consumer behavior essay definition

Consumer Behavior – Definition and Examples

Table of Contents

What is Consumer Behavior in Marketing?

In marketing, understanding consumer behavior has become very important for businesses. Consumer behavior refers to the study which analyzes how consumers make decisions about their wants, needs, buying or act with respect to a product, service or organization. It is very critical to understand the behavior of consumers to analyze the behavior of potential consumers towards a new product or service. It is also very useful for companies to identify opportunities which have not yet been met.

An example in the aspect of consumer behavior is the change in eating habits which drastically increased the demand for gluten-free products. Businesses which have identified this market gap have produced gluten-free products and have tapped this market aspect as well.

On the other side, those companies which failed in monitoring consumer behavior could not manage to fill this void in the marketplace and were left behind. Understanding the behavior of consumers allows pro-active companies to increase their market share through anticipating the shift within the consumer choice .

Definition of Consumer Behavior

Consumer behavior can be defined as the study of psychological, physical and social actions when individuals buy, use and dispose of products, services, ideas, and practices. In other words, consumer behavior is the study of how consumers will make their buying decision and what those factors which support or influence these decisions.

According to marketers, by understanding the compelling reason for which a consumer buys a particular product or service over the other, it becomes easier to identify which product is in demand and which is obsolete so that marketing strategies can be designed accordingly.

“The buying behavior of final consumers – individuals and households who buy goods and services for personal consumption” Philip Kotler

Factor affecting Consumer Behavior

Understanding how consumer behavior impacts marketing renders it vital to understand those factors which affect consumer behavior and which include:

Cultural Factors

Consumer behavior is influenced by cultural factors like social class, buyer’s culture, and subculture. There are three types of cultural factors include social class, culture, and subculture. Culture can be different by region, different groups and even countries.

Cultural shifts are always important for marketers whether marketing new products or existing products with new features and attributes. For examples nowadays cultural shift towards health and fitness has created a huge demand for exercise equipment, low calories and organic food and other fitness services. This cultural shift greatly influenced the consumer behavior throughout the world i.e. America, England and Europe and many parts of the world. People go to Gym and love organic and healthy food.

Culture is the combination of subcultures . If you are a Muslim, Hindu or Christian, your buying behavior will be influenced by different subcultures. It will affect your choice and preferences like your food, clothing, career goals and recreational activities.

Another cultural factor is the social class that can affect the consumer buying behavior in different parts of the world. For example, in the western world, both the lower class and upper might show the same buying behavior. But in other countries like India upper class have a tendency to buy luxury cars, gadgets, and personal care products. But people from the lower class are unable to spend money on these purchases.

Social Factors

Social factors greatly influence the purchasing behavior of consumers. Social influencers are diverse and include family, school or work communities, social interaction or any group with which an individual interacts. It also includes an individual’s social class which comprises of education level, living conditions, and income.

Social Reference. For example, Last month I was eagerly needed a laptop. I went to a nearby market and purchased a MacBook Pro laptop. What factors affect my buying decision and why I purchased MacBook Pro. It was because my closest friend already having the same brand and he is quite satisfied with this product.

Family. Family plays an important role in the decision-making process. For example, if you are a married person, you will always prefer those products that would benefit both husband and wife.

Social Role and Status. Let us understand social role and status and how it affect consumer behavior. For example, you are a Chief Financial Officer in a leading organization, you are someone’s son, husband and father. your role can also affect the buying tendency of many people.

Personal Factors

Personal factors impact buying decisions and include age, economic situation and occupation. In considering personal factors, buying behavior is also influenced by habits, opinions and interests along with other personal issues.

Human Life Cycle Stages is another example , here marketers target markets based on the human life cycle. They will target teenagers with bright colors, loud music and fast food. A young couple will prefer to buy a retirement plan and secure their future.

Occupation and Economic Circumstances. A person occupation affects the consumer decision while buying goods and services. For example, if you are a blue-color worker you will prefer to buy more work-related clothes. On the other hand, if you are an office worker you will tend to buy smart clothes. Different types of companies specialize in making products based on occupational group. For example, a software house will develop different software for accountants, lawyers, retailers and engineers.

Marketers closely observe buyer personal income, saving and interest rate. Their marketing mix decisions are based on economic indicators. For example, The price of Nikon D-5 professional camera is over $6000, you can only purchase this camera if you enough disposable income, savings or borrowing power.

Lifestyle means how a person lives in a society. For example, you are living in a posh area and people have expensive watches, branded clothes and luxury cars. You have to maintain your status and image.

  Psychological Factors

Psychological factors that impact buying decision includes perception, motivation and beliefs and attitudes. Every consumer will respond to marketing message based upon their attitudes and perceptions.

Motivation. People have different needs at a time. Some needs are biological i.e. hunger, thirst and some are psychological i.e. recognition, self-esteem and belonging. When a need reaches a certain level of intensity it becomes a motive. According to Philip Kotler, a motive is a need that has the power to direct the person to seek satisfaction.

Maslow’s Hierarchy of Needs also known as Maslow’s theory of motivation was developed by Abraham Maslow in 1943. This Maslow’s theory is based on human motivation. It is shaped like a pyramid and have a bottom to top approach.  According to this hierarchy, there are five levels of human needs.

• Physiological needs consist of basic human needs like water, food and sleep.
• Safety needs consist physical safety of humans like personal, emotional, financial security
• Social Belonging and needs consist of love, friendship needs
• Self-Esteem are those needs looking for self-respect, recognition and social-status
• Self-actualization is the need for personal growth, development and realization.

Freud Theory of Motivation. This theory tells us that the unconscious psychological forces such as emotions and desires shape an individual behavior. These are three factors are Id, superego and ego.

Consumer Behavior Models

Through observation and research, there have been developed several models which further explains the buying behavior of consumers and which includes black box, personal variables as well as complex models.

• Black-box model: This model is based upon external stimulus-response which means that a point triggers the consumer’s mind to make a purchasing decision which is influenced by different factors like sampling, marketing message, promotions, product availability and price.
• Personal variables: When a consumer is influenced by personal-variable model, decisions are based upon internal factors. Internal factors may include belief systems, goals, goals, traditions, personal opinions or any other similar internal motivator.
• Complex model: Complex model includes both external and internal variables.

How to Study Consumer Behavior

Several factors affect the consumer behavior and there are some methods that are used to study consumer behavior. These methods include:

• Surveys: Surveys can be conducted on the phone, internet or in-person. Surveys should avoid the open-ended question and should include multiple-choice questions so that answers are given easily.
• Focus groups: This involves hosting a group of different type of customers to discuss over a product type and to understand the reasons why customers will buy certain brands. This should include open-ended questions and allow participants to try a new brand and write down their views about it.
• Point-of-sale: This requires obtaining statistics from stores or corporate headquarters. Companies should focus upon a particular type of product and determine whether the product is purchased more than often in a certain time period in comparison to other time periods. This paves way for researching the reasons why a particular brand was selected over the other.

About The Author

Umar Farooq

Essay on Consumer Behaviour: Top 8 Essays | Microeconomics

Here is a compilation of essays on ‘Consumer Behaviour’ for class 9, 10, 11 and 12. Find paragraphs, long and short essays on ‘Consumer Behaviour’ especially written for school and college students.

Essay on Consumer Behaviour

Essay Contents:

• Essay on the Modern Approach of Consumer Behaviour

Essay # 1. Introduction to Consumer Behaviour:

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Microeconomic theory tends to assume that individuals are the economic agents exercising the act of consumption, the decision to purchase goods and services. The consumer is assumed to choose among the available alternatives in such a manner that the satisfaction derived from consuming commodities (in the broadest sense) is as large as possible.

This implies that he is aware of the alternatives facing him and is capable of evaluating them. All the information pertaining to the satisfaction that the consumer derives from various quantities of commodities is contained in his ‘utility function’.

We assume that each consumer or family unit has complete information on all matters pertaining to its consumption decision. A consumer knows precisely what his money income will be during the planning period. ‘Utility’ refers to subjective satisfaction derived from consumption of commodities.

The 19th century economists, namely W. Stanley Jevons, Leon Walras and Alfred Marshall came up with the cardinal theory of consumer behaviour. They considered utility is measurable just as the weight of objects. The consumer is assumed to possess a cardinal measure of utility when he is able to assign every commodity, a number representing the amount or degree of utility associated with it.

Under this theory, it is possible to measure marginal utility (MU) of a commodity, whereby by MU we mean a change in utility due to a change in per unit of consumption of a commodity. Another property is the existence of Law of Diminishing Marginal Utility (LDMU).

This means as a consumer keeps on consuming successive units of the same commodity, consumption of other commodities held fixed, marginal utility diminishes. Total utility increases at a decreasing rate for successive units of consumption of a particular commodity.

Essay # 2. Assumptions of Consumer Behaviour under Cardinal Theory :

(i) Utility is numerically measurable.

(ii) Marginal utility is the unit of measurement of utility.

(iii) Marginal utility of money (or total budget) is constant.

(iv) The Law of DMU holds,

(v) Independence axiom holds.

