Title: CONSUMER BEHAVIOUR
Program: BUSINESS AND ECONOMICS
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People have two types of knowledge structures: schemas and scripts. Each is an associated network of linked meanings. Schemas contain mostly episodic and semantic general knowledge, whereas scripts are organized networks of procedural knowledge. However, both schemas and scripts can be activated in decision-making situations, and they can influence cognitive processes. Marketers should seek to understand consumers’ schemas about brands, stores, and product categories.
General knowledge is stored in memory as links or connections between two concepts which are taking and sending digital pictures, and even surfing the Internet. Obviously, they have acquired the general and procedural knowledge that enables them to accomplish these complex cognitive tasks and behaviours with relative ease. Consumers’ general and procedural knowledge is organized to form structures of knowledge in memory. Our cognitive systems create associative networks that organize and link many types of knowledge together.
Part of marketing strategy is to ascertain how consumers gain knowledge and use information from external sources. The perception process is where individuals receive, organize and interpret information in order to attribute some meaning and it involves three distinct processes which include sensing information, selecting information and interpreting information. Sensation is also part of the perception process, and it is linked direct with responses from the senses creating some reaction towards the brand name, advertising and packaging. The process of perception is uniquely individual and may depend on a combination of internal and external factors such as experiences, expectations, needs and the momentary set.
The human cognitive system can interpret virtually any type of information and thereby create knowledge, meanings, and beliefs. Broadly speaking, people have two types of knowledge:
- General knowledge about their environment and behaviours.
- Procedural knowledge about how to do things.
General knowledge concerns people’s interpretations of relevant information in their environments. Interpreting information about products and services can result in three types or levels of cognitive learning: accretion, tuning, and restructuring. Marketers then develop strategies to influence each type of cognitive learning using these levels as follows; - Accretion. Most cognitive learning probably occurs by accretion . As consumers interpret information about products and services, they add new knowledge, meanings, and beliefs to their existing knowledge structures.
- Tuning which happens consumers gain experience with a product, knowledge structures tend to become larger and more complex through accretion processes. At some point, consumers may adjust their knowledge structures to make them more accurate and more generalizable. Most knowledge structures undergo minor changes in meaning as consumers continue to process information from the environment.
- Restructuring which involves the revision of the entire associative network of knowledge, which might include creation of entirely new meaning structures and/or reorganization of an old knowledge structure. Accretion, and sometimes tuning, can occur without much cognitive effort or awareness which is essentially unconsciously and automatic. In contrast, restructuring usually involves extensive cognitive effort and substantial thinking and reasoning processes.
According to Loudon (2002), consumer behaviour can be defined as the process adopted by the consumer for making decisions followed by the physical activity of acquiring the product or service, evaluating it, using it and finally disposing them off. As further explained by Loudon (2002), Consumer behaviour is not just about the process of buying goods and services that grab’s the attention of the consumer rather it starts even before the consumer acquires it. The consumer buying process starts in the minds of the consumer that leads to the process of finding alternatives between the product wanted and its preferred alternative that fulfils the advantages, disadvantages and requirements of the user.
This is followed by an internal and external research that leads to the process of decision making about purchasing the product and its usage. After the purchase and usage of products and services comes the post purchase behaviour. Like selling of product, it is essential for the companies to monitor the post purchase behaviour of the consumers. This gives the marketers a better opinion on the success and failure of their product.
Today many of the most successful companies in the world have become so by designing the entire organization to serve consumers and stay close to them. These companies are committed to developing quality products and services and selling them at a price that gives consumers high value. In these companies, the marketing department, as well as design, engineering, production, human resources, finance, and other departments, focus on doing their jobs in ways that enhance the value of products to consumers. Some firms have found they can actually increase product quality and reduce costs at the same time, and they encourage employees throughout the company to seek ways to do so.
Other firms first determine what consumers want and how much they are willing to pay for a product and then design, produce, and market the best-quality product they can for the price consumers are willing to pay. Of course, organizations develop strategies at many levels, from planning the future of large, multinational, multi business corporations. Although consumer behaviour research is useful for all levels of strategic analysis, it is most commonly studied and applied at the brand and store levels.
