A Primer on Consumer Behavior

A Guide for Managers

David W. Stewart

• Publisher: Business Expert Press
• Year: 2018
• Print ISBN: 9781947441200
• eBook ISBN: 9781947441217
• Topic: Business
• Subtopic: Consumer Behaviour
• Index: Business

At its most fundamental level, marketing is about influencing the decision making and behavior of customers. Profitable businesses are built on an understanding of their customers and the creation and delivery of products and services that meet the needs of these customers. This book is intended to provide a quick, highly accessible introduction to key issues and concepts necessary for understanding market demand, designing successful products and services, and for creating effective marketing programs. The focus of the book is on information likely to be most useful to a practicing manager rather than the student or scholar who is seeking a deep understanding of consumer behavior. For this reason, the book includes "points to ponder" that link basic concepts to marketing practice. The final chapters of the book also point the reader to a variety of additional resources for learning more about consumer behavior in general and consumers in specific markets.

CHAPTER 1

Consumer Behavior: The Foundation of Marketing

This chapter provides an introduction to consumer and buyer behavior. We will generally use the term consumer behavior to refer to the activities of individual consumers and households and use the term buyer behavior to refer to the purchasing activities of organizations. It is important to note that consumer and buyer behavior includes many different types of activities from recognizing the need for a product or service, to obtaining information, to the actual purchase decision, to product use, and ultimately to product disposal.

At its most fundamental level, marketing is about influencing the decision-making and behavior of customers. Depending on the particular business, customers may be individuals, households, or organizations and how they make decisions may vary considerably. An understanding of the factors that influence buyer’s decision-making and behavior is critical to marketing and business success.

For example, an understanding of the alternative uses consumers made of its product allowed Arm and Hammer to revitalize a mature baking product into a cleaner and deodorizer that is now purchased as a carpet cleaner; a deodorizer for refrigerators, sinks, garbage cans, and cat litter; laundry detergent; and toothpaste, among others. The success of Arm and Hammer stands in sharp contrast to many companies. It has been estimated that 80 percent of all new products fail in the market.¹ The most frequent reason for such failure is a lack of understanding of customers and potential customers.

Consumers Are Purposeful

The fundamental organizing principle of consumer and buyer behavior is that buyers purchase and use products and services in pursuit of goals. Buyer’s purchases and uses of products and services are neither random nor irrational. Although not always apparent to an observer, consumers behave in a systematic manner that can be understood in the context of goal pursuit. The key is discovering such underlying motivation.

For example, what may appear to be random switching from brand to brand by a consumer may, in fact, be a systematic effort to evaluate brands (or recent improvements in brands). On the other hand, another consumer who regularly switches brands may be seeking variety and yet another consumer may be seeking the brand that is being promoted with the lowest price. All three of these consumers appear similar in their brand-switching behavior but what they buy on any purchase occasion may be quite different. What appears to be inexplicable and even random behavior is readily explained once the motives of these consumers are understood.²

Point to Ponder

Some products can serve multiple purposes. For example, Jell-O can be used in a salad or as a dessert; Bisquick can be used to make pancakes and biscuits. What other products can you identify that have multiple and varied uses? Do the same consumers use them for different purposes or do different consumers use them differently? How would the answer to the latter question influence marketing decisions?

It is often useful to think of consumers as bundles of goals and use occasions.³ Consumers have particular sets of purposes for which they buy and use products and services. These goals change as the circumstances of the consumer change. They change with the consumer’s age, education, and occupation. They change over the course of the family life cycle. And they change from one social situation to another. Understanding goals and how they differ from buyer to buyer and how they change over time for the same buyer are important elements in product design, service delivery, and marketing planning.

Understanding Consumer’s Goals

Consumers use products for many purposes; it is not always apparent which purposes are served by which products. Beer may be consumed because it quenches thirst, but it may also be closely linked to social situations in which the consumer wishes to feel accepted and a part of the group. Indeed, there is evidence that many consumers consumer different alcoholic beverages and drink brands depending on situational factors. ⁴ While any brand of beer may satisfy thirst, not all beers are equally acceptable in social situations. Thus, an inexpensive generic beer is fine for home consumption, but a premium brand may be preferred in social situations.⁵

Discovering the linkages between products and brands and specific consumer goals is a difficult task. One approach to identifying these linkages has been referred to as means-end analysis, or laddering.⁶ Means-end analysis focuses on the linkages between:

• the attributes that exist in products (the “means”),

• the consequences for the consumer provided by the attributes, and

• the goals (the “ends”) these consequences serve or reinforce.

