What is Consumer Behaviour? Definition, Factors, Models & Methods

Understanding consumer behaviour is key to creating successful marketing plans. Businesses can better meet customer needs when they know what influences how people buy. By aligning marketing efforts with consumer behaviour, businesses can increase brand awareness, attract new customers, and ultimately grow their market share. 

Consumer behaviour includes several stages, from first seeing a product to deciding whether to buy it. This article will explore consumer behaviour and its effects on marketing strategies.

What is Consumer Behaviour? 

Consumer behaviour is the study of how individuals, groups, and organizations decide on the acquisition, use, and disposal of goods and services. It covers various aspects of purchasing behaviour, such as the decision-making process, psychological factors, social influences, and evaluation after purchase.

This insight helps businesses customize their marketing strategies to better align with the needs and preferences of their target audience.

Characteristics of Consumer Behaviour

Key characteristics of consumer behaviour include:

• Diverse and Dynamic: Consumers have varied needs, preferences, and behaviours that change over time.
• Influenced by Multiple Factors: Behavior is shaped by psychological, social, cultural, and personal factors.
• Decision-Making Process: Involves a series of steps, including need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase evaluation.
• Subject to Trends and Influences: Consumer behaviour is affected by trends, societal changes, and marketing efforts.
• Emotional and Rational: Consumers can be influenced by both emotional appeals and rational considerations.

Consumer Behaviour in Marketing

In marketing, consumer behaviour is crucial as it informs how companies develop and execute their marketing strategies. By understanding consumer behaviour, businesses can:

• Segment the Market: Identify different consumer segments based on their preferences, behaviours, and demographics.
• Develop Targeted Marketing Campaigns: Craft messages and promotions that resonate with specific consumer groups.
• Improve Product Design: Design products that meet the needs and desires of consumers.
• Optimize Pricing Strategies: Set prices based on what consumers are willing to pay.
• Enhance Customer Experience: Create better shopping experiences that align with consumer expectations.

Importance of Consumer Behaviour

Understanding consumer behaviour is important for several reasons:

• Informed Decision-Making: Helps businesses make data-driven decisions regarding product development, marketing, and sales strategies.
• Customer Satisfaction: Enables businesses to meet customer needs more effectively, leading to higher satisfaction and loyalty.
• Competitive Advantage: Provides insights into consumer preferences and trends, allowing businesses to stay ahead of competitors.
• Efficient Resource Allocation: Guides marketing efforts and budgets more effectively by targeting the right audience.
• Product Innovation: Drives innovation by identifying gaps in the market and new opportunities for growth.

Factors Influencing Consumer Behaviour

There are a host of factors that influence consumer behaviour. Some of the important factors are listed in the table below:

Theory of Consumer Behaviour

Several theories explain consumer behaviour, including:

• Economic Theory: Assumes consumers make rational decisions to maximize utility based on price and income constraints.
• Psychological Theory: Focuses on the mental and emotional processes that influence buying behaviour, including motivation, perception, and learning.
• Behavioural Theory: Examines how consumer behaviour is shaped by conditioning and reinforcement, emphasizing observable behaviours.
• Sociocultural Theory: Highlights the role of social and cultural influences on consumer decisions, including family, social groups, and cultural norms.
• Nudge Theory: Suggests that subtle changes in the presentation of choices can significantly influence consumer decisions without restricting options. For instance, healthier food options should be placed at eye level in a cafeteria to encourage better eating habits.
• Theory of Reasoned Action (TRA): Proposes that a consumer's intention to perform a behaviour is the most immediate predictor of the behaviour, influenced by attitudes and subjective norms. For instance, a consumer's intention to buy eco-friendly products is influenced by their attitude towards environmental protection and social pressure.
• Theory of Planned Behavior (TPB): Extends TRA by adding perceived behavioural control, suggesting that a consumer's intention to perform a behaviour is also affected by their control over the behaviour. This model basically focuses on intention, attitudes, subjective norms, and perceived control. For instance, a consumer's intention to start exercising may be influenced by their attitude towards fitness, social support, and perceived ability to overcome obstacles.