The consumer behaviour is a complex yet dynamic and multidimensional process where all the decisions are undertaken on the basis of the behaviour of the consumers. For the companies to formulate any plans and strategies or achieve any desired goals and objectives, it is essential for them to stick to the marketing strategy and follow them as planned. These marketing strategies include ways of selling product effectively and cost-benefit analysis.
Furthermore, Peter (2005), mentions that consumer behaviour also illustrates the logics and the argumentations behind the purchasing behaviour and consumption patterns of the consumers and the process through which the buyers make their decisions. The study further includes the interaction between the cognizance, impinge and the behaviour that happens within a consumer during the process of consumption of goods and services in the selection of goods, using them and disposing them off.
Consumers’ knowledge can be classified into two types of product consequences: functional and psychosocial. Functional consequences are tangible outcomes of using a product that consumers experience rather directly. Psychosocial consequences refer to the psychological and social outcomes of product use which are internal personal outcomes that include how the product makes one feel. Most psychosocial consequences have an affective quality. Activation of product knowledge has many implications for marketing. For instance, the choice of a brand name is highly important to the success of the product because of the various meanings the brand name can activate from consumers’ memories.
Consumer affect and cognition refer to two types of mental responses consumers’ exhibit toward stimuli and events in their environment.
Affect refers to their feelings about stimuli and events, such as whether they like or dislike a product. Cognition refers to their thinking, such as their beliefs about a particular product. Affective responses can be favourable or unfavourable and vary in intensity.
For instance, affect includes relatively intense emotions such as love or anger, less strong feeling states such as satisfaction or frustration, moods such as boredom or relaxation, and milder overall attitudes.
Consumer behaviour is a study which involves interactions among people’s thinking, feelings, and actions, and the environment makes marketers to understand what products and brands mean to consumers, what consumers must do to purchase and use them, and what influences shopping, purchase, and consumption. The more marketers know about how these interactions influence individual consumers, target markets of similar consumers, and society at large, the better they can satisfy consumer needs and wants and create value for them.
Understanding purchasing and consumption behaviour is a key challenge for marketers. Consumer behaviour, in its broadest sense, is concerned with understanding both how purchase decisions are made and how products or services are consumed or experienced. Consumers are active decision-makers. They decide what to purchase, often based on their disposable income or budget. They may change their preferences related to their budget and a range of other factors.
With the wide products and services at their disposal to choose from, consumers can then think about the positive and negative consequences of product use as possible benefits or potential risks. Benefits are the desirable consequences consumers seek when buying and using products and brands. Consumers can have both cognitive knowledge about benefits and affective responses to those benefits. Cognitive knowledge includes links from the product to desired functional and psychosocial consequences Affective reactions to benefits include positive feelings associated with the desired consequence.
They often think about products and brands as bundles of benefits rather than bundles of attributes. Therefore, marketers can divide consumers into subgroups or market segments according to their desires for certain product consequences, a process called benefit segmentation. Perceived risks concern the undesirable consequences that consumers want to avoid when they buy and use products. A variety of negative consequences might occur. Some consumers worry about the physical risks of product consumption.
Some purchase decisions are made by groups such as families, households or businesses while others are made by individuals. When a purchase decision is made by a small group, such as a household, different members of the group may become involved at different stages of the decision process and may perform different roles. For example, one person may suggest the purchase category, another may search for product-related information while yet another may physically go to the store, buy the product and transport it home. It is customary to think about the types of decision roles; such as:
In a family unit, the adult female often makes brand choices on behalf of the entire household, while children can be important influencers. This involves such concepts as;
- The Initiator being the person who proposes a brand (or product) for consideration something in return.
- The Influencer. Which describes someone who recommends a given brand to someone.
- The Decider who is the person who makes the ultimate purchase decision;
- The Purchaser the one who orders or physically buys it;
- The User is a description of the person who uses or consumes the product.
For most purchase decisions, each of the decision roles must be performed, though not always by the same individual. According to Schiffman (2004), consumer behaviour focuses more on the user than the buyer, while paying attention to other aspects as well. Further, buyers and sellers are the two main and most crucial elements in consumer behaviour. They have varied needs and wants and in order to fulfil them, they go through a complex process of buying and purchasing goods and services and often get into the process of trading with the seller that leaves both the buyers and sellers satisfied.