Total utility can be expressed as sum of utilities pertaining to each commodity separately. For example, let utility be a function of two goods x 1 and x 2 , i.e.,

In Fig. 1 we divided consumption space into four zones — I, II, III, IV. Due to the axiom of non-satiation it is observed that consumption bundle, XPY (X has more of x 2 than Y for the same x 1 ). Similarly, ZPY Hence all the points in zone I are superior to Y and all the points in zone III are inferior to Y.

The remaining two zones, viz., II and IV are important to draw indifference map as follows:

A ray through origin, OH, passes through Zone II. All Space points on OP are inferior to Y but XPO i.e., somewhere between P and X where there is switch of preferences say point M. Successive drawings of such a ray through origin can make us safely assert that there is a point say M which is indifferent to X. Similar exercise can be carried out with Zone IV and joining these points like W, M, Y, T, we get a curve called Indifference Curve.

An indifference curve is a locus of points in a commodity space—or commodity bundles—among which the consumer is indifferent. Each point on an indifference curve yields the same utility as any other point on that indifference curve. The IC approach has been applied in areas of international trade and public finance, community (social) indifference curves (ICs and SICs) are used to show gains from trade.

Similarly, ICs are used to compare to the welfare effects of a lumpsum tax and a price distorting tax. IC approach including the Slutsky theorem is also used to show the effect of income tax on a worker’s labour-leisure choice. At times SICs are used to compare cost of living indices and then show the effects of price inflation.

We may now summarise the basic properties of indifference curves as follows:

1. IC is Downward Sloping:

In Fig. 2, along the IC, utility is constant. Therefore, when consumption of one commodity increases, given the level of other commodity, utility increases. But since total utility is constant, additional utility has to be sacrificed by reducing the consumption of other commodity. Hence IC is downward sloping.

2. ICs are Non-Intersecting:

In Fig. 3, CPB (since C has more of x 1 than B for same x 2 ). But CIA as both C and A lie in same IC, IC 0 . Again, BIA, as both B and A lie on same IC 1 .

. . . Therefore, by the axiom of transitivity, CIB (or BIC) which is not possible or gives con­tradictory results. Therefore ICs cannot intersect.

3. Higher ICs give Higher Utility:

It can be seen that BPA, as more of x 2 is consumed in B than A for the same amount of x 1 . Hence all the points on IC 1 are preferred to all the points on IC 0 , as it gives higher utility. Again, CPB as for same x 2 , more of x 1 is consumed. Therefore, all points on IC 2 are preferred to all points on IC 0 and IC 1 as it gives more utility. Higher IC gives higher utility (Fig. 4).

4. ICs are Convex to the Origin:

Axiom 4 leads to convexity of IC which implies diminishing MRS where by MRS we mean absolute necessary reduction in consumption of x 1 due to additional consumption of x 2 by one unit such that total utility is fixed (assuming two commodities x 1 and x 2 only)

Now we shall discuss about budget constraint and budget lines. The budget line is set off more commodity bundles than can be purchased, if the entire money income is spent.

Hence, budget constraint is given by following equation:

where m = total money income (assumed constant).

P i = price of i th commodity

X i = i th commodity, i = 1, 2,…, n

In a two-commodity framework, therefore, the budget constraint will be

m=p 1 x 1 + p 2 x 2

or, x 2 = (m/p 2 – p 1 /p 2 ) x 1 [This is indeed the equation of a downward sloping straight line.]

The solution of problem of maximisation of utility subject to the budget constraint is the main motive behind the theory of consumer behaviour.

Properties of Demand Functions :

Demand functions are homogeneous of degree zero in prices and income which means that equi-proportional and unidirectional changes in prices and money income do not alter optimality condition. This homogeneity postulate suggests that the consumer is free from money illusion.

Consumers’ initial equilibrium is point E. Every time his income increases the budget line shifts F and G are the corresponding equilibrium points. The locus of all the equilibrium points is called income consumption curve. In the Fig. 6 both x 1 and x 2 are normal goods.

If x 1 is inferior the ICC will be backward bending and if x 2 is inferior it will be forward falling. See (Fig 7). If consumption of a good falls as income rises, then such a commodity is called inferior goods. So one important prediction is that if the consumer spends all his income on two goods, both cannot be inferior at the same time.

The relation between money income and quantity consumed is explained by a function is known as the Engel’s curve. Now we allow the price of one of the two goods to fall. Suppose that of x 1 falls. In this case the budget line be­comes flatter and the consumer is able to reach higher in­difference curves and enjoy more utility or satisfaction, thus improving his level of welfare.

So every time P 1 falls, the consumer moves to higher IC and reaches a new equilibrium point. The locus of succes­sive equilibrium points is the price consumption curve (PCC) which shows the consumer’s reaction to a single price change which changes the price ratio, i.e., p 1 /p 2 .

There are two uses of PCC. First, we can derive the con­sumer’s demand curve for a commodity from the PCC. According to the ordinal approach, the demand curve for a normal good is downward sloping due to price effect which has been decomposed by Hicks and Slutsky into two parts, namely, substitution effect and income ef­fect. The slope of the demand curve depends on the relative strength of the two effects which, in turn, depends on the nature of the commodity under consideration.

From the PCC we can predict price elasticity of demand (e) by using the total outlay method.

Three points will be noted in the context:

(i) If PCC is downward sloping, demand for x 1 is price elastic.

(ii) If PCC is horizontal, demand for x 1 is unitary price elastic.

(iii) If PCC is upward sloping, demand for x 1 is price inelastic.

Essay # 5. Price Effect as a Sum-Total of Substitution Effect and Income Effect:

From the Marshallian demand curve (constant money income demand curve) it is not possible to explain the price effect because Marshallian approach is based on LDMU, i.e., cardinal theory. It was John Hicks and E. Slutsky who decomposed the price effect into two parts. Thus, two new concepts of demand curve have emerged, namely,

(i) Real income constant demand curve (the Slutsky demand curve)

(ii) Total utility constant demand curve (the Hicks demand curve)

We shall now construct Marshallian demand curve and compensated demand curve for a normal good in a two-commodity framework.

From the price effect such derivation of the demand curve for x 1 is as follows:

Let initial budget line be AS in Fig. 10(a) for price p 1 , corresponding equilibrium x 1 at E 0 is x 1 . Hence for price p 1 , x 1 is plotted in Fig. 10(b). If p 1 falls slope of budget line falls and hence AB becomes flatter. The budget line becomes AB’. The consumer reaches higher utility level on IC 2 and new equilibrium x 1 is x 1 M . Plotting this in Fig. 10(b) and joining E 0 and E M in Fig. 10(b), we get the negatively sloped demand curve for x 1 which is the Marshallian demand curve, D M .

We will construct D H and D S for same ini­tial conditions as the one we considered while drawing the Marshallian demand curve. Let price of x 1 , p 1 fall from p 1 o to p 1 ’. For Hicksian demand curve we consider budget line, CD tan­gent to initial IC 0 implying constant utility level even as new price ratio P’ 1 /P 2 and hence parallel to AB’. Because of movement from E 0 to E H , x 1 rises from x 1 to x 1 H . This is purely substitution effect, and joining E 0 and E M we get Hicksian demand curve D H .

If we follow the Slutsky approach, we can make the following two Predictions:

(i) Perfect Substitutes:

If two commodities are perfect substitutes like blue and black ink for a colour blind person the IC will be a straight line with PE = SE and IE = 0.

(ii) Perfect Compliments:

If two commodities are perfect complements like left and right shoe SE = 0 Thus, PE = IE. For Slutsky demand curve we consider budget line C’ D’ , which passes through initial equilibrium point E 0 implying that consumer is just enough to purchase initial equilibrium commodities even at new price ratio P’ 1 /P 2 , hence parallel to AB.

This hypo­thetical budget line is thus to the right of CD and hence consumer reaches higher IC, IC 1 . Consumption of x 1 rises, hence when plotted in 10(b), we see that D S is flatter than D M . The movement from E S to E M is the income effect.

The substitution effect is always negative because the entire IC approach is based on the of substitution which suggests that the consumption of one commodity is always at the expense of the other but IE is negative in case of normal good, if we consider change in real income. Thus in case of a normal good the negative income effect reinforces the negative, SE so as to make the price effect very strong in this case and the demand curve is relatively flat.

In case of an inferior good, IE is positive but less-strong than the substitution effect. So the price effect is still negative but less strong than that in the case of a normal good. In case of a Giffen good, which is essentially a price phenomenon, the positive income effect is stronger than the negative substitution effect so as to cause price effect to be positive. This is one of the exceptions to the empirical law of demand. These points are summarized in Table 1.

An important aspect of ordinal theory is the derivation of Slutsky Equation. This is done in the mathematical appendix.

Essay # 6. The Hicksian Interpretation of Consumer Behaviour:

Hicks define own-price substitution effect in terms of constant utility.

According to SARP, if (x 1 , x 2 ) is revealed preferred to (y 1 , y 2 ) (either directly or indirectly) and (y 1 , y 2 ) is different from (x 1 , x 2 ) then (y 1 , y 2 ) cannot be directly or indirectly revealed preferred to (x 1 x 2 ). Likewise, in the ordinal theory under revealed preference approach it can be proved that substitution effect is always negative. Let prices be given by P° when a consumer purchases a commodity bundle X° when X’ was affordable. This means X° is purchased at P° when X’ was affordable. This is possible only when,

Essay # 8. Modern Approach to Consumer Behaviour:

An alternative approach to the theory of consumer demand was pioneered by K. Lancaster. He argued that goods are demanded as their characteristics. It is these characteristics that yield utility. Thus, we may consider three different goods say sugar, honey and saccharixe. But they may have only two characteristic, viz., sweetness and calories. If a new sweetener is produced we analyse it not as a new good but as one better that has the same characteristics.