Scope of Consumer Behavior

The scope of consumer behaviour includes:

• Pre-Purchase Behavior: How consumers identify needs, search for information, and evaluate alternatives before making a purchase.
• Purchase Behavior: The decision-making process and factors influencing the final choice of a product or service.
• Post-Purchase Behavior: How consumers use and evaluate products, including satisfaction, brand loyalty, and potential for repeat purchases.
• Consumer Decision-Making Models: Various models and frameworks that outline how consumers make decisions, such as the consumer decision-making process model.

Impact of Economic Conditions on Consumer Behaviour

Economic conditions play a significant role in shaping consumer behaviour. Factors such as inflation rates, employment levels, and income distribution can greatly influence how consumers choose to spend their hard-earned money.

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During economic downturns or recessions, consumers tend to become more price-conscious. With uncertainty looming over the market, they become cautious about their spending habits. This often leads them to opt for cheaper alternatives and prioritize essential goods and services over luxury purchases. For example, people may choose generic brands instead of premium ones or cut back on dining out at expensive restaurants.

On the flip side, during economic booms or periods of stability with higher disposable incomes, consumers are more likely to engage in luxury purchases. When individuals feel financially secure, they are more willing to splurge on high-end products or indulge in experiences that were previously deemed too extravagant. This increased purchasing power stimulates the economy by boosting sales for businesses that cater to these desires.

Businesses must keep a keen eye on economic conditions as they directly impact consumer behavior patterns. By understanding how fluctuations in the economy affect consumer preferences and purchasing power, companies can tailor their marketing strategies accordingly. They can adjust retail pricing strategies based on customers' willingness to spend during different economic phases while ensuring they meet the evolving needs of their target audience.

Impact Of The Internet On Consumer Behaviour

The internet has had a profound impact on consumer behaviour, transforming the way people make purchasing decisions. With it, consumers have much easier access to information about products and services. Consumers now have the power to research and compare options before making a final choice.

Easy Access To Information

One significant way the internet has influenced consumer behaviour is by providing a wealth of information at our fingertips. Gone are the days when we had to rely solely on advertisements or salespeople for product details. With just a few clicks, extensive information about various offerings, including features, specifications, prices, and customer reviews.

This accessibility empowers consumers to make informed decisions based on their specific needs and preferences. They no longer have to rely solely on the claims made by companies; they can verify them through online research.

Rise Of Consumers Purchasing Online  

The internet has revolutionized retail by allowing consumers to shop from the comfort of their homes or even on-the-go using mobile devices. Shopping online has become increasingly popular due to its convenience factor and the availability of a wide range of options at competitive prices. 

This shift in consumer behaviour has disrupted traditional brick-and-mortar stores as more people opt for online purchases. The ease of comparing prices across different websites enables consumers to find better deals without physically visiting multiple stores.

Influence Of Social Media

Today, the use of social media platforms has become a trend, playing a significant role in shaping consumer behaviour and the role of different marketing actors. These platforms provide an avenue for users to exchange opinions, reviews, and experiences with products and services. Consumers often turn to social media for recommendations or seek advice from friends and influencers before making purchase decisions.

The ability to read real-life experiences from other users helps build trust and influences consumer choices. Positive reviews can increase interest in a product or service, while negative feedback may deter potential buyers.

Social media platforms offer targeted advertising based on user preferences and browsing history. This personalized approach allows businesses to reach their target audience more effectively and influence their purchasing decisions.

Four Types Of Consumer Behaviour In Marketing

Proper analysis of consumer behaviour is of great importance for marketers in developing effective retail marketing strategies. In the vast world of consumer behaviour, there are four main types that influence purchasing decisions:

Routine Response Behavior

Consumers exhibiting routine response behaviour tend to make frequent purchases with minimal thought or effort. They have established brand loyalty and seek convenience in their buying process. For marketers targeting this type of consumer, focusing on building strong brand loyalty and providing convenient purchasing options is key. Promotions that highlight the ease of purchase or emphasize the familiarity and trustworthiness of a brand can be effective in capturing their attention.

Limited Decision-Making

Limited decision-making occurs when consumers engage in some information search before making a purchase. They may compare different products or brands based on features and benefits. Marketers catering to these consumers should emphasize the unique selling propositions (USPs) of their products or services. Providing clear information about product attributes, benefits, and how they stand out from competitors can help sway their decision-making process.

