behaviours.

Cultural

Social
Personal
Psychological
Culture Subculture Social ciass
Groups Family Roles and status
Age and life cycle stage Occupation Economic situation Lifestyle
Motivation, Perception, Learning, Beliefs and Attitudes.
Subculture

A group of people with shared value systems based on common life experiences and situations. This is culture organized around such factors as race, nationality, religion, or geographic location.

Social Class

This is made of people in a society whose members share similar values, interests, and behaviours. For example, people in the same social class (upper class, middle class, and lower class) share the same values, interests and behaviour.

2.   Social Factors

A consumer’s behaviour is also influenced by social factors, such as the consumer’s small groups, family, and social roles and status.

Groups

A person’s behaviour is influenced by many small groups. Groups that have a direct influence and to which a person belongs are called membership groups, for example, people in the same age group influence one another.

Family

Family members can strongly influence buyer behaviour. The .family is the most important consumer buying organization in society, and it has been researched extensively. Marketers are interested in the roles and influence of the husband, wife, and children on the purchase of different products and services.

Roles and status

People usually choose products appropriate to their roles and status. Consider the various roles a working mother plays. In the company, she plays the role of a brand manager. In her family, she plays the role of wife and mother; at her favourite sporting events, she plays the role of a fan. As a brand manager, she will buy the kind of clothing that reflects her role and status in her company.

  Transportation – Importance, Modes & Choice Of Transport Mode

3. Personal Factors

A buyer’s decisions also are influenced by personal characteristics such as the buyer’s age and life-cycle stage, occupation, economic situation, lifestyle, and personality and self-concept.

Age and Life-Cycle Stage

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 stage through which families might pass as they mature over time. Marketers often define their target markets in terms of life-cycle stage and develop appropriate products and marketing plans for each stage.

Occupation

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.

Economic Situation

A person’s economic situation will affect product choice. Marketers of income-sensitive goods watch trends in personal income, savings, and interest rates. If economic indicators point to a recession, marketers can take steps to redesign, reposition, and reprice their products closely.

Lifestyle

Lifestyle is a person’s pattern of living as expressed in his or her psychographics. It involves measuring consumers major 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 behaviour.

4. Psychological Factors

There are four psychological factors that induce buying and consumption. They are: motivation, perception, learning, beliefs and attitudes.

Motivation – This is anything that encourages you to buy a good or service.

Perception – is the process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world.

Learning – a change in behaviour due to experience. The implication of this is that learning should bring about change in behaviour.

Beliefs and Attitudes – A belief is a thought a person holds about something. Particular important to the marketers is the fact that buyers often hold distinct beliefs about brands and products based on their country of origin.

An attitude is a person’s favourable or unfavourable evaluations, emotional feelings, and action tendencies towards some object or idea. People have attitudes towards almost everything: religion, politics, clothes, food, and so on. Attitudes put them in disliking an object, moving towards or away from it. Thus, a company will be well advised to fit its product into existing attitude rather than trying to change them.

THE CONSUMER DECISION-MAKING PROCESS

The consumer purchase decision process is generally viewed as consisting of sequential steps or stages through which the buyer passes in purchasing a product or service. The various steps in this process as shown in figure 4.1 are discussed as follows:

A.Problem recognition

The first step in the consumer decision-making process is that of problem recognition. There are various causes and sources of problem recognition. These include:

  Marketing Of Mineral Products

1.   Out of stock

2.   Dissatisfaction

3.   New needs/wants

4.   Related products/purchases

5.   Marketer induced problem recognition

6.   New products

B. Information Search

The second step in the consumer decision making process is information search. Internal search involves a scan of information stored in memory to recall past experiences or knowledge regarding purchase alternatives. External search involves going to outside sources to get information such as personal sources, marketer controlled sources, public sources, or through personal experiences such as examining or handling a product.