Thus, compared with traditional analysis, the new approach has two advantages:

(i) We can study the introduction of new goods,

(ii) We can study the effects of changes in quality.

Comparison with traditional approach:

In the traditional theory, the consumer’s indiffer­ence curves are given in terms of the original set of goods. Now if a new good is introduced in the market we have to introduce a whole new set of indifference curves or surfaces. All the information in the preference about old set of goods is discarded.

In terms of the new approach we can make an insightful analysis of consumer choice. In the real commercial world many of the so-called new goods are actually the same as the old goods with the characterisation of different proportions.

Thus, if we consider the preferences in terms of characterisation we can analyse introduction of new goods very easily. We do not have to discard any old set of prefer­ences as worse. If new goods appear in the market with new characteristics, we have to intro­duce a new set of preferences.

A major advantage of the characteristic approach is that it per­mits the analysis of many goods. At times the number of goods is considerably higher than the number of characteristics. Furthermore, once we think in terms of characteristics we have to consider substitution effect which is different from the substitution effect of the traditional theory.

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Consumer behaviour Essay

This paper critically focuses on Consumer Decision-making Process models of purchase and post-purchase in relation to the hospitality industry. The paper shall determine the extent these models are vague and all-encompassing, especially when applying to postmodern hospitality industry with the fragmented nature of consumer behaviour, and emerging trends in the global provision of products and services.

Scholars interested in the field of consumer behaviours have developed several models as attempts to explain consumers’ decision-making processes when making a purchase, and what follows after the purchase. Gordon and Saunders have identified six of such stages that involve passive and active consumption phases or sequences (Foxall, 2004).

They identify these stages as emerging needs, active consideration, researching, short-listing, purchase and post-purchase. Smith also supports these stages in his work.

A part from these scholars, other scholars have also offered different perspectives on consumer decision-making process (Kotler, Bowen and Makens, 1999; Chambers, Richard and Lewis, Robert, 2000; Onkvisit and Shaw, 1994; Howard and Sheth, 1996). However, critics argue that such models are vague and tend to be all-encompassing.

Introduction

Gabbott and Hogg offer a brief definition of consumer behaviour as “any behaviour involved in the course of buying, using and disposing of products” (Gabbott and Hogg, 1998). Critics have noted that this definition is vague and not practical. From this definition, we can learn that consumer behaviour is a technical issue to describe precisely.

Engel, Blackwell, and Miniard have offered an advance definition of consumer behaviour as “activities which directly involve decision processes prior and after stages of obtaining, consuming and disposing products” (Blackwell Engel and Miniard, 2001). They further explain how consumers choose products and services using a model of Consumer Decision-making Process (CDP).

This model indicates how consumers make decisions before undertaking any purchase decision and post-purchase decision. Consumers make their purchase at the fourth stage after undergoing all other previous stages.

Consumers look at the value of the products or service they have purchased against the satisfaction derived or fulfilled from using the product. This experience is fundamental for defining the fifth stage, post-purchase evaluation, which takes a mental evaluation of the value of the purchase.

We have noted that depending on the CDP model alone may not provide the necessary information when applied in a marketing environment. This is because there are other various factors that influence every process of CDP.

Understanding factors that influence stages of CDP model may help markets persuade consumers who intend to use their products or competitors. Consumers are likely to purchase services or products that have solved their problems in cases of recurring needs. This is a purchase they know.

The CDP model must recognise that factors such as culture, personal preferences, social status, family, and the situation also influence consumers’ purchasing behaviours.

At the individual level, we have attitude, resources, motivation, personality, and knowledge. For instance, we may consider how consumers who are conscious environmental behaviour towards purchasing green products or services in the hospitality industry.

Characteristics of products and services in the hospitality industry

Hospitality industry mainly caters for tourists or visitors have that need a unique range of services and products. We can group these services and products as packages e.g. accommodation and meals, or stand-alone products such as catering, and entertainment, among others.

We shall focus on a combination of services and products at the hospitality industry so as to enable us to understand the consumer decision-making processes when making such purchases.

This sector largely deals in provisions of services. According to marketing studies and theorists, services are intangible purchases. Thus, such purchases never really result into any ownership. In this regard, they offer various characteristics of services as follows. The hospitality industry offer services that are intangible. We can never touch, see, taste, or even smell them before we make the purchase.

Marketers in the field of hospitality offer images of their services, such as accommodation locations and the surrounding environment to make such services appear real to the consumer. This is a means of overcoming intangibility. However, such techniques do not necessarily overcome intangible characteristics of such services as tourists have to care when purchasing such services in the hospitality industry.

Services in the hospitality industry also have inseparability characteristics between production and how the service works during consumption. This characteristic influences consumer’s purchasing behaviour. Consumers may link the service to the provider together with the performance, and change their purchasing pattern if the services do not meet their expectations.

Services also tend to be heterogeneous in nature. This means services providers at the hospitality industry may find it difficult to offer the same service to every consumer when their needs arise. Different aspects like emotional status of the customer may also affect how he or she perceives the service at a certain time.

It means that consumers of hospitality products and services may not be able to predict the quality of services they may receive at their favourite places. In addition, consumers cannot depend on past their experiences in order to make subsequent purchase decisions regarding the same services or products.

There may be inherent changes in the services, service providers, or the consumers themselves that may affect the quality as well as experience of services offered.

Services also lack ownership, at least to the consumer. Consumers only experience the service through their purchases and access. Consumers will not own the service. Thus, services serve the purpose of a need satisfaction rather than tangible ownership. Therefore, purchases of services will have significant effects on emotional aspects of the consumer.

The above characteristics are just some of the aspects that may influence consumers of the hospitality industry. Marketing pundits also look at the distinction between convenience goods and shopping goods. Convenience goods tend to have low prices and high frequencies of purchases, unlike other goods that have high prices with low frequencies of purchases.

In this regard, we look at shopping goods as serving higher-order needs according to Maslow’s hierarchy of needs. Howard and Sheth note “the purchase of convenience-type goods involves the consumer in a routine problem-solving behaviour, whereas the purchase of shopping goods involves the consumer in an extensive problem-solving behaviour” (Howard and Sheth, 1996).

We can note that consumers will spend a lot of time in order to understand complex issues of services they are about to purchase in the hospitality industry. The acts of choosing tourism destinations and subsequent service providers involve high-level purchases that require consumers to search for information and make informed purchases.

It requires a high-level of commitment, time, and significant spending. Thus, Middleton and Clarke observe that such influences result into low brand loyalty and expectations of repeat purchases, and low chain of distribution (Middleton and Clarke, 2001).

Complexity in Consumer Behaviour in the Hospitality Industry

Consumers involved in purchasing hospitality products and services usually experience some technical issues. Most products and services in the hospitality industry need a high degree of involvement in making purchase decisions and a high degree of consumer commitment. This is due to the nature of products and services that consumers wish to purchase.

Thus, there are no routine or similar behaviour patterns when making such decisions. Consumers consider every purchase unique and need different approaches in making purchase decisions. Consumers in the hospitality industry must first carry out a thorough marketing research before settling on a given decision.

In turn, decision-making processes tend to take longer than when purchasing other products or services. Factors that may influence consumers at this stage may also set in, such as a holiday destination, type of holiday, individual preferences and among other factors.

Consumers link intangible services and products to high levels of insecurity in the purchasing process. The challenge is that consumers cannot have a test of the product before they make any purchase. In this case, most consumers only rely on the assurances from the services or products vendors.

The level of insecurity involved results into complex behaviour patterns where consumers collect information from several sources, including agencies. Information may come from the family, advertisement, travel agents, companies’ Web sites, and social media, among others.

Holidays and visits are significant events in an individual’s life. Thus, there is a considerable level of emotions involved. Holidays restore physical health and provide a chance of escaping the routine of workplaces. Holidays are expensive. This implies that the decision to take a holiday may affect other members of the family, or colleagues in cases of where companies cater for such packages.

This calls for compromises at some points, especially with regard to a holiday destination. There may also be some pressing needs such as purchasing new items, car, improving a home. Thus, family members or colleagues may consider such an expensive holiday a waste of resources.

Consumers who wish to purchase hospitality products and services normally experience strong influences from other people such as family members, colleagues and reference groups. The study of behaviour patterns that are under influences from diverse aspects is extremely difficult. At the same time, such opinion leaders also have tendencies of changing their beliefs and opinions over time.

Most decisions consumers make about visits are long-term decisions that take a considerable amount of time to plan. The challenge is that people may be at different statuses of their minds when they plan their visits, and when they actually go for such visits.

Such decisions depend on aspects of the future that they might not be able to predict. The dynamic nature of the tourism industry may affect such decisions depending on the cost variations, climate changes and lately security.

Purchases made in the hospitality industry involve high levels of search for information. Factors such as emotions and individual preferences may determine the extent to which a consumer will seek for such information.