Extensive Decision-Making

Consumers who engage in extensive decision-making conduct thorough research when purchasing expensive or complex products. This type of consumer wants to gather as much information as possible before making a decision. Marketers targeting these consumers should provide detailed information about their products or services, including specifications, comparisons with competitors' offerings, customer reviews, and expert opinions. By addressing potential concerns or questions through comprehensive content marketing efforts, marketers can establish credibility and build trust with these consumers.

Impulsive Buying Behavior

Impulsive buying behaviour involves consumers making unplanned purchases based on emotions or immediate desires. These consumers are driven by the thrill of the moment rather than rational decision-making processes. Marketers looking to tap into this type of consumer behaviour need to create attractive displays and promotions that catch their attention. Limited-time offers eye-catching packaging, and persuasive messaging can all contribute to triggering impulsive purchases.

Understanding these four types of consumer behaviour allows marketers to tailor their strategies accordingly. By aligning marketing efforts with the specific needs and preferences of each type, companies can increase their chances of engaging consumers and driving sales.

What is the Buying Process in Consumer Behaviour? 

The buying process is a series of steps that consumers go through when making a purchase. It involves several stages, starting from need recognition to post-purchase evaluation. Each stage can be influenced by various factors, such as personal preferences, marketing messages, and recommendations from others.

Need Recognition: This is the first stage where consumers realize they have a need or desire for a particular product or service. It could be triggered by internal factors like running out of a product or external factors like seeing an advertisement.

Information Search: Once consumers recognize their needs, they start gathering information about different options available in the market. They may seek information from friends and family, as well as online reviews or visit stores to compare prices and features.

Evaluation of Alternatives: In this stage, consumers evaluate different alternatives based on their needs and preferences. They consider factors like quality, price, brand reputation, and previous experiences to narrow down their choices.

Purchase Decision: After evaluating alternatives, consumers make their final purchase decision. Decisions such as this can be influenced by various factors such as pricing promotions, discounts offered by competitors, or even personal preferences.

Post-Purchase Evaluation: Once the purchase is made, consumers tend to evaluate their satisfaction with the product or service. If they are satisfied with their purchase experience and the product meets their expectations, it eventually leads to repeated purchases and positive word-of-mouth recommendations.

Methods Used To Study Consumer Behaviour

There are various methods utilized in the study of consumer behaviour, allowing researchers to gain insights into the decision-making processes and preferences of individuals. Here, we will discuss three important methods:

Surveys & Questionnaires

Surveys and questionnaires are commonly used methods to gather data about consumer preferences, attitudes, and behaviours. Researchers design surveys with a series of questions that consumers can answer either online or on paper. These questions may inquire about their purchasing habits, brand preferences, or opinions on specific products or services.

Observational Research

Observational research involves observing consumers' actions in real-life situations without direct interaction or interference. Researchers may observe shoppers in stores, track online browsing behaviour using cookies, or monitor social media activity to gain insights into consumer behaviour patterns.

Focus Group

A focus group plays its role by bringing together a small group of individuals who fit the target market profile to discuss specific topics related to consumer behaviour. A moderator facilitates the group discussion while providing a platform for participants to exchange and share their thoughts, opinions, and experiences.

Models Of Consumer Behaviour

Several important models of consumer behaviour help explain how consumers make purchasing decisions. Here are some key models:

Economic Model

Assumes that consumers make rational decisions to maximize their utility based on their budget and the prices of goods and services. It focuses on the rational decision-making and utility maximization. For instance, a consumer compares prices and quality to get the best value for their money.

Psychological Model

Emphasizes the mental and emotional processes that influence consumer behaviour, including perception, motivation, and learning. It focuses on the internal psychological factors like needs, perceptions, and attitudes. For example, consumers' purchase decisions might be influenced by their perception of a brand's image or emotional appeal.

Behavioural Model

Focuses on observable behaviours and how consumers respond to different stimuli, often based on conditioning and reinforcement. For instance, a consumer repeatedly buys a product due to positive reinforcement from previous purchases.

Sociocultural Model

This model highlights the impact of social and cultural factors on consumer behaviour, including family, social groups, and cultural norms. To illustrate this, a consumer's choice of clothing may be influenced by fashion trends and cultural values.