To understand the mental processes used in purchasing decisions, some authors employ the concept of the black ‘box’ which is a figurative term used to describe the cognitive and affective processes used by a consumer during a purchase decision. The decision model situates the black box in a broader environment which shows the interaction of external and internal stimuli such as consumer characteristics, situational factors, marketing influences and environmental factors as well as consumer responses. A consumer's buying behaviour is influenced by four major factors; cultural, social, personal and psychological factors.
These factors cause consumers to develop product and brand preferences. Although many of these factors cannot be directly controlled by marketers, understanding of their impact is essential as marketing mix strategies can be developed to appeal to the preferences of the target market. When purchasing any product, a consumer goes through a decision process. This process consists of up to five stages; problem recognition, information search, evaluation of alternatives, purchase decision and post purchase behaviour. However, there are other people often influence a consumer’s purchase decision. The marketer needs to know which people are involved in the buying decision and what role each person plays, so that marketing strategies can also be aimed at these people, Kotler et al, (1994).
According to J. F. Engel, (1986) consumer behaviour involves 'those acts of individuals directly involved in obtaining, using, and disposing of economic goods and services, including the decision processes that precede and determine these acts'. An elementary observation of this definition contributes a limited wisdom into the complex nature of consumer choice process.
It is a discipline dedicated to the study of the processes involved when either individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy their needs and desires Solomon, (1995).
In the perspective of marketing, the term consumer refers to the purchase action and aggregation of possible patterns such as pre-purchase and post purchase behaviour. Pre-purchase action includes the awareness and searching information to evaluate different products or services which may potentially satisfy the need or want. Post purchase behaviour is an action that essentially evaluates the performance of purchased item. These behaviours have consequential implications on consumers’ repurchase behaviour, therefore they are agreeable to marketers though in different scale Foxall, (1995).
Social science researcher have been desiring for far more cultivated and refined theoretical concepts and techniques for analysing consumer behaviour. This provides for better understanding of behaviour, more accurate indicator of futuristic view and ensures effective discipline on consumer behaviour. D. Marsden, (1998) on this point suggests to elucidate conceptually undergirded framework for consumer behaviour, understanding of fundamental paradigms in consumer research and their sequential evolution is important. With advent and gradual evolution of discipline of consumer behaviour, researcher drew from various disciplines such as psychology, sociology, psycho-sociology to social literature, Solomon (1995). The reason for involving different disciplines by social science researcher is to approach consumer issues from different angles and dimensions.
Apart from many disciplinary approaches, consumer behaviour orientation can be safely bifurcated on the basis of their inherent emphasis on intrinsic forces, of which theories are taken from psychology and extrinsic forces have their underpinning in sociology discipline. Besides this focus of analysis’ consumer attitude differs is fundamental premise, and therefore, different aspects of consumption behaviour are described by various approaches.
Traditionally, economists have influenced the buyer behaviour modelling and economics viewed consumer behaviour as a single act of purchasing and after purchase actions. This theory dictates that purchase decision is a result of balanced and attentive economic calculations. Thus, buyers seek to spend resources on those goods that will deliver the maximum satisfaction according to their preferences and relative price.
Pure economics cannot provide all logical explanations to alterations in sales numbers, various sub-viewpoints within the field are able to offer explanations for psychological, preferential, and accumulated demand alterations. Many research studies have several studies have described the effect of price on brand preference, changes in product attributes and respective demand variation, price-demand elasticity and goods shortage on consumer choice behaviour. Paradigm such as learning theory reiterate that internal factors influence the consumer behaviour rather than external factors, which fundamentally justifies the economic purview of behaviour which forms the basis of rationalism.
In this regard, a technique such content analysis, can be used to analyse message content and handling and is ideal for conducting such literature review studies. As an observational research method, content analysis systematically evaluates the symbolic content of all forms of recorded communications, Sattari, (2012). It can be considered as an empirical starting point generating new research evidence about the nature and effect of specific communications. Content analysis not only helps in the identification of central issues to the field but can also help to reveal areas where more work needs to be undertaken, particularly if these are considered to be important and defining issues in the discipline.
According to Brown (2003), such integrative review of consumer behaviour research as a diverse discipline with an overwhelming scope in peer-reviewed journals is necessary if the field is to progress in a systematic fashion. Moreover, although content analysis of journals can be time-consuming and data intensive, such studies provide direction into future areas of needed inquiry in the field by offering insight about the topical, methodological, and theoretical trends into research communities.