There is a wide consultation of different sources of information, and the final choice depends on such information gathered. There is a high level of complexity involved as people search for information and make decisions. It may also mean that decisions can change abruptly depending on the new information discovered.

The complex nature of making purchase decision-making processes in a hospitality industry is different from making purchases of other routinely used goods.

The intangible nature, uncertainty of the future and unpredictable of service standards make the process of purchasing services and products a complex experience for consumers. This implies that marketers in may have difficulties when promoting their services and products to such consumers.

The decision-making process in the hospitality industry

The decisions consumers make to buy products and services in the hospitality industry are due to complex processes involved. These factors relate to the consumer, and other external factors that he or she may not be able to control when making a decision of purchasing a service or product without prior experience.

In addition, the nature of products and services in the hospitality industry also make purchase decision-making process a complex affair. For instance, in choosing a holiday destination, consumers consider such factors as the destinations itself, mode of travel, type of accommodation services, the length of the holiday period, the time of the holiday, package of the holiday, and agent to provide tour services.

These are among many factors that may influence the decision-making process of a consumer when choosing a holiday package and subsequent purchase.

We can note that the scope and number of such factors are wide and numerous. We also realise that choosing the destination alone is not enough and not an end in itself. There are issues and activities to engage in once in a holiday destination.

Visitors will also make further decisions regarding how to spend their time, what meals to take, and where to take them among others. We can notice that these decisions look simple. However, they form part of the complex decision-making processes that tourists must critically look before making any purchases.

Decision-making models in hospitality

Cooper and associates provide three processes in the development of consumer behaviour with reference to purchase processes (Cooper et al, 2005). First, there was the early phase of 1930 and 1940s (early empiricist) where emphasis was on empirical research. Still, the industry tried to establish effects of advertising, product distribution, and promotion decisions.

Second, there was the motivational phase in the 1950s where attention focused on “focus groups, in-depth interviews and consumers’ perception studies, and other projective approaches” (Cooper et al., 2005).

The focus was on what factors motivate consumers to make their purchases. Third, there was the formative phase. This phase included published textbooks by consumer behaviour theorists such as Engel, Blackwell, Kollat, Howard and Sheth.

Most early approaches on the study of consumer behaviour “focused on manufacturing industries, and they later moved to general service industries” (Cooper et al, 2005). In the 1970s, scholars began creating purchase models in the area of tourism. These models presented linear representations of decision-making processes.

It was Moutinho who developed a tourist behaviour model that was different from the rest with two scopes (Moutinho, 1987). First, the model provided for three distinct stages in the consumer decision-making process. These were “pre-decision stage and decision process, post-purchase evaluation, and future decision-making” (Moutinho, 1987).

The model also provided opportunities for feedback mechanism. Second, the model recognised three behavioural aspects in making purchase decisions, such as motivation, cognition, and learning.

The Consumer Information Processing Model: Source: Adopted from Kotler (1997)

Post-purchase Evaluation

Post-purchase evaluation occurs as a result of purchase decision. In this context, the consumer considers the level of purchase involvement. As we have identified above, purchases in the area of hospitality are high levels involvement.

In other words, the level of concern for the purchase is high in the hospitality industry because such decisions are not habitual purchases. The process is a continuum where the flow is from low to high level (Solomon, 2006).

High level of involvement during purchase decision-making process will result into an extensive post-purchase evaluation. Consumers usually question if their decisions to make purchases were the best among other alternatives. This is what we call post-purchase cognitive dissonance.

Elaborate Post-purchase Evaluation: Source: Adopted from Hawkins, Best, and Coney (1983)

Consumers are likely to experience such dissonance if the purchase is irrevocable, involves a high level of commitment, individual factors, selection among alternatives, and the importance of the decision.

Post-purchase experience of dissonance makes the consumer feel uncomfortable. Consequently, they resort to a number of ways to reduce such feelings. These may include preferences for the choice, disregard other alternatives, avoid negative comments about the choice, and reduce the importance of purchase decision.

Consumers who fail to reduce the level of dissonance may experience dissatisfaction with their choices. In this process, the consumer is likely to identify new problems and engage in the process of satisfying the need created due to dissatisfaction by the initial purchase. Consumers will use their experiences and negative feeling like part of the new information in making the decision for the next purchase.

Analysis of the purchase decision models

There are inherent weaknesses that exist in consumer decision-making process models. These models do not explicitly show how consumers undergo complex processes when making decisions of purchasing services in the hospitality industry. These models cannot serve marketers when designing their marketing strategies.

Most critics argue that such models do not rely on any empirical research; thus, may not present reality of how consumers make their purchase decisions. In addition, most of these models are out-of-date in the postmodern hospitality industry, which is ever dynamic as consumers’ preferences are not static.

For instance, the tourism and hospitality industry has experienced changes with regard to the rapid changes in the Internet as a means of booking and purchasing hospitality packages and airline tickets, explosion of no-frills budget airlines, the development of all-encompassing holiday destinations, evolution of direct marketing, and changes in the buying behaviours of tourists that involve last-minute and spontaneous purchase decisions.

Third, a number of models that exist in the field of tourism, hospitality, and event management have their origins in North America, Northern Europe, and Australia. This implies that these models do not cater exhaustively cater for emerging markets in Eastern Europe, South America, Asian and African markets.

These models also tend to classify activities in the hospitality industry as homogeneous. However, consumers of such products are different and unique in their own ways.

Some of these factors that may influence characteristics of visitors may include their travelling patterns i.e. as an individual, family or group, past experiences of such tourists, and personal traits, which may involve planning patterns such as last-minute decisions or considerable amount of time for planning.

A number of models do not account for influences of motivators and determinants that affect consumers during decision-making processes. Some factors that influence consumers’ decision-making processes may dominate other factors and account for the entire decision-making process. However, such factors mainly depend on individuals’ preferences such as hobbies, means of travelling, or preferences for leisure activities, among others.

Other models take rational approaches to decision-making processes in purchases, which is not always the case. The ability to make rational decisions in purchasing among visitors depends on the availability of information.

In most cases, tourists may have access to imperfect information that does not give true accounts of their alternatives. In addition, rationality of the purchase decision-making process also depends on an individual’s factors such as personal opinions and prejudice.

These models assume that consumers’ activities and purchase patterns are constant. They fail to account for emerging trends such as conference tourism, holiday destinations, holiday patterns, effects of globalisation and instant decision-making process among some visitors. Such factors influence the nature of the decision and purchase patterns among consumers.

Postmodern consumers of hospitality industry

Studies show that purchases and consumption in the hospitality industry have become fragmented. The perceived social roles have experienced “breakdown and left majority to adopt any identity they want in a postmodern society” (Thomas, 1997).

In the field of hospitality, the postmodern consumption rotates around “changes in consumer cultures of the late capitalism and the emergence of communication technology” (Brown, 1995). These changes have affected marketing trends in hospitality services (Williams, 2002). Thomas notes postmodernism has significantly influenced marketing.

Thus, he elaborates “Marketing, real-time, real-world marketing is thoroughly postmodern because postmodern marketing openly challenges some of the major axioms of the conventional wisdom as reflected in the standard marketing textbooks” (Thomas, 1997).

Thomas lists axioms that relate to postmodern as “consumer needs, consumer sovereignty, behavioural consistency, customer orientation perceived value, product image, buyer and seller separation, individual and organisation distinction, product and process separation, and consumption and production division” (Thomas, 1997).

We can relate these elements to consumption in the hospitality industry and establish consumerism in postmodern.

According to postmodernism, there is no single privileged form of knowledge, i.e. no theories are superior or inferior to others. Thus, it is no longer possible to believe in a generalisation or meta-discourse. A better understanding of postmodernism should entail sensitivity to differences, fragmented individuality, embrace uncertainty, and discourage the use of consensus to suppress heterogeneity.

In the field of hospitality consumption, we must embrace parallel and emerging trends in the social world. This refers to both self and other spheres of life. Postmodernism recognises that there is a lack of unity, lack of unifying central ideas, order, and lack of coherence.

Lack of certainty applies to an individual as well as the whole system. Therefore, the fragmented nature of consumer decision-making process models results from the fact that postmodernism does not recognise coherent and unified approach to issues as there is also general lack of certainty.

There is also breakdown in the system that leads to distinctions and differences. In turn, we have fragmentation in processes that replace unity or totality. Changes in society will allow for conditions of postmodernism characterised by hyperreality, ambiguity and reproduction of features (Gabriel and Lang, 1995).

Thus, postmodernism does not support any suggestions to replace or impose order to the existing chaotic and fragmented reality. Postmodernism puts it that we should embrace the “limitations of knowledge, question the value of generalisations and accept the impossibility of universal truths” (Thomas, 1997).

Fragmentation also emerges due to a low level of commitment to any one brand. What exists is only a momentary attachment, brand repositioning, and regeneration.

Thus, if we apply the principle of none is superior or inferior to another, then marketing becomes only sensible when it recognises language, symbols and elements of communication that imply and signify essential images in marketing. In the hospitality, the breakdown in the system affects marketing in the hospitality industry, which relates to the universal principle of marketing (Williams, 2002).