Decision-Making Model

Outlines the stages consumers go through when making a purchase decision: need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase evaluation. For instance, a consumer identifies a need for a new car, researches options, compares features, makes a purchase, and evaluates satisfaction afterwards.

Hierarchical Model

Suggests that consumer behaviour follows a hierarchy of needs or stages, starting from basic needs to more complex desires. For instance, a consumer first addresses basic needs (e.g., food and shelter) before moving on to higher-order desires (e.g., luxury items).

Black Box Model

This model focuses on understanding the internal decision-making process (the "black box") by studying the inputs (stimuli) and outputs (responses) without directly observing the internal cognitive processes. For example, it analyzes how different advertising messages affect purchasing behaviour without delving into the consumer's thought process.

Engel-Kollat-Blackwell Model

A comprehensive model that outlines the consumer decision-making process, including problem recognition, information search, evaluation, purchase, and post-purchase behaviour. For instance, a consumer decides to buy a laptop, going through stages like recognizing the need, researching options, evaluating features, making the purchase, and assessing satisfaction.

Howard-Sheth Model

This model focuses on how consumers make choices based on the interaction of psychological and sociological factors, including decision-making rules and learning. This model, basically, focuses on the interplay of learning and decision rules in consumer choice. For example, a consumer's choice of a brand may be influenced by prior experiences, social influences, and decision rules learned over time.

Consumer Decision Journey Model

Emphasizes the non-linear and iterative nature of the consumer decision-making process, recognizing that consumers may loop back to previous stages. It focuses on the dynamic and cyclical nature of consumer decision-making. For example, a consumer researching a product may revisit the evaluation stage multiple times before making a final purchase decision.

Nicosia Model

The Nicosia model focuses on communication between consumers and marketers as they engage in an exchange relationship. According to this model, consumer decisions are influenced by both external stimuli and internal factors, such as attitudes, motivations, and perceptions. The model emphasizes the importance of feedback loops between consumers and marketers.

Conclusion

Summarizing this article, consumer behaviour and consumer buying behaviour are complex topics that have a significant impact on businesses and marketing strategies. We have explored various aspects of consumer behaviour, including the factors that influence their decision-making process and the different types of buying behaviour. We have learned that consumer behaviour is influenced by internal or external factors such as personal preferences, social influences, and marketing efforts.

Additionally, we have discussed the different stages of the consumer buying process, from problem recognition to post-purchase evaluation. Overall, consumer behaviour and consumer buying behaviour are complex phenomena that require careful consideration and analysis for businesses to succeed in the market.

Frequently Asked Questions (FAQs)

1. How do cultural factors influence consumer behaviour?

Cultural factors play a part in shaping consumer behavior. They include shared values, beliefs, customs, traditions, language preferences, and social norms within a particular society or group. These cultural influences affect what people consider acceptable or desirable in terms of products or services.

2. What are some psychological factors that impact consumer behaviour?

Psychological factors that influence consumer behaviour include perception (how individuals interpret information), motivation (the underlying needs driving their actions), learning (acquiring knowledge through experience), attitudes (evaluations towards specific objects), personality traits (consistent patterns of thoughts or behaviours), and lifestyle choices.

3. How does social media affect consumer behaviour?

The effect of social media has a lasting impact on consumer behaviour. It acts as a platform where opinions are shared, seek recommendations, and engage with brands directly. Social media platforms also allow marketers to get hold of their target audiences based on demographics, interests, and behaviours, enabling personalized advertising campaigns that can influence purchase decisions.

4. What role does pricing play in consumer behaviour?

Pricing is a critical factor influencing consumer behaviour. Consumers consider the perceived value of a product or service in relation to its price. Factors such as discounts, promotions, and pricing strategies (e.g., penetration pricing or premium pricing) can significantly impact consumers' decision-making process.

5. How do reference groups influence consumer behaviour?

Reference groups are individuals or groups that consumers compare themselves to or seek approval from when making purchase decisions. These groups can be family members, friends, colleagues, or even celebrities. Consumers often align their preferences and behaviours with those of their reference groups to gain acceptance or conform to social norms.

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