Consumer behavior is the study of consumers and the decision-making processes, external factors, and individual characteristics that they use in making purchase decisions.
In addition to the decision-making process, a variety of external and internal variables can affect the consumer’s ultimate purchase decision. Among the external factors that can be influential in the purchasing decision process are socio-economic factors, family and reference group influences and cultural and subcultural variables. Internalized psychological variables such as motivation, attention, personality, attitudes, and learning are also considered to play a significant role in the understanding of consumer behavior.
Obviously the study of consumer behavior primarily involves how consumers make the decision to buy a particular product. In addition, however, the consumer behavior discipline is interested in a variety of other behaviors both prior to the actual purchase and after the purchase has been made. The search process, the consumption process and, in some cases such as in the purchase of a house, the disposal process, are all instrumental to the ultimate purchase decision.
As a result of studying the psychological processes consumers use in making a purchase decision, several decision-making models have been suggested.
A simplified model of a high-involvement consumer behavior decision which might be used to purchase a house or a car, for example, involves five main stages: problem recognition, information search, evaluation of alternatives, purchases, and postpurchase evaluation.
In the problem recognition state, the buyer becomes aware of a discrepancy between an ideal state versus an actual state. There are several situations which may lead to problem recognition. For example, the consumer’s stock of goods may be depleted, thus necessitating a purchase decision.
In addition, motive arousal such as a basic drive (i.e., being hungry), autistic thinking (i.e., thinking about food), or an environmental stimulation (i.e., the smell of food) can create problem recognition.
The second stage of the decision process, the information search, involves both an internal memory search as well as an external search for information. A number of factors will help determine the extent of the internal memory search.
First of all, the quantity and quality of existing information as well as the consumer’s ability to recall that information will affect the amount of information currently accessible to the consumer.
Secondly, the perceived level of risk – in terms of financial risk, social risk, and commitment—tends to motivate external search. Finally, the consumer’s lack of confidence in his decision-making skills also tends to minimize internal search in favor of external searching.
Once the internal memory search has provided all of the information available, an external search is undertaken if still more information is required. The external search involves gathering pertinent information about the product from a variety of external sources such as reference groups, opinion leaders, family members, sales clerks, point of purchase displays, and product packages.
Although the information itself may not cost any dollars, the search process is far from free. Among the costs that may be associated with the external search for information are: time costs, cost of gasoline and parking, psychological frustration, and time spent away from leisure activities.
The next step, evaluation of alternatives, involves a comparison of products considered to be viable alternatives. Using a heuristic, or rule of thumb, the consumer decides upon the salient attributes for the product and then evaluates each brand accordingly. Once an acceptable product has been selected, the buyer is ready to move on to the purchase stage of the process.
During the purchase stage, the consumer physically purchases the product. Depending upon the particular product, issues such as price, delivery, service, and warranty may be negotiated between buyer and seller during this stage of the decision process.
The brand selected in the “alternatives” stage of the decision process is not necessarily the brand that is purchased; product availability, particularly in the case of stock outs, may influence the consumer’s ultimate purchase regardless of the original brand selected.
Finally, after purchasing and using the product, the consumer will evaluate it during the post-purchase evaluation stage and determine whether or not the product lives up to expectation levels. The eventual outcome of this stage, satisfaction or dissatisfaction, feeds back into the initial stages of the purchase process to influence repeat purchases.
The decision process for low-involvement products, such as basic grocery items, is a simplified variation of the high-involvement model. The initial stage, problem recognition, is the same for both models. In the low-involvement version, however, the purchase may be made prior to the evaluation of alternatives.
Since there is little risk involved with a low-involvement decision, it is beneficial to forego the costly search and evaluation steps of the process until after the purchase has been made. Therefore, it is not until the third and final stage of the decision process, the alternative evaluation stage, that an actual comparison of products occurs.
The benefits of understanding consumer behavior are numerous. First and foremost, in order to fully utilize the marketing concept, it is essential that the marketer know his customer. Not only does the study of consumer behavior help him identify his customer, but it also gives him insight into the decision process as well as the external variables and psychological constructs that influence the purchase decision.
By understanding these variables, the marketer can hopefully influence the purchase process.