To understand consumers’ behaviour, marketers need to know what product knowledge consumers have acquired and stored in memory. For instance, marketers may wish to determine how consumers organize a product category into product forms. Cognitive learning occurs when people interpret information in the environment and create new knowledge or meaning. Often these new meanings modify their existing knowledge structures in memory. Basically, consumers come into contact with information about products and services in three ways. Consumers. They can learn about products or services through direct personal use experience can also occur through consumers’ vicarious product experiences. That is, consumers can acquire knowledge indirectly by observing others using the product. Most vicarious observation probably occurs accidentally when consumers notice other people using a particular product or service.
Marketers should also recognize that consumers often think about products and brands in terms of their consequences rather than their attributes. Consequences are the out- comes that occur when the product is purchased and used or consumed. For instance, a surround sound system might be very loud, require assembly or repairs, or make the user feel proud. A facial cream might cause an allergic reaction or cost too much. Other consumers might think the buyer is either cool or outdated for buying a certain brand of jeans or sneakers.
They combine the three types of product knowledge to form a simple associative network called a means–end chain. A means–end chain links consumers’ knowledge about product attributes with their knowledge about consequences and values.
This perspective suggests that consumers think about product attributes subjectively in terms of personal consequences. By identifying the sequence of connections between product-related meanings at different levels of abstraction, marketers can then see more clearly what consumers really mean when they say a product attribute or a consequence is important. Means–end chain analyses also identifies the basic ends which are values and goals that consumers seek when they buy and use certain products and brands. This gives insight into consumers’ deeper purchase motivations. Finally, means–end chains identify the consumer–product relationship by showing how consumers relate product attributes to important goals and values. In turn, the more complete understanding of consumers’ product knowledge provided by means–end analysis helps marketers devise more meaningful and effective advertising, pricing, distribution, and product strategies.
Intrinsic self-relevance is based on consumers’ means–end knowledge stored in memory. Consumers acquire this means–end knowledge through their past experiences with a product. As they use a product or observe others using it, consumers learn that certain product attributes have consequences that help achieve important goals and values. For example, a consumer may learn that various attributes of a home entertainment system like surround sound, remote control, programmability have favourable and unfavourable consequences like impressing friends, being comfortable and relaxed. Because this means–end knowledge is stored in memory, it is a potential intrinsic source of involvement. If this knowledge is activated, in a decision situation, the consumer will experience feelings of personal relevance or involvement with the product whereas, situational self-relevance is determined by aspects of the immediate physical and social environment that activate important consequences and values, thus making products and brands seem self-relevant.
Sometimes companies begin with a desirable functional consequence that will appeal to many consumers, and have to learn what attributes consumers believe produce the desired outcome. A logical sequence therefore is to first research and analyse what consumers think, feel, and do relative to a company’s offerings and those of competitors. In addition, an analysis of consumer environments is called for to see what factors are currently influencing them and what changes are occurring. Based on this research and analysis, a marketing strategy is developed that involves setting objectives, specifying an appropriate target market and developing a marketing mix which are product, promotion, price, and place to influence it. After the target market has been selected based on careful analysis of key differences in groups of consumers, marketing strategies involve placing stimuli in the environment that hopefully will become part of the target market’s environment and ultimately influence its members’ behaviour.
Obviously, marketers are highly interested in the knowledge, meanings, and beliefs that consumers have for their products, brands, stores, and so on. It also is important for marketers to understand how consumers interpret their marketing strategies. For instance, marketers might have a sale to move a brand that is overstocked, but consumers might interpret the price decrease as an indication that product quality has dropped or that the brand has been discontinued.
Consumers’ involvement is another key concept for understanding consumer behaviour and it refers to consumers’ perceptions of importance or personal relevance for an object, event, or activity. Those consumers who perceive that a product has relevant consequences are said to be involved with the product and to have a personal relationship with it. Involvement with a product or brand has both cognitive and affective aspects. Cognitively, involvement includes means–end knowledge about important consequences produced by using the product.
Consumer research and analysis should not end when a strategy has been implemented. However, research should continue to investigate the effects of the strategy and whether it could be made more effective. Thus, marketing strategy should involve a continuous process of researching and analysing consumers and developing, implementing, and continuously improving strategies.