Postmodernism tends to question ideas behind generalisations and concepts in overarching theories as it sees them as limited in scopes. Thus, it posits that marketing approaches tend to impose order on the chaotic and fragmented statuses of the modern hospitality industry.

Postmodernism argues that there that the knowledge that exists has limitations about the nature of fragmentation. There is little empirical evidence to support generalisations regarding consumers’ consumption and behaviour patterns.

In addition, consumers’ consumption trends are not orderly and unpredictable. Consumers act on their wishes, ignore the set standards, and fail to maintain systems that may guide their activities (Brown, 1995). Thus, consumers are unreliable and changeable. Dynamic characteristics of modern consumers in the hospitality industry present difficulties in predicting buying behaviours and decision-making processes.

Conclusions

This research has looked at the purchase and post-purchase models in consumption of hospitality services. Academicians and market theorists have made their inputs in order to provide theoretical account of the processes.

However, these models offered by theorists have inherent weaknesses both in describing and explaining how consumers make their purchase decisions. Some of these weaknesses result from elaborate decision-making patterns involved in choosing a holiday destination and subsequent activities.

The consumer decision-making process in purchasing hospitality services is a complex affair. It depends on a number of factors that originate from an individual and other external factors.

However, the models present linear processes that do not account for the complex nature and a high level of decision-making process consumers undergo when choosing a holiday destination. Despite these theories and models, understanding consumer behaviour in consumption of hospitality services remains complex.

The post-purchase evaluation occurs as a result of the decision to purchase. It is also a high-level involvement process due to the nature of the decision and purchase involved. Consumers will experience post-purchase cognitive dissonance due to their purchases. However, in most cases, they tend to find ways of reducing negative feeling about their purchases.

With reference to postmodernism, consumption of hospitality services remain unpredictable, fragmented and not attached to reality. Postmodernism believes that consumers of today live in a world of doubt, ambiguity, and uncertainty. Thus, applying a model to explain their decision-making processes involving a purchase remains difficult to limitation of knowledge.

To this end, we cannot apply generalisations to account for behaviours of consumers in the hospitality industry. Still, marketing remains a complex process as predicting purchasing patterns and consumptions among customers are also difficult.

Most consumers will base their purchase decisions on their wishes, make last-minute decisions, and create new trends in demand for services and products. Such are the difficulties that make these theories fragmented and all-encompassing.

Reference List

Blackwell, R, Engel, J and Miniard, P 2001, Consumer Behaviour, 9th edn, Harcourt Education, Boston, MA.

Brown, S 1995, Postmodern Marketing, Routledge, London.

Chambers, R and Lewis, R 2000, Marketing leadership in hospitality: foundations & practices, 3rd edn, John Wiley & Sons, New York.

Cooper, C, Wanhill, S, Fletcher, J, Gilbert, D, & Fyall, A. 2005. Tourism: Principles and Practice, Pearson, New York.

Foxall, G 2004, Consumer Behaviour Analysis V1, Routledge, New York.

Gabbott, M and Hogg, G 1998, Consumers and Services, Wiley, New York.

Gabriel, Y and Lang, T 1995, The Unmanageable Consumer, Sage, London.

Howard, J and Sheth, J 1996, The Theory of Buyer Behaviour, John Wiley, New York.

Kotler, P, Bowen, J and Makens, J 1999, Marketing for Hospitality and Tourism, Prentice-Hall, New York.

Middleton, V and Clarke, J 2001, Marketing in Travel and Tourism, Butterworth-Heinemann, London.

Moutinho, L 1987, ‘Consumer Behavior in Tourism’, European Journal of Marketing, vol. 21, no. 10, pp. 3-44.

Onkvisit, S and Shaw J 1994, Consumer Behavior: Strategy and Analysis, Macmillan College Pub-lishing Company Inc, New York.

Solomon, M 2006, Consumer Behavior, Prentice Hall Europe, New Jersey.

Thomas, M 1997, ‘Consumer market research: does it have validity? Some postmodern thoughts’, Marketing Intelligence & Planning, vol. 15, no. 2, pp. 54–59.

Williams, A 2002, Understanding the Hospitality Consumer- Hospitality, Leisure and Tourism, Butterworth-Heinemann Ltd, London.

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Consumer Behavior

Advertising, Consumerism, Materialism, Marketing

Reviewed by Psychology Today Staff

Consumer behavior—or how people buy and use goods and services—is a rich field of psychological research, particularly for companies trying to sell products to as many potential customers as possible. Since what people buy—and why they buy it—impacts many different facets of their lives, research into consumer behavior ties together several key psychological issues. These include communication (How do different people respond to advertising and marketing?), identity (Do our purchases reveal our personality ?), social status, decision-making , and mental and physical health.

• Why Consumer Behavior Matters
• The Psychology of Buying and Spending
• How Advertising and Marketing Work
• How to Appeal to Consumers

Corporations, political campaigns, and nonprofit organizations all consult findings about consumer behavior to determine how best to market products, candidates, or issues. In some cases, they accomplish this by manipulating people's fears, their least-healthy habits, or their worst tendencies. And consumers themselves can be their own worst enemy, making rash purchasing decisions based on anxiety , faulty logic, or a fleeting desire for social status. But consumers aren’t powerless: Learning more about the different strategies companies employ, as well as the explanations for people's often confusing purchasing decisions, can help individuals more consciously decide what, why, and whether to buy.

In developed countries, people spend only a portion of their money on things they need to survive, and the rest on non-essentials. Purchasing decisions based on want, rather than need, aren’t always rational ; instead, they are influenced by personality , emotion , and trends. To keep up, marketers continuously investigate how individuals and groups make buying choices and respond to marketing techniques.

Political marketing is, in many ways, similar to product marketing: it plays on emotions and people’s desire for compelling stories , rather than pure rationality, and aims to condense complex issues into short, memorable soundbites. Smart politicians use marketing research to tailor their messages, connect with voters who share their values, and counter their opponents’ narrative.

Humans are social animals. We rely on a group to survive and are evolutionarily driven to follow the crowd . To learn what is “correct,” we look to other people—a heuristic known as the principle of social proof . Fads are born because a product’s popularity is assumed to signal value, which further bolsters its popularity.

Natural or man-made disasters can trigger panic buying or hoarding behaviors, either before the disaster or after it has passed, usually of products deemed necessary for survival. In the weeks and months after a disaster, some evidence suggests that “hedonic purchases”—such as alcohol or unhealthy foods —rise as victims of the disaster attempt to cope.

After large-scale recessions, such as the Great Recession of 2007 to 2009, consumers typically become more frugal and sensitive to price. These changes become permanent for some consumers, especially for those who were particularly hard-hit; for others, behaviors revert back to baseline once the economy has stabilized and any personal financial challenges have been overcome.

It already has. Consumers are buying less , shifting more purchasing online, and spending less on travel and in-person events. Whether those changes will endure, though, is unclear. Some experts predict that most people will revert back to old habits post-COVID; a small few, it’s predicted, will become more frugal and less materialistic in the long term.

Much of what people purchase—like food, shelter, or medical care—is necessary for their health and security. But what compels someone to buy things that aren’t necessary, like the latest iPhone or an impractical pair of high-heeled shoes? The study of why people make such purchases—which are often irrational—is closely related to the field of behavioral economics , which examines why people deviate from the most rational choice available.

Behavioral economists, marketing professionals, and psychologists have concluded that extraneous purchases may be driven by a need to display one’s social status, or in response to an emotion like sadness or boredom . In other instances, retailers may successfully manipulate the desire for a “good deal” by making an unneeded item seem especially affordable or portraying it as being in limited supply.

Learning how to recognize common manipulation tactics may help individuals and families save money—and stress —in the long term.

Many human behaviors are driven by reward. Purchasing a new gadget or item of clothing triggers a surge of dopamine , which creates pleasurable feelings. Though the glow of a new purchase may not last long, the desire to once again be rewarded with a burst of dopamine drives us to buy more .

It depends. Some research suggests that experiential purchases like vacations bring more happiness than material goods, in both the short- and long-term . However, this rule may not apply universally. For lower-income people, spending on material goods that meet basic needs is often more conducive to happiness, especially if the items remain useful over time.

Consumers are often irrational. Instead of only buying things they need, they also buy unnecessary items—often because the purchase makes them feel good, soothes negative emotions, or boosts social status. A consumer may also buy something that has been framed by a marketer as especially attractive; “buy one get one free” offers, for instance, are hard to resist and encourage people to buy things they don’t need.

Certain buying impulses can ultimately be harmful , but they often serve a psychological purpose. Purchasing unhealthy foods or excessive alcohol, for instance, can temporarily offer comfort from painful emotions; buying a new pair of designer jeans might break the bank, but can also help the purchaser prominently display their social status.

Dissonant buying impulses—or purchases that conflict with one’s resources, needs, and goals —can be difficult to manage, especially when they’re driven by negative emotions. Learning emotional regulation skills —such as naming any negative feelings, redirecting attention to productive activities, or practicing mindfulness —or creating physical “barriers” (such as freezing credit cards so they can’t be used impulsively) can help.

Anxiety is known to spur impulsive purchases —in part because buying things offers a sense of control and can be used to self-soothe. Anxiety can also lead someone to prioritize products that promote safety or a sense of security—such as toilet paper, hand sanitizer, or canned goods.

