Consumer and Organisational Behaviour I – SS1 Marketing Lesson Note (Second Term)

Consumer behaviour is the study of individuals, groups or organisations and the processes they use to select, secure, use and dispose of products, services, experiences or ideas to satisfy needs.

Behavioural objectives

By the end of the lesson, students should be able to:

1. define consumer behaviour;
2. state the three roles a customer plays in buying;
3. explain why firms study consumers;
4. list the four main factors that influence consumer behaviour;
5. describe the cultural, social, personal and psychological factors that influence buyers.

What is consumer behaviour?

Consumer behaviour is the study of how people and organisations choose, buy, use and dispose of products and ideas to satisfy needs.

• Select: choosing between brands, products and shops.
• Secure: getting the product, by buying or other means.
• Use: consuming the product or enjoying the service.
• Dispose: throwing away, reselling or recycling what is left.
• Impact: the study also covers the effects of these processes on the consumer and on society.

What roles does a customer play in buying?

A customer plays three distinct roles in buying: user, payer and buyer.

• User: the person who uses or consumes the product, such as a pupil who eats a snack.
• Payer: the person who provides the money, such as a parent who pays school fees.
• Buyer: the person who chooses the product and obtains it, such as someone who goes to the shop.
• Note: one person may play all three roles, or three different people may each play one.

Why do firms study consumers?

Firms study consumers to improve their marketing strategies by understanding the following:

1. the psychology of how consumers think, feel, reason and select between different alternatives (e.g. brands, products and retailers);
2. the psychology of how the consumer is influenced by his or her environment (e.g. culture, family, signs, media);
3. the behaviour of consumers while shopping or making other marketing decisions;
4. how limitations in consumer knowledge or information processing abilities influence decisions and marketing outcomes;
5. how consumer motivation and decision strategies differ between products that differ in the level of importance and interest they hold for the consumer;
6. how marketers can adapt and improve their marketing campaigns and strategies to reach the consumer more effectively.

• Customer as king: consumer behaviour is important because, in the modern philosophy of marketing, the customer is treated as king.

What factors influence consumer behaviour?

Four groups of factors influence consumer behaviour: cultural, social, personal and psychological factors.

1. What are cultural factors?

Cultural factors are the values, ideals and attitudes of a community that shape how its members behave and buy.

• Culture: the patterns of behaviour and social relations that characterise a society and separate it from others.
• Function: culture conveys values, ideals and attitudes that help people communicate and evaluate situations.
• Source: what a person learns from parents and relatives as a child becomes his or her culture.
• Effect: culture decides the way a person behaves. In simple words, culture is the values of an individual.
• Examples: choice of food, dress and festival items often follow the culture, religion or ethnic group of the buyer.

2. What are social factors?

Social factors are the influences of groups, family, and roles and status on a consumer’s buying behaviour.

Groups

• Group: two or more people who interact to accomplish individual or mutual goals.
• Influence: a person’s behaviour is influenced by many small groups.
• Membership groups: groups that have a direct influence and to which a person belongs.

There are two kinds of membership group: primary and secondary.

Family

• Importance: family members can strongly influence buyer behaviour.
• Research: the family is the most important consumer buying organisation in society and has been researched extensively.
• Marketers’ interest: they study the roles and influence of the husband, wife and children on the purchase of different products and services.

Roles and status

• Role: the activities a person is expected to perform in a group, such as parent, student or manager.
• Status: the position or respect attached to a role.
• Effect: people often buy products that suit their role and show their status.

3. What are personal factors?

Personal factors are the features of an individual that explain why he or she buys, or does not buy, particular products and services.

• Age and stage of life: a child, a young adult and a retired person buy different things.
• Occupation: a teacher, a farmer and a banker need different clothes and tools.
• Economic circumstances: income and savings decide what a person can afford.
• Lifestyle: the way a person lives, shown in activities, interests and opinions.
• Personality: the lasting traits of a person, which affect the brands he or she prefers.

4. What are psychological factors?

Psychological factors are the mental processes within a person that affect what he or she buys.

• Motivation: a motive (or drive) is a need that is pressing enough to direct the person to seek satisfaction of that need. Hunger pushes a person to buy food.
• Perception: the process by which people select, organise and interpret information to form a meaningful picture of the world. Two people may see the same advert differently.
• Learning: changes in an individual’s behaviour arising from experience. A buyer who is pleased with a product tends to buy it again.
• Belief: a descriptive thought that a person holds about something.
• Attitude: a person’s consistently favourable or unfavourable evaluations, feelings and tendencies towards an object or idea.

Evaluation

1. Define consumer behaviour.
2. State the three roles a customer plays in buying behaviour.
3. List the four groups of factors that influence consumer behaviour.
4. Give two examples each of primary groups and secondary groups.
5. Define perception and learning.

Assignment

Write short notes on cultural factors and social factors that influence consumer behaviour. Then state the meaning of motivation, perception, learning, belief and attitude.