Marketers are most interested in understanding consumers’ involvement with products and brands. But people also may be involved with other types of physical objects such as advertisements. Some of these may be marketing environments such as a clothing store the consumer especially likes, a particular shopping mall, or a favourite restaurant. Finally, people may be involved with specific activities or behaviours such as playing tennis, working, windsurfing, or reading. Some consumers become involved with marketing-related activities such as collecting coupons, shopping for new clothes, finding the cheapest prices in town.
It is important that marketers clearly identify the focus of consumers’ involvement. Marketers need to know exactly what it is that consumers consider to be personally relevant: a product or brand, an object, a behaviour, an event, a situation, an environment or several of these together. Clearly, marketing strategies should be designed not only to influence consumers but also to be influenced by them as noted, consumer research and analysis can be conducted at several different levels. The Wheel of Consumer Analysis is a flexible tool that can aid in understanding different societies, industries, market segments, or individual consumers. Not everyone in society has changed his or her lifestyle, and some who did eventually reverted to less healthful habits.
Behaviour is critical for marketing strategy because only through behaviour can sales be made and profits earned. Although many marketing strategies are designed to influence consumers’ affect and cognition, these strategies must ultimately result in overt consumer behaviour to have value for the company. Thus, it is critical for marketers to analyse, understand and influence overt behaviour. Marketers can then send free samples, coupons, catalogues, and advertisements by mail to get them into consumers’ environments. Stores are located close to populated areas to get them in the proximity of consumers. Web sites become part of a consumer’s environment if they are contacted.
If marketers understand the consumer–product relationship, they may be able to segment the market in terms of consumers’ intrinsic self-relevance. For instance, some consumers may have positive means–end knowledge about a product category, whereas others may have favourable beliefs and feelings for a brand. Still other consumers may have favourable means–end knowledge about both the product category and the brand. Consumer Insight gives examples of the varying levels of brand loyalty in different product categories. Researchers have identified four market segments with different levels of intrinsic self-relevance for a product category and brand. Those with the strongest feelings are brand loyalists and routine brand buyers.
- Brand loyalists have strong affective ties to one favourite brand that they regularly buy. In addition, they perceive that the product category in general provides personally relevant consequences. Their intrinsic self-relevance includes positive means–end knowledge about both the brand and the product category, and leads them to experience high levels of involvement during decision making. They strive to buy the “best” brand for their needs. - Routine brand buyers have low intrinsic self-relevance for the product category, but they do have a favourite brand that they buy regularly (little brand switching). For the most part, their intrinsic self-relevance with a brand is not based on knowledge about the means–end consequences of product attributes.
The marketing organization needs a deep understanding of the benefits most valued by consumers and therefore which attributes are most important in terms of the consumer's purchase decision. It also needs to monitor other brands in the customer's consideration set to optimise planning for its own brand. During the evaluation of alternatives, the consumer ranks or assesses the relative merits of different options available. No universal evaluation process is used by consumers across all-buying situations. Once the alternatives have been evaluated, the consumer firms up their resolve to proceed through to the actual purchase. This self-instruction to make a purchase is known as purchase intent. Purchase intentions are a strong, yet imperfect predictor of sales. Sometimes purchase intentions simply do not translate into an actual purchase and this can signal a marketing problem.
According to Avery, Jill. (2014) in a book called "Unlock the Mysteries of Your Customer Relationships", states that consumers approach the actual purchase decision, they are more likely to rely on personal sources of information. For this reason, personal sales representatives must be well versed in giving sales pitches and in tactics used to close the sale. Methods used might include: ‘social evidence’, where the salesperson refers to previous success and satisfaction from other customers buying the product. Scarcity attraction is another technique, where the salesperson mentions that the offer is limited, as it forces the consumer to make a quicker decision, and therefore less time evaluating alternatives The other two segments have weaker levels of intrinsic self-relevance for a particular brand. Information seekers who have positive means–end knowledge about the product category, but no particular brand stands out as superior. These consumers need a lot of information to find a suitable brand. Over time, they tend to buy a variety of brands in the product category and brand switchers who have low intrinsic self-relevance for both the brand and the product category. They do not see that the brand or product category provides important consequences, and they have no interest in buying “the best.” They have no special relationship with either the product category or specific brands. Such consumers tend to respond to environmental factors such as price deals or other short- term promotions that act as situational sources of involvement, Greenberg, Paul (2009).