In a word, panic. Anxiety and fear make the world appear frightening and senseless; stocking up on certain items like toilet paper is one way to restore a feeling of control. Panic buying is also driven in part by herd mentality; if people see that others are hoarding hand sanitizer, they assume they should too.

Impulse buying may be motivated by negative emotions, as purchasing something often temporarily boosts mood. It may also be driven by personality—the naturally more impulsive or less conscientious may be driven to more frequently purchase items on a whim. Marketing strategies, like advertising products as “limited time offers,” can increase the tendency to impulse buy.

Two vast, interrelated industries—advertising and marketing—are dedicated to introducing people to products and convincing them to make purchases.

Since the public’s desires tend to change over time, however, what works in one product’s campaign won’t necessarily work in another’s. To adapt messages for a fickle audience, advertisers employ focus groups, market research, and psychological studies to better understand what compels people to commit to purchases or become loyal to brands.

Everyone has heard the advertising maxim “sex sells,” for instance—but exactly what, when, and why sex can be used to successfully market a product is the subject of much debate among ad makers and behavioral researchers. Recently, some evidence has suggested that pitches to the perceived “lowest common denominator” may actually inspire consumer backlash.

Marketers regularly use psychology to convince consumers to buy. Some common strategies include classical conditioning —training consumers to associate a product with certain cues through repeated exposure—creating a scarcity mindset (suggesting that a product only exists in limited quantities), or employing the principle of social proof to imply that everyone is buying a product—so you should, too.

Marketers often exploit cognitive shortcuts , known as heuristics, to convince consumers to make purchases. One example of this is the anchoring bias , or the brain’s tendency to rely heavily on the first piece of information it learns. A savvy marketer may say, for instance, that a car costs $20,000, then quickly offer to take $1,000 off. Since the consumer “anchored” on to the initial $20,000 price tag, a $1,000 discount seems substantial and the consumer may leap at the offer. But if the car was truly worth $15,000, it would still be overpriced, even with the supposed discount factored in. 

Renowned marketing researcher Robert Cialdini found that advertisements are perceived very differently depending on consumers’ state of mind. Fearful consumers, for instance, are more likely to respond negatively to ads that promote standing out from the crowd. However, consumers in a positive state of mind respond well to ads encouraging uniqueness; thus, timing and context are often critical to an ad’s success.

Limited time offers trigger a sense of urgency and force consumers to make quick decisions. A product only being available “for a limited time” (either at all or at a lower price) creates a sense of scarcity. Scarcity—whether real or manufactured—increases a product’s perceived value, heightening the chance of an impulsive purchase.

Because the majority of humans desire and seek out sex, sexual stimuli naturally capture attention; thus, marketers often make use of attractive models or erotic imagery simply to make consumers take notice. Being “primed” with erotic content can change behavior, too; research has found that sexual priming can lead consumers to make riskier financial choices.

The effectiveness of sex in advertising likely depends on several factors, including gender and context. Women appear to respond more negatively to sexual ads than men, research finds. When the product is unrelated to sex, using erotic imagery in ads can trigger dissonance and trigger negative feelings about the brand.

In a crowded marketplace, anyone hoping to sell a product or service will need to stand out. To succeed at this, marketers often turn to psychological research to identify and target their most likely consumers, grab their attention, and convince them that a product will fill a specific need or otherwise better their life. Aiming to inform and persuade consumers—rather than manipulate them—is widely considered to be the most ethical approach, and is likely to help build brand loyalty more than cheap marketing tricks.

Both the message and the messenger matter for  persuasion . Marketing researcher Robert Cialdini has found that first impressions matter greatly—a company (or individual) that appears trustworthy and warm is more likely to gain their audience’s trust. Cialdini also coined the term  “pre-suasion”  to argue that marketers must grab consumers’ attention  before  making an appeal—by offering free samples, for instance, or couching a product pitch in an amusing commercial. 

Turning to psychology can help. Appealing to consumers’ emotions and desire for connection with others are often powerful marketing strategies, as long as they’re not interpreted by consumers as manipulative. Introducing novelty, too, can be effective—research shows that consumers respond to surprising ads, humorous ads, or even “experiential” ads (such as parties or events designed to promote a product). Repeating an ad enough times so that a consumer remembers it—but not so much that they become frustrated—is also a critical part of any effective ad campaign.

Humans are creatures of habit and slow to adapt to change. To spread a new message or idea,  advertisers  have learned that simplicity is key; overcomplicated appeals can be frustrating or confusing for consumers. Summarizing the benefits of a new product, service, or political campaign in pithy, memorable phrases or images—and then repeating the message as often as possible—is more likely to grab consumers' attention and convince them to take a chance on a new object or idea.

Customers trust businesses that are honest with them, sharing accurate information about everything from the benefits of using their products to how they run their business.  Other guidelines for ethical marketing  include clearly distinguishing ads from other types of content (news, entertainment, etc.), prioritizing the interests of children or other vulnerable groups (by not marketing unhealthy products to children, for example), avoiding negative stereotypes, and respecting consumers’  intelligence  and privacy.

In the last few decades, the biomedical research establishment has flipped from an academically-based enterprise to a commercial one that can stifle advancement.

Do you consider consumerism a good or bad thing? Chances are you may actually think of it as both.

Discover how presidential pets have shaped public perception and trust in leaders, revealing the deeper connection between compassion and effective governance.

Companies increasingly offer expedited services for a surcharge. The impatient among us might be tempted to use these offers, but should we?

Why do rising prices take a toll on your joy?

Patients' increasing reliance on online self-diagnosis is creating new challenges for doctors.

Ads leverage trust, relatability, and authority to persuade. Being aware of these tactics can help you make better decisions.

Pink cocaine, an unpredictable combination drug found in Liam Payne's autopsy, usually contains ketamine, ecstasy, and little or no cocaine, is gaining popularity among clubgoers.

Technology, with all of its pluses and minuses, has come to the worlds of coaching and therapy, and those two professions will never look quite the same.

If you want to know what someone is like, observe where they go.

• Find a Therapist
• Find a Treatment Center
• Find a Psychiatrist
• Find a Support Group
• Find Online Therapy
• United States
• Brooklyn, NY
• Chicago, IL
• Houston, TX
• Los Angeles, CA
• New York, NY
• Portland, OR
• San Diego, CA
• San Francisco, CA
• Seattle, WA
• Washington, DC
• Asperger's
• Bipolar Disorder
• Chronic Pain
• Eating Disorders
• Passive Aggression
• Personality
• Goal Setting
• Positive Psychology
• Stopping Smoking
• Low Sexual Desire
• Relationships
• Child Development
• Self Tests NEW
• Therapy Center
• Diagnosis Dictionary
• Types of Therapy

When we fall prey to perfectionism, we think we’re honorably aspiring to be our very best, but often we’re really just setting ourselves up for failure, as perfection is impossible and its pursuit inevitably backfires.

• Emotional Intelligence
• Gaslighting
• Affective Forecasting
• Neuroscience

What is Consumer Behaviour? Definition, Importance, Types, Stages

• Post last modified: 10 August 2023
• Reading time: 41 mins read
• Post category: Marketing Essentials / Consumer Behaviour / Marketing Management

• What is Consumer Behaviour?

Consumer behavior is the study of consumers’ action during searching for, purchasing, using, evaluating and disposing of products and services they expect will satisfy their need. It helps marketers in understanding consumer decision-making process.

Consumer behaviour can be defined as “activities people undertake when obtaining, consuming, and disposing of products and services” is provided and detailed.

• Obtaining “activities leading up to and including the purchase or receipt of a product”.
• Consuming “how, where, when, and under what circumstances consumers use products”.
• Disposing “how consumers get rid of products and packaging”.

Table of Content

• 1 What is Consumer Behaviour?
• 2 Consumer Behaviour Definition
• 3 Consumer Behaviour Meaning
• 4.1 Dissonance Reducing Buying Behaviour
• 4.2 Complex Buying Behaviour
• 4.3 Variety Seeking Buying Behaviour
• 4.4 Habitual buying Behaviour
• 5.1 Stage of Problem Recognition
• 5.2 Stage of Information Search
• 5.3 Stage of Alternative Evaluation
• 5.4 Stage of Purchase Decision
• 5.5 Stage of Post Purchase Behaviour
• 6.1 Initiator
• 6.2 Influencer
• 6.3 Gatekeeper
• 6.4 Decider
• 7 7 O’s Framework of Consumer Behaviour
• 8.1 Cultural Factors
• 8.2 Social Factors
• 8.3 Personal Factors
• 8.4 Psychological Factors
• 8.5 Economic Factors
• 9.1 Identifying market opportunity
• 9.2 Selecting target market
• 9.3 Customer retention
• 9.4 Dynamic nature of market
• 9.5 Marketing-mix decisions
• 9.6 Effective use of productive resources
• 9.7 Fulfil varied consumer preferences
• 9.8 Address custom needs
• 10.1 Analyzing market opportunity
• 10.2 Selecting target market
• 10.3 Marketing mix decisions
• 10.4 Use in Social and Non-profits Marketing
• 11 Consumer Behavior and Marketing
• 12 Marketing Management Topics

Consumer Behaviour Definition

Consumer behavior is the process whereby individuals decide what, when, where, how and from whom to purchase goods and services. Walters and Paul

Consumer behaviour as “The dynamic interaction of cognition, behaviour and environmental events by which human beings conduct the exchange aspect of their lives. American Marketing Association (AMA)

Consumer behaviour refers to the actions and decision processes of people who purchase goods and services for personal consumption. Peter D. Bennett, ed. Dictionary of Marketing Terms, 2nd ed. 1995

Consumer behaviour refers to “the mental and emotional processes and the observable behaviour of consumers during searching for, purchasing and post consumption of a product or service. James F. Engel, Roger D. Blackwell and Paul W. Miniard, “Consumer Behaviour” (1990)

Consumer Behaviour Meaning

The “ consumer ” more generally refers to anyone engaging in any of the activities (evaluating, acquiring, using or disposing of goods and services) used in the definition of consumer behaviour.