C. Alternative Evaluation

After getting information during the information search stage the consumer moves to alternative evaluation. At this stage the consumer compares the various brands and services he or she has identified as being capable of solving the consumption problem and satisfying the needs or motives that initiated the decision process. The list of alternatives is a subset of all the brands of which the consumer is aware and actively considering in the decision process. The goal of marketers is to ensure that their brands are included in the list of consumers.

D. Purchase Decision

As an outcome of the alternative evaluation stage the consumer may develop a purchase intention or decision to buy a certain brand. Once a purchase intention has been made and an intention formed, the consumer must still implement it and make the actual purchase. Many purchase decisions are made on the basis of brand loyalty which is a preference for a particular brand that results in its repeated purchase. Many purchase decisions for non-durable, low price items take place in the store and decision and purchase occur almost simultaneously.

Post-purchase Evaluation

The consumer decision process does not end once the product or service has been purchased. After using a product or service the consumer compares the level of performance with expectations. Satisfaction occurs when the consumer’s expectations are either met or exceeded, while dissatisfaction results when performance is below expectations.

Another possible outcome of purchase is cognitive dissonance which refers to a feeling of psychological tension or post-purchase doubt a consumer may experience after making a difficult purchase choice. Consumers often look to advertising for supportive information regarding the choice they have made.

ORGANISATIONAL BUYING BEHAVIOUR

Organizational buying in the opinion of Webster and Wind (2011) is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.

Organisational buying is heavily influenced by derived demand, that is, demand for an end product or for a product or service sold by the buyer’s customers. The demand for components by a manufacturer will be dependent on demand coming from their customers, the retailers and wholesalers, who in turn are reacting to demand from their customers, the consumers. Overall consumer demand may in turn be impacted by economic, social, political and technological factors in the environment, as discussed in chapter three.

FACTORS INFLUENCING ORGANISATIONAL BUYING BEHAVIOUR

Four main influences impact the business buying decision process: environmental factors, organizational factors, interpersonal factors, and individual factors.

Environmental Factors

Competitive conditions may enable a company’s short-term success, where the organization is able to operate irrespective of customer desires, suppliers, or other organizations in their market environment. Early entrants into emerging industries are likely to be internally focused due to few competitors.

  Classification of Products

Nevertheless, as industries grow, these sectors become more competitive. New entrants are attracted to potential growth opportunities, and existing producers attempt to differentiate themselves through improved products and more efficient production processes. As a result, industry capacity often grows faster than demand and the environment shifts from a seller’s market to a buyer’s market. Firms respond to changes with aggressive promotional techniques such as advertising or price reductions to maintain market share and stabilize unit costs.

Organizational Factors

Organizational factors such as the company’s objectives, purchasing policies, and resources can influence the buying process. The size and composition of the buying center also plays a role in the business buying decision process.

Interpersonal Factors

The interpersonal relationships between people working in the company’s buying center can hinder the buying process. Buying center members need to trust each other and operate under full disclosure.

Individual Factors

The personal characteristics of people in the buying center can influence the buying decision process. Individual factors including age, education level, personality, job tenure, and position within the company all play a role in how a person influences the buying process.

SUMMARY

A consumer is a person or group of people, such as a household, who are the final users of products or services. Consumers or buyers can be viewed as individuals, households or firms who buy or acquire goods or services for personal consumption or usage.

Consumer behaviour or buyer behaviour is the observable actions and reactions of the consumer in relation to the marketing mix, his person, his society and other influencing stimuli. Consumer purchases are influenced strongly by cultural, social, personal, and psychological characteristics.

The consumer purchase decision process is generally viewed as consisting of sequential steps or stages through which the buyer passes in purchasing a product or service.

The various steps in this process are problem recognition, information search, alternative evaluation, and purchase decision. After the purchase, the consumer still needs to do post purchase evaluation.

Organization buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.

Four main influences impact the business buying decision process: environmental factors, organizational factors, interpersonal factors, and individual factors.


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