Consumer environment which refers to everything external to consumers that influences what they think, feel and do. It includes social responses such as the actions of others in cultures, subcultures, social classes, reference groups and families that influence consumers. It also includes other physical stimuli, such as stores, products, advertisements, and signs that can change consumers’ thoughts, feelings, and actions. The consumer environment is important to marketing because it is the medium in which stimuli are placed to influence consumers, Khosla, Swati (2010).
Accordingly, Fornell, Claes (1992), through a book , "A National Customer Satisfaction Barometer: The Swedish Experience", say that some companies are changing their offerings to appeal to the growing markets and thus put less emphasis on the middle-income group. Consumer behaviour involves exchanges between human beings. In other words, people give up something of value to others and receive something in return. Much of consumer behaviour involves people giving up money and other things to obtain products and services, that is, exchanges between buyers (consumers) and sellers (marketers). In fact, the role of marketing in society is to help create exchanges by formulating and implementing marketing strategies.
The interpretive approach is relatively new in the field and has become quite influential. It is based on theories and methods from cultural anthropology. This approach seeks to develop a deep understanding of consumption and its meanings. Studies use long interviews and focus groups to understand such things as what products and services mean to consumers and what consumers experience in purchasing and using them.
The traditional approach is based on theories and methods from cognitive, social, and behavioural psychology, as well as sociology. It seeks to develop theories and methods to explain consumer decision making and behaviour. Studies involve experiments and surveys to test theories and develop insights into such things as consumer information processing, decision processes, and social influences on consumer behaviour. This approach has had a profound impact on marketing thought, with some researchers focusing on theory testing and others on investigating the impact of marketing strategies on consumers.
The marketing science approach is based on theories and methods from economics and statistics. It commonly involves developing and testing mathematical models to predict the impact of marketing strategies on consumer choice and behaviour. This approach has become a mainstay in the consumer packaged goods industry because it can handle large scanner data sets in an efficient manner to help solve marketing problems.
Three groups which include marketing organizations, government and political organizations, and consumers all use knowledge about consumer behaviour and consumer behaviour research. Each of these groups is interested in consumer behaviour as it influences the consumer’s interactions and exchanges with the other groups. The first group of marketing organizations include not only businesses attempting to sell products but also hospitals, museums, parks, law firms, universities, and other organizations that seek exchanges with consumers. Although the primary emphasis in this text is on exchanges between businesses and consumers, the ideas presented can also be used by other marketing organizations.
The second group consists of various government and political organizations. These include government agencies such as the Federal Trade Commission and the Food and Drug Administration. The major concern of these organizations is monitoring and regulating exchanges between marketing organizations and consumers. This is accomplished through the development of public policies that affect marketing organizations and consumers. The third group interested in consumer behaviour includes both consumers and organizational buyers who exchange resources for various goods and services. Their interest is in making exchanges that help them achieve their goals and in understanding their own behaviour.
A marketing strategy is the design, implementation, and control of a plan to influence exchanges to achieve organizational objectives. In consumer markets, marketing strategies are typically designed to increase the chances that consumers will have favourable thoughts and feelings about particular products, services, and brands, and will try them and repeatedly purchase them. Also, marketing strategies are developed by retail stores, catalogue retailers, e-tailors and other direct marketers to increase the chances that consumers will have favourable thoughts and feelings about purchasing from them and will actually do so, Jim Dickie, CSO Insights (2006).
Channel-switching is the action of consumers switching to a different purchasing environment or distribution channel to purchase goods, such as switching from brick-and-mortar stores to online catalogues, or the internet.
A major reason for this channel switching behaviour is the convenience that online shopping provides for consumers. Consumers can shop online at any hour of the day, without having to drive, travel or walk to a physical store, and browse for as little or as much time as they please. The additional lure of ‘online only’ deals and discounts helps enforce a consumer’s preference to shop online. The other factors for this shift are the globalization of markets as well as changes in the legal and statutory environment. . A consumer may be prompted to switch channels when the product or service can be found cheaper, when superior models become available, when a wider range is offered, or simply because it is more convenient to shop through a different channels like online or one-stop shopping. According to Brown (2003), the initial research on consumers signified that e-shoppers concentrated more on essential products while doing e-purchase. While studying and concentrating on the consumers, various characteristics were identified by the researcher. These psychological characteristics as also stated by Lynch (2001), demographics as explained by Brwon (2003), perceptions of risk and benefits as stated by Bhatnagar (2004), the motivation for shopping as mentioned by Johnson (2007) and lastly the orientation towards shopping.
