Understanding Consumer Buying Behavior: A Comprehensive Guide
Consumer Markets and Consumer Buying Behavior
Understanding Consumer Behavior
Consumer buying behavior refers to the processes involved when individuals or households purchase goods and services for personal use. The U.S. consumer market, with over 284 million people, represents a significant opportunity for businesses worldwide. Consumers vary greatly in demographics such as age, income, education, and preferences.
The Consumer Behavior Model
Many companies conduct extensive research to understand consumer purchasing decisions. While it’s relatively easy to observe what, where, and how much consumers buy, understanding the why behind their choices is more complex. This is often referred to as the “black box” of the consumer.
Model of Buyer Behavior
- Marketing Stimuli and Other Influences: This includes factors like product, price, place, promotion, as well as economic, technological, political, and cultural influences.
- Buyer’s Black Box: This encompasses the buyer’s characteristics and the decision-making process.
- Buyer’s Response: This includes product choice, brand selection, dealer choice, purchase timing, and purchase quantity.
Marketers aim to understand how stimuli are processed within the buyer’s black box, which is influenced by both the buyer’s characteristics and their decision-making process.
Factors Influencing Consumer Behavior
Cultural Factors
Culture plays a significant role in shaping consumer behavior. Marketers need to consider the impact of culture, subculture, and social class.
Culture
Culture is the foundation of a person’s wants and behaviors. Human behavior is largely learned. As individuals grow within a society, they acquire fundamental values, perceptions, preferences, and behaviors from their family and other institutions.
Subculture
Within broader cultures, subcultures exist as groups of people with shared value systems based on common experiences and situations. Subcultures can be based on nationality, religion, race, or geographic region. Many subcultures represent important market segments, and marketers often tailor products and marketing programs to meet their specific needs.
Example: The U.S. Hispanic Market
The U.S. Hispanic market, comprising over 35 million consumers, represents a significant buying power. Companies recognize the importance of this segment and often develop products and marketing campaigns specifically targeted towards Hispanic consumers.
Social Class
Most societies have some form of social class structure. Social classes are relatively permanent and ordered divisions within a society, where members share similar values, interests, and behaviors. Social class is not solely determined by income but is a combination of factors like occupation, education, wealth, and other variables.
Marketers are interested in social class because members of a particular class tend to exhibit similar buying behavior. Social classes often show preferences for specific brands and products in areas like clothing, home furnishings, leisure activities, and automobiles.
Social Factors
Social factors, such as groups, family, and social roles and status, also influence consumer behavior.
Groups
An individual’s behavior is influenced by various groups. Groups to which a person belongs and that have a direct influence are called membership groups. Reference groups, which individuals may not belong to, can also exert influence. Marketers often try to identify the reference groups of their target markets.
Family
Family members can have a strong impact on buyer behavior. The family is the most important consumer buying organization in society. Marketers are interested in the roles and influence of husbands, wives, and children on the purchase of different products and services.
Roles and Status
Individuals hold different roles and statuses within various groups. A role consists of the activities a person is expected to perform according to those around them. People often choose products that reflect their status in society.
Personal Factors
Personal characteristics, such as age and life-cycle stage, occupation, economic situation, lifestyle, personality, and self-concept, also influence buyer decisions.
Age and Life-Cycle Stage
The goods and services people buy change over their lifetime. Marketers often define their target markets based on life-cycle stage and develop appropriate products and marketing plans.
Occupation
A person’s occupation can influence the products and services they purchase. For example, blue-collar workers may buy more rugged work clothes, while executives might purchase more suits. Marketers try to identify occupational groups that are relevant to their products and services.
Economic Situation
An individual’s economic situation affects their product choices. Marketers of income-sensitive goods monitor trends in personal income, savings, and interest rates. During economic downturns, marketers may redesign, reposition, or adjust the pricing of their products.
Lifestyle
People from the same subculture, social class, and occupation can have very different lifestyles. Lifestyle is a person’s pattern of living, expressed in their activities, interests, and opinions. It captures more than social class or personality and provides a profile of how individuals interact with the world.
Personality and Self-Concept
Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s environment. Personality can be useful in analyzing consumer behavior for certain products. For example, coffee companies have found that coffee drinkers tend to be more sociable, leading them to create environments that encourage socializing.
Psychological Factors
Four major psychological factors—motivation, perception, learning, and beliefs and attitudes—also influence buyer decisions.
Motivation
A motive (or drive) is a need that is sufficiently pressing to direct a person to seek satisfaction. Psychologists have developed theories of human motivation, with two prominent theories being those of Sigmund Freud and Abraham Maslow.
Sigmund Freud
Freud assumed that people are largely unaware of the real psychological forces shaping their behavior. He suggested that a person’s buying decisions are affected by subconscious motives that even the buyer may not fully understand.
Abraham Maslow
Maslow’s hierarchy of needs explains why people are driven by particular needs at particular times. The hierarchy suggests that needs are arranged in a pyramid, with the most pressing at the base and the least pressing at the top. As each level of needs is satisfied, the next level becomes more important.
Maslow’s Hierarchy of Needs
- Physiological Needs: Hunger, thirst
- Safety Needs: Security, protection
- Social Needs: Sense of belonging, love
- Esteem Needs: Self-esteem, recognition, status
- Self-Actualization Needs: Development and fulfillment
Perception
Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world. People can form different perceptions of the same stimulus because of three perceptual processes: selective attention, selective distortion, and selective retention.
- Selective Attention: The tendency for people to screen out most of the information to which they are exposed.
- Selective Distortion: The tendency for people to interpret information in a way that will support what they already believe.
- Selective Retention: The tendency to remember good points made about a brand they favor and forget good points made about competing brands.
Learning
Learning describes changes in an individual’s behavior arising from experience. Most human behavior is learned. Learning occurs through the interplay of drives, stimuli, cues, responses, and reinforcement.
Beliefs and Attitudes
A belief is a descriptive thought that a person holds about something. Beliefs may be based on real knowledge, opinion, or faith and may or may not carry an emotional charge. An attitude describes a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea. Attitudes put people into a frame of mind of liking or disliking things, of moving toward or away from them.
Consumer Behavior Across International Borders
For companies operating in multiple countries, understanding consumer behavior can be challenging. While consumers in different countries may have some similarities, cultural, social, and personal factors can significantly influence their purchasing decisions. Companies need to adapt their marketing strategies to effectively reach consumers in different international markets.