Consumer behaviour is a decision process and physical activity individuals engage in when evaluating, acquiring, using or disposing of goods and services.

Types of Buying Decision Behavior

Different consumers follow different steps in making their choice of products and services.

There is a substantial degree of variation in the choice processes depending upon two key factors, namely the level of involvement and degree of the perceived difference between different alternatives in the market.

There are basically 4 types of buying decision behavior which is discussed below:

Dissonance Reducing Buying Behaviour

Complex buying behaviour, variety seeking buying behaviour, habitual buying behaviour.

Customer involvement in the purchase activity is high and customers cannot find a substantial differentiation among the alternatives.

The consumer is highly involved and sees little difference among brand alternatives. The consumer is highly involved and sees little difference among brand alternatives.

Consumer is highly involved but he finds a substantial difference among the available brands.

In this case, the buyer develops beliefs about the product or service, then he develops a set of attitude towards the product and finally, he makes a deliberate choice. This is a case when products are expensive, bought infrequently, risky and highly self-expressive.

This kind of behaviour is shown in some situations where the consumer shows low involvement behaviour but there is a significant brand difference.

Consumers show a high level of brand switching behaviour.

This kind of behaviour is shown in some situations where the consumer shows low involvement behaviour but there is no/few significant brand difference.

Read: Market Segmentation

Consumer Buying Process

In consumer buying process , generally, the purchaser passes through five distinct stages in consumer buying process namely need or problem recognition, information search, alternative evaluation, purchase decision and post-purchase behaviour.

Stage of Problem Recognition

Stage of information search, stage of alternative evaluation, stage of purchase decision, stage of post purchase behaviour.

The recognition of a need is likely to occur when a consumer is faced with a ‘problem’. A buying process starts when a consumer recognises that there is a substantial discrepancy between his current state of satisfaction and expectations in a consumption situation.

After need arousal, the behaviour of the consumer leads towards a collection of available information about various stimuli i.e. products and services in this case from various sources (personal, public, commercial, experiential) for further processing and decision-making.

Once interest in a product(s) is aroused, a consumer enters the subsequent stage of evaluation of alternatives.

When evaluating potential alternatives, consumers tend to use two types of information:

• a list of brands (or models) from which they plan to make their selection (the evoked set)
• the criteria they will use to evaluate each brand (or model).

Cognitive evaluation : When the consumer uses objective choice criteria. Affective evaluation : Using emotional reasons for evaluating the alternatives.

Finally, the consumer arrives at a purchase decision. Purchase decisions can be one of the three viz. no buying, buying later and buy now.

No buying takes the consumer to the problem recognition stage. A postponement of buying can be due to a lesser motivation or evolving personal and economic situation. If positive attitudes are formed towards the decided alternative, the consumer will make a purchase.

There are three more important considerations in taking the buying decision:

• Attitude of others such as wife, relatives and friends.
• Anticipated situational factors such as expected family income, expected total cost of the product and the expected benefits from the product.
• Unanticipated situational factors, like accidents, illness etc.

Post-purchase behaviour refers to the behaviour of a consumer after his commitment to a product has been made.

So post-purchase behaviour leads to three situations, namely customer is satisfied; customer is delighted and the customer is dissatisfied.

Cognitive dissonance: Buyer discomfort caused by postpurchase conflict.

Participant in Buying Process

Consumer behaviour is influenced not only by consumer personali- ties and motivations, but also by the various participant in the buying process. Consumer decision making is an intricate process.

To understand how consumers actually take the decision to buy a product, it is important for marketers to identify who makes and has input in the decision-making process. In a buying process there are various participants involved, their roles are explained as follows:

Initiator is the individual who determines that some need or want is not being fulfilled and hence initiates a purchase. An initiator is a person who first identifies an existing problem or need that can be resolved by making a purchase.

For example, in case of a family, a housewife can be the initiator. As housewife knows what is required in the home.

Influencer is a person who influences the buying decision, actual purchase or the use of product or service. Influencer can be a technical expert, consultant or anyone who provides input for the buying decision. For example, a salesperson might influence you to buy a product.

A gatekeeper is the one who Influences the processing of information. The gatekeeper may possess a greater expertise in acquiring and evaluating the information.

For example, in a family a homemaker may be the gatekeeper who will disseminate information.

A decider may not have the formal authority to decide upon a purchase decision, but has sufficient weight in the buying decision process of products or services. A decider is the one who vets what to buy, how to buy, when to buy and from where to buy.

For example, in family generally it is the male head of the family who gives assent to buy.

A buyer is the one who is involved in the physical activity of making a purchase and conducts the final transaction or exchange. At the time of purchasing the buyer can negotiate on the price.

For example, housewife may be the buyer who actually buys all the foodstuffs, rations and toiletries of the family.

They are the ones who are reaping the benefit of the product/service acquired. For instance, the family members who use or consume a particular product or service.

7 O’s Framework of Consumer Behaviour

A framework is developed to understand consumer behaviour by addressing various issues involved in consumer behaviour. This framework is popularly known as 7 O’s Framework and is used for a basic understanding of consumer behaviour

• Occupants: Who is the Consumer
• Object of Purchase: What does the Consumer Buy
• Objective: Why is the Consumer Buying
• Occasion: When do they Buy or How Often do they Buy and Use
• Outlets: Where do they Buy
• Operations: How do they Buy
• Organisation: Who is Involved

Factors Influencing Consumer Behaviour

The consumer decision process explains the internal process as well as individual behaviour for making product or service decisions.

Cultural Factors

Social factors, personal factors, psychological factors, economic factors.

Culture: The set of basic values, perceptions, wants, and behaviours learned by a member of society from family and other important institutions.

Consumers live in a complex social and cultural environment. The types of products and services they buy can be influenced by the overall cultural context in which they grow up to become individuals.

Below are some of the important cultural factors given:

• Social Class

Social factors, in turn, reflect a constant and dynamic influx through which individuals learn different consumption meanings. Below are some of the important social factors given:

• Reference Groups
• Roles and status

A person’s consumption behaviour is shaped by his personal characteristics. Below are some of the important personal Factors given:

• Personality
• Self-concept

Psychological factors also influenced consumers. Internal psychological factors also direct the decision-making process. These factors influence the reason or ‘why’ of buying.

Below are some of the important psychological factors given:

• Attitudes and Beliefs

Economic factor also has a significant influence on buying decision of consumer behavior. Below are some of the important economic factors given:

• Personal and Family Income
• Income Expectations
• Consumer Credit
• Liquid Assets

Read: Business Buyer Behaviour

Importance of Consumer Behaviour

It is important for marketers to study consumer behaviour. This helps marketers to investigate and understand the way in which consumers behave.

Below are some of the importance of consumer behaviour is given below:

Identifying market opportunity

The study of consumer behaviour helps in identifying the unmet needs and wants of consumers. This demands evaluating the prevailing trends in the marketplace, consumers’ lifestyles, income levels and emerging influences.

Selecting target market

A review of market opportunities often helps in identifying distinct consumer segments with very distinct wants and need. Identifying these groups, learning how they behave and how they form purchase decisions enables the marketer to design and market products /services particularly suited to consumers wants and needs.

For example, an FMCG company conducted a consumer behaviour study and found out that many existing and potential shampoo users preferred buying low-priced sachets containing enough quantity for one or two washes rather than big bottles of hair shampoo. Based on the research the company introduced shampoo sachets to gain foothold in market.

Customer retention

Organisations lay emphasis on retaining customers than merely on customer acquisition. Customer retention is the process of maintaining existing customers by catering to their needs and even exceeding their expectations. Study of consumer behaviour helps to convert a casual customer into a committed loyal customer.

Dynamic nature of market

Consumer behaviour lays emphasis on dynamic nature of the market. It helps the manager to be dynamic and proactive in satisfying consumers ahead of its competitors. If the organisation is not able to keep up with the current market trends it will find it arduous to survive in the industry.

Marketing-mix decisions

Once unsatisfied needs and wants are identified, the organisation has to evaluate the right mix of product, price, distribution and promotion. In this context, consumer behaviour study is pivotal to resolve many challenging questions.

Effective use of productive resources

The study of consumer behaviour assists the manager to make the organisational efforts consumer-oriented. It ensures optimum utilisation of resources for achieving maximum efficiency.

Fulfil varied consumer preferences

With the onset of globalisation customers have wide range of alternatives in contrast to pre 1991 era. So, in order to cater to diverse customer preferences, it is pertinent for marketers to study customer behaviour.