According to Wolfinbarger and Gilly (2002), on the other hand asserts that consumers willing to do e-shop emphasize on the image component of e-retailing.
This is because firstly, image helps in overall evaluation of the product or brand in a way of guiding actions such that a consumer is more likely to buy products and services from stores that according to them have a positive and better image than the others in the industry. Secondly, as stated by Dennis (2002), this is one of the approaches being adopted by various traditional stores and shopping centres. An old and traditional retailer would have a positive image in comparison to a newly opened e-retail store as mentioned by Kimber (2001). Kimber further stated that the loyalty of consumers towards the retail and online store are inter-linked.
Marketing to consumers through the Internet has many advantages for marketers. It allows products and services to be offered any time days a year.
It allows products and services to be offered globally in an efficient manner as it is cost efficient and saves the need for stores, paper catalogues, and salespeople. Additionally, it provides a means for developing one-on-one relationships with consumers and establishing consumer databases for conducting online research. Online Business to-Consumer marketing requires marketers to understand consumers and deliver the products as well as services consumers want and need in the manner that traditional marketing does. Therefore, it can be concluded that the attitude of an e-consumer towards the e-retailer is influenced positively by the perception the customer has on the e-retailer image. Hence it can be deduced that the attitude a customer has towards purchasing goods online in retail will be positively influenced by the perception he or she holds about the retailer image. Intentions of an individual directly affect the attitude and hence positive intentions will lead to positive attitude as stated by Lee and Tan (2003
According to Schiffman (2004), consumer behaviour focuses more on the user than the buyer, while paying attention to other aspects as well. As further explained, buyers and sellers are the two main and most crucial elements in consumer behaviour. They have varied needs and wants and in order to fulfil them go through a complex process of buying and purchasing goods and services as well as often getting into the process of trading with the seller that leaves both the buyers and sellers satisfied. Marketers typically develop strategies to create positive affect for their products and brands to increase the chances that consumers will buy them. Cognition refers to the mental structures and processes involved in thinking, understanding, and interpreting stimuli and events. It includes the knowledge, meanings, and beliefs that consumers have developed from their experiences and stored in their memories. It also includes the processes associated with paying attention to and understanding stimuli and events, remembering past events, forming evaluations, and making purchasing decisions and choices. Although many aspects of cognition are conscious thinking processes, others are essentially automatic. Marketers often try to increase consumers’ attention to products and their knowledge about them, Fill, C (2013)
The major reason for the shift to focusing on consumers is the dramatic increase in the quality of consumer and marketing research. In the past, companies often did not have detailed information on the actual purchasers and users of their products. Although they conducted research to investigate new product concepts and to try to understand consumers, often this research was not continuous and did not identify the firm’s actual customers. Today computer technology and scanners and other data sources have enabled companies to know personally who their customers are and the effects on those consumers of marketing strategy and changes in strategy, Fullerton, R.A, (1950).
A third reason for the increased emphasis on consumers is the development of the Internet as a marketing tool. In the past, consumers received most of their information about products and services from traditional print and media advertising and shopped primarily in brick-and-mortar stores. While this is still the case for many purchases, marketers have recognized the potential for e-marketing to completely change the way consumers shop and purchase.
This change could be a threat to traditional manufacturers and retailers unless they adapt their marketing strategies to include electronic commerce. This change is an opportunity for small companies and entrepreneurs, since the start-up costs of marketing products and services are greatly reduced compared with traditional marketing methods. Finally, savvy marketers have also recognized that the Internet can be used to conduct marketing research studies and collect other useful information about consumers that can be used to develop effective marketing strategies.
Many successful companies have recognized the importance of consumers and have sophisticated approaches and detailed data from which to develop organizational and marketing strategies. Market researchers use a variety of techniques to learn about consumers. For example, focus groups, surveys, experiments, and scanner data studies have long helped marketers develop more effective strategies. However, a recent trend in market research is to dig deeper into consumers’ minds and lives using a variety of anthropological techniques to better understand the deeper meaning of products.