Means-end analysis is generally carried out by means of an in-depth, one-on-one interview technique that attempts by asking successive questions to uncover the relationship of products to basic values. For example, in one application of the technique a relationship preference for a particular flavored snack chip and self-esteem was uncovered.⁷ Such a relationship is not immediately obvious but took the following form:

The discovery of such linkages provides a number of opportunities for marketing activities. The marketer might emphasize the linkage between the chip and self-esteem by actually playing out the value chain in a commercial or the marketer might select any one link as a point of emphasis in an advertisement, such as emphasizing a feeling of satisfaction after consuming only a few chips. Alternatively, the marketer might focus on further enhancement of the chip’s flavor to increase satisfaction after eating only a few chips. Yet another action might be reducing calories in the chips and communicating to consumers that they can eat more without fear of gaining weight.

Figure 1.1 provides an illustration of an advertisement that links a specific benefit to a product. In this advertisement for La-Z-Boy there is an explicit association of comfort with the chair and sofa, and it is the comfort benefit that is the focus of the advertisement.

Figure 1.1 Products are a means to an end

Point to Ponder

Think about participation in a very public charitable event, such as the challenge for charity, the MBA charity event, or some similar affair. Develop the likely means-ends chains for those MBA students who might participate. What do these several chains suggest about how you might go about motivating participation?

While goals provide a powerful organizing framework for describing and explaining consumer’s decision-making and behavior, goals exist within a broader context. Characteristics of the individual and of the social and environmental context influence the development and enactment of consumer’s goals.⁸ A consumer’s goals in turn define, at least in part, the individual’s personality and sense of self, and influence the more proximate social and environmental conditions within which the consumer makes decisions and uses products, because the consumer’s goals also direct decisions about where the consumer will spend his or her time. Thus, while consumer’s goals represent the reasons for a purchase, the enactment of those goals is influenced by many other factors. These factors will be explored in subsequent chapters.

Takeaways

As a marketer, the most fundamental goal is to influence how consumers (individuals) and buyers (organizations) make decisions. To achieve this end, it is paramount that a marketer understands people making buying decisions are pursuing specific goals. These goals may change over time, they may vary from one situation to another, but they always exist. Discovery of these motives is the starting place for understanding and insight. By recognizing how they vary from buyer to buyer and how they evolve over time, the marketer can make informed, confident, and impactful decisions about market offerings, branding and marketing strategies. These goals of a consumer are the product of the consumer’s individual personality. It is this personality that determines where they spend time, who they trust, when they buy, and what they buy. Throughout this book, we will explore these links and what they say about the greater context of personality to better understand and develop strategies around consumer behavior.

Notes

1. Wagner (2013).

2. Bagozzi and Dholakia (1999, pp. 19–32).

3. Ratneshwar et al. (2001, pp. 147–57).

4. Social Issues Research Centre (2018).

5. Temporal (2001, pp. 170–80).

6. Thomas and Olson (2001); Gutman (1982, pp. 60–72).

7. Gutman (1997, pp. 545–60); Thomas and Gutman (1988, pp. 11–31).

8. Ratneshwar, Mick, and Huffman (2003).

CHAPTER 2

Forces Influencing Buyer Decision Making and Behavior

Chapter 1 introduced the importance of understanding consumers’ goals as drivers of consumer behavior. Consumers’ goals arise from many sources and are influenced by numerous factors. This chapter explores the factors that influence consumers’ goals.

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Table of contents

• Cover
• Half-title Page
• Title Page
• Copyright
• Abstract
• Contents
• Preface
• Acknowledgments
• Chapter 1 Consumer Behavior: The Foundation of Marketing
• Chapter 2 Forces Influencing Buyer Decision Making and Behavior
• Chapter 3 Psychological Processes that Influence Consumer Behavior
• Chapter 4 Consumer Behavior as a Decision Process
• Chapter 5 Mapping the Market: Decision Making Rules
• Chapter 6 Organizational Buyer Behavior
• Chapter 7 Learning More About Customers
• Chapter 8 Evaluating Secondary Sources of Information About Customers
• Chapter 9 Analyzing Secondary Customer Data
• Chapter 10 Conclusion
• References
• About the Author
• Index
• Backcover