In addition, the study of consumer behavior is helpful to consumers themselves by providing governmental agencies with information necessary to institute and regulate public policies such as package labeling. By helping consumers improve their buying skills, the study of consumer behavior opens their eyes to marketer influencing (i.e., manipulation) attempts.
In addition to examining the decision process, the study of consumer behavior also involves examining both the external variables present in the environment and the psychological constructs unique to each individual which influence the product purchase.
Reference groups, or the groups of people with whom an individual associates, are important to the decision process since individuals take on many of the same qualities of the group to which they belong. In addition, groups have the power to influence their member’s behavior. By using reward or coercive power, a group either rewards or punishes an individual for his behavior.
Legitimate power is used by evoking the individual’s internalized values such as his patriotic duty. Expert and referent power are frequently used in advertising messages. Expert power results from an individual’s expertise in the group whereas referent power results from a feeling of identification an individual has with the group.
A consumer’s socioeconomic status also plays an important role in the purchase process. Socioeconomic status is largely determined by an individual’s source of income, occupation, housing, and education.
Cultures and subcultures are particularly significant when studying consumers in the United States due to the diverse population. Culture includes intangible concepts as well as values and acceptable behavior patterns.
Subculture consists of the values and behaviors unique to certain races, ethnic groups or other human characteristics. Hence, cultural and subcultural differences may dictate considerably different preferences and buying patterns for various consumers.
In addition to external factors, a number of psychological constructs unique to each individual are also pertinent to the understanding of consumer behavior.
Motives, or those internal energizing forces that orient a person’s activities toward a goal, can be combined to form either:
- motive linking, which occurs when various levels of generality are used;
- motive bundling, when two or more motives are combined; and
- motive conflict, where major motives conflict in the marketplace.
For example, a person may be motivated to visit a dentist out of fear for future dental problems without preventive maintenance as well as a desire to have white teeth. Hence motives can be both negative and positive, and an individual can act on more than one motive at a time.
Learning and memory can also affect consumer behavior. Very simply, learning can be defined as a relatively permanent change in behavior or cognitions which results from experience. Both psychological theories of classical conditioning and operant conditioning are used in marketers’ analysis of consumer learning.
Memory, or the ability to recall information stored in the brain, is particularly crucial to the search stage of the decision process. Whereas short-term memory can be thought of as the workspace for information processing, long-term memory is a relatively permanent storehouse for information. The amount of information an individual is able to process, as well as how that information is processed, are highly individual traits.
Attitude, another significant construct in understanding consumer behavior, is considered to be a learned predisposition to respond in a consistently favorable or unfavorable manner towards an object, idea or individual. Attitudes, in general, remain relatively stable throughout an individual’s lifetime.
Finally, personality is another psychological construct which can be influential in the purchase process. Although there are as many definitions of personality as there are researchers who attempt to define it, they all seem to agree that personality tends to be consistent throughout an individual’s lifetime.
Although marketers have tried to match particular products with personality types, such as risk takers versus risk avoiders, the results have been inconclusive.
Consumer behavior can be researched and evaluated using several different research methodologies depending upon what aspect of consumer behavior is being examined.
To understand the decision process, protocol analysis, information integration or informational monitoring research approaches are frequently used. Methods such as word-association tests, projective tests, or depth interviews are used as cognitive measures.
In addition, a variety of observational techniques, both unobtrusive and obtrusive, such as eye movement analysis, are used to investigate consumer behavior. Finally, surveys in all forms – phone surveys, online and mail surveys, and personal interviews – are used in descriptive research as well as in experimentation.
Although a relatively recent discipline, the study of consumer behavior has progressively enriched the understanding of why people buy and how the decision to buy is made. Many areas within the discipline, however, are particularly ripe for further research.
While the study of how an individual makes a decision is difficult enough to understand, the problem is further complicated when the decision involves a group of people; hence, family decision-making offers new challenges to the consumer behavior researcher.
Applications to Small Business
The application of consumer behavior research to small business is similar to applications used by larger businesses. Probably the most recent use of consumer behavior in a nontraditional setting is investigating how consumers use, purchase, and evaluate services.
Since the service industry provides an intangible product, understanding the purchase process is similar yet unique from the typical product purchase decision.
In addition, the study of consumer behavior in relation to nonprofit donations provides a relatively new application of the discipline which could be instrumental in helping charitable organizations understand, and ultimately, solicit their constituents.