For the consumer, channel switching offers a more diverse shopping experience. However, marketers need to be alert to channel switching because of its potential to erode market share. Evidence of channel switching can suggest that disruptive forces are at play, and that consumer behaviour is undergoing fundamental changes. A decision is the selection of an action from two or more alternatives.
The buyer preferences rapidly change and are affected by multiplicity of factors at a given point of time which are difficult to analyse. Therefore it is necessary to continuously study, analyse and understand it and monitor this understanding to the marketing management so that effective decisions can be taken in respect of service’s price, distribution and promotion.
Therefore, because it is decision to buy a product or service, Impulse purchases which are unplanned purchases, are also a part of this. This type of buying can be defined as a sudden and powerful urge to buy immediately. This occurs when a consumer purchases an item which they had no intention of purchasing prior to entering the store. Impulse buying can be influenced by external stimuli such as store characteristics and sale promotions, internal stimuli such as enjoyment and self-identity, situational and product related factors such as time and money available, and demographic and socio-cultural factors such as gender, age, and education. Stern introduced the four broad classifications of impulse buying including pure impulse buying, reminded impulse buying, suggestion impulse buying, and planned impulse buying and the following are some of the types of impulse buying:
- Reminded impulse buying Occurs outside of the normal purchase behaviour where a consumer experiences a strong emotion of desire towards a product that he/she did not initially plan to buy enhanced by consistent email alerts from subscribed websites about special offers, limited time discounts and flash sales, on some level, stealthily create a sense of urgency for the consumer to purchase the product.
- Reminded impulse buying occurs when a consumer remembers the need for a product by seeing it in a store. This is triggered through various techniques such as in-store advertising or sensory marketing.
- Suggestion impulse buying Occurs when a consumer sees a product that they have no prior knowledge about, envisions a use for it, and decides that they need it.
- Planned impulse buying involves a partially planned intention of buying, however specific product or categories are not yet determined. In this case, the consumer's purchasing decision can be encouraged by retailing staff or even their peers who can persuade the consumer to purchase a substitute or provide reassurance about an alternative brand choice.
Marketers have long argued that the marketing concept is the appropriate philosophy for conducting business. Simply stated, the marketing concept suggests an organization should satisfy consumer needs and wants to make profits. To implement the marketing concept, organizations must understand their customers and stay close to them to provide products and services that consumers will purchase and use appropriately.
The approach of behavior analysis to complex behavior is marked by a strong reliance on experimentation at one extreme and by speculative interpretations at the other. Unfortunately, they rarely impinge on each other; nor is either uniquely able to contribute more than the rudiments of a genuine operant interpretation. The experimental analysis of consumer behavior is, therefore, like the experimental analysis of behavior of which it forms part, a pursuit in itself. The objective seems to be to discover what happens under the rather restricted conditions of the closed setting defined by the experimental space. Consumer behavior analysis has proposed three means of overcoming this impasse. The starting point has to be a philosophical understanding of the kind of explanatory base that behavior analysis is able to provide, some theoretical position that emphasizes both the distinctiveness and the limitations of a behaviorist account of consumer choice.
It should be clear that marketing strategies, particularly as developed and implemented by successful companies, have a powerful force on consumers and society at large. Marketing strategies not only adapt to consumer needs and wants but also change what consumers think and feel about themselves, various marketing offerings and about reasons and situations for purchase and use. This does not mean that marketing is unethical or an inappropriate activity. However, the power of marketing and the ability of consumer research and analysis to yield insight into consumer behaviour should not be overlooked. From that understanding that a consumer is clearly a critical element in developing successful marketing strategies. Marketers have to analyse and understand not only consumers of their products and brands but also consumers of competitive offerings and the reasons they purchase competitive products. Understanding markets and developing and implementing superior strategies to attract and hold them profitably is the essence of marketing strategy
The idea of the contextual stance, Foxall, (1998b, 1999a) is meant to provide such a basis and to present it in contra- distinction to the intentional stance used by Dennett (1987) to characterize a particular philosophical foundation of cognitivism. Consumer behaviour analysis has never sought to pursue a behaviorist approach to the exclusion of other perspectives; indeed the coexistence and interaction of multiple theoretical viewpoints is central to its conception of intellectual development.
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