For example, in the current scenario customers have various car manufacturers to choose from such as Hyundai, Honda, Mercedes, BMW etc. Every automobile maker leverages a certain segment of customers.

Address custom needs

Consumer opt for differentiated products that depict their special needs, personalities and lifestyles. The study of consumer behaviour enables organisations to gratify the peculiar needs.

For example, when Onida 21 was first introduced, it was advertised on television ‘for the elite class’. Likewise, Maggi introduced its tomato sauce with emphasis on “It’s different”.

Application of Consumer Behaviour in Marketing

Application of consumer behaviour in marketing are:

Analyzing market opportunity

Marketing mix decisions, use in social and non-profits marketing.

Consumer behaviour study helps in identifying the unfulfilled needs and wants of consumers. This requires examining the trends and conditions operating in the marketplace, consumers’ lifestyles and income levels. This may reveal some of the unsatisfied needs and wants of the consumers.

The trend towards increasing number of dual income household and greater emphasis on convenience and leisure have led to emerging needs for household gadgets such as washing machine,mixer grinder, vacuum cleaner and childcare centres etc.

A review of market opportunities often helps in identifying distinct consumer segments with distinct and unique wants and needs. Identifying these groups, learning how they behave and how theymake purchase decision enables the marketer to design and market products or services particularly suited to their wants and needs.

For example, consumer studies have revealed that many existing and potential shampoo users did not want to buy bigger shampoo packs and would rather prefer a low-priced sachet containing enough quantity for one or two washes. This finding led companies to introduce the shampoo sachet, which became good seller.

Once unsatisfied needs and wants are identified, themarketer has to determine the right mix of product, price, distribution and promotion. Here too consumer behaviour study is very helpful in finding answers to many perplexing questions. The answers to these questions are obtained by consumer behaviour research.

Consumer behaviour studies are useful to design marketing strategies by social, governmental and not-for-profit organisations to make their programmesmore effective such as family planning, pulse polio, safe driving etc.

Consumer Behavior and Marketing

Following changes can be observed in the approach of marketers towards consumers. Marketing oriented firms are focusing on customer satisfaction and retention.

• Shifting from supply to demand : This shows the change in focus from the supply products to creatind demand for the product. Producer determine what consumer will purchase before making changes and/or adding a product from its offerings.
• From manufacturing to selling : It shows the change in focus from “how to manufacture goods” to “how to sell” goods. It becomes practical in nature when production increased more quickly than products were purchased.
• From selling to marketing : It shows the change in focus from “selling products” to the “marketing of products”. It discusses the change from a position of scarcity following World War II to a change by the 1950s causing the marketing era when selling to consumers became vital to the company. The point is made that Wal-Mart is in the business of “buying what people need to consume”, not in selling things.

Marketing Management Topics

• Market Segmentation
• Marketing Mix
• Marketing Concept
• Marketing Management Process
• Marketing Environment

Consumer Behaviour

• Business Buyer Behaviour
• Segmentation, Targeting and Positioning

Marketing Management

• Advertising
• Marketing Planning
• Public Relations
• Sales Promotion
• Types of Sales Promotion
• Techniques of Sales Promotion
• New Product Development Process
• What is Pricing
• Methods of Pricing & Strategies
• Market Entry Strategy
• Demand Forecasting
• Brand Building Process
• Agricultural Cooperative Marketing
• Classification of Products
• Types of Logistics
• Marketing Control
• Models of Communication
• Consumer Research

DAGMAR Approach

• Consumer Behaviour Models
• Personal Selling
• Green Marketing
• Customer Relationship Management
• Electronic commerce
• Kotler Product Level
• Marketing Communication

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( Click on Topic to Read )

• What Is Market Segmentation?
• What Is Marketing Mix?
• What Is Marketing Environment?
• What Is Consumer Behaviour?
• 7 Stages Of New Product Development
• Methods Of Pricing
• What Is Public Relations?
• What Is Marketing Management?
• What Is Sales Promotion?
• Types Of Sales Promotion
• Techniques Of Sales Promotion
• What Is Personal Selling?
• What Is Advertising?
• What Is Marketing Planning?
• Segmentation Targeting And Positioning
• Kotler Five Product Level Model
• Classification Of Products
• Types Of Logistics
• What Is Consumer Research?
• What Is DAGMAR?
• What Is Green Marketing?
• What Is Electronic Commerce?
• What Is Marketing Control?
• What Is Marketing Communication?
• What Is Pricing?
• Models Of Communication

Sales Management

• What is Sales Management?
• Objectives of Sales Management
• Responsibilities and Skills of Sales Manager
• Theories of Personal Selling
• What is Sales Forecasting?
• Methods of Sales Forecasting
• Purpose of Sales Budgeting
• Methods of Sales Budgeting
• Types of Sales Budgeting
• Sales Budgeting Process
• What is Sales Quotas?
• What is Selling by Objectives (SBO) ?
• What is Sales Organisation?
• Types of Sales Force Structure
• Recruiting and Selecting Sales Personnel
• Training and Development of Salesforce
• Compensating the Sales Force
• Time and Territory Management
• What Is Logistics?
• What Is Logistics System?
• Technologies in Logistics
• What Is Distribution Management?
• What Is Marketing Intermediaries?
• Conventional Distribution System
• Functions of Distribution Channels
• What is Channel Design?
• Types of Wholesalers and Retailers
• What is Vertical Marketing Systems?

Marketing Essentials

• What i s Marketing?
• What i s A BCG Matrix?
• 5 M'S Of Advertising
• What i s Direct Marketing?
• Marketing Mix For Services
• What Market Intelligence System?
• What i s Trade Union?
• What Is International Marketing?
• World Trade Organization (WTO)
• What i s International Marketing Research?
• What is Exporting?
• What is Licensing?
• What is Franchising?
• What is Joint Venture?
• What is Turnkey Projects?
• What is Management Contracts?
• What is Foreign Direct Investment?
• Factors That Influence Entry Mode Choice In Foreign Markets
• What is Price Escalations?
• What is Transfer Pricing?
• Integrated Marketing Communication (IMC)
• What is Promotion Mix?
• Factors Affecting Promotion Mix
• Functions & Role Of Advertising
• What is Database Marketing?
• What is Advertising Budget?
• What is Advertising Agency?
• What is Market Intelligence?
• What is Industrial Marketing?
• What is Customer Value
• What Is Personality?
• What Is Perception?
• What Is Learning?
• What Is Attitude?
• What Is Motivation?
• Consumer Imagery
• Consumer Attitude Formation
• What Is Culture?
• Consumer Decision Making Process
• Applications of Consumer Behaviour in Marketing
• Motivational Research
• Theoretical Approaches to Study of Consumer Behaviour
• Consumer Involvement
• Consumer Lifestyle
• Theories of Personality
• Outlet Selection
• Organizational Buying Behaviour
• Consumer Protection Act, 1986
• Diffusion of Innovation
• Opinion Leaders

Business Communication

• What is Business Communication?
• What is Communication?
• Types of Communication
• 7 C of Communication
• Barriers To Business Communication
• Oral Communication
• Types Of Non Verbal Communication
• What is Written Communication?
• What are Soft Skills?
• Interpersonal vs Intrapersonal communication
• Barriers to Communication
• Importance of Communication Skills
• Listening in Communication
• Causes of Miscommunication
• What is Johari Window?
• What is Presentation?
• Communication Styles
• Channels of Communication
• Hofstede’s Dimensions of Cultural Differences and Benett’s Stages of Intercultural Sensitivity
• Organisational Communication
• Horizontal C ommunication
• Grapevine Communication
• Downward Communication
• Verbal Communication Skills
• Upward Communication
• Flow of Communication
• What is Emotional Intelligence?
• What is Public Speaking?
• Upward vs Downward Communication
• Internal vs External Communication
• What is Group Discussion?
• What is Interview?
• What is Negotiation?
• What is Digital Communication?
• What is Letter Writing?
• Resume and Covering Letter
• What is Report Writing?
• What is Business Meeting?
• What is Public Relations?

Business Law

• What is Business Law?
• Indian Contract Act 1872
• Essential Elements of a Valid Contract
• Types of Contract
• What is Discharge of Contract?
• Performance of Contract
• Sales of Goods Act 1930
• Goods & Price: Contract of Sale
• Conditions and Warranties
• Doctrine of Caveat Emptor
• Transfer of Property
• Rights of Unpaid Seller
• Negotiable Instruments Act 1881
• Types of Negotiable Instruments
• Types of Endorsement
• What is Promissory Note?
• What is Cheque?
• What is Crossing of Cheque?
• What is Bill of Exchange?
• What is Offer?
• Limited Liability Partnership Act 2008
• Memorandum of Association
• Articles of Association
• What is Director?
• Trade Unions Act, 1926
• Industrial Disputes Act 1947
• Employee State Insurance Act 1948
• Payment of Wages Act 1936
• Payment of Bonus Act 1965
• Labour Law in India

Brand Management

• What is Brand Management?
• 4 Steps of Strategic Brand Management Process
• Customer Based Brand Equity
• What is Brand Equity?

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Very interesting book I like it a very day to read because I am doing business administration

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