Consumer Behaviour

HRD2505 - Marketing Assignment

ENED211-0326/2016 TOO DOMINIC KIBET

ENED211-0317/2016 KEMBOI ALLAN KIPLETTING

ENED211-0315/2016 KIMOTHO REBECCA WAMBUI

Institution: Jomo Kenyatta University of Agriculture and Technology

Monday, October 31, 2016

Tutor: Irene Imali

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Consumer behaviour

Consumer Behaviour may be understood as the decision process and physical activity
individuals engage in evaluating, acquiring, using or disposing of products (Solomon,
Russell-Bennett, & Previte, 2012). Consumer behaviour incorporates elements of
psychology, sociology, marketing and economics. Behavioural economics particlualry come
in handy in establishing patterns and decision making processes of buyers, both indicudual
and groups. Consumer behaviour is studied by organizations in order to understand what
people want and their consumptions. Additionally, the study of consumer behaviour asseses
the influence of family, friends and society on consumers (Elizabeth, & Lynn, 2014). The
organizations cannot achieve success in their respective businesses if they fail to meet the
requirements of the consumer.

Consumer behaviour may be carried out in the following

Need Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Post-Purchase Decision

Importance of consumer behaviour to marketers

1. To understand Buying Behaviour of consumers

The study of consumer behaviour helps marketers to recognize and forecast the purchase
behaviour of the consumers while they are purchasing a product. The study of consumer
behaviour helps the marketers not only to understand what consumer's purchase, but helps to
understand why they purchase it (Hausman, 2000). Moreover, other questions like how,
where and when they purchase it are also answered. The consumption and the reasons behind
disposition of that particular product or services help marketers to be fully aware of the
product that is marketed. The consumer behaviour studies also help marketers to understand
the post purchase behaviour of the consumers.

2. To create and retain customers though online stores

Consumer behaviour is of most importance to marketers in business studies as the main aim
is to create and retain customers. If the consumers are satisfied with the product, he or she
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will buy the same product again. Therefore, the product should be marketed by markers in
such a way that convince customer to buy the product. Thus, creating customer and the
retaining those customers are important.

3. To understand the factors influencing Consumer's buying Behaviour

It is important for marketers to consider the factors that affect the buying behaviour of
consumer before entering the market. There are many factors that can influence the purchase
decision of consumers such as social influence, cultural influences, psychological factors and
personal factors. Understanding these factors helps marketers to market the product on right
time to the right consumers.

The marketers need to pay attention to cultural influences such as religion, values and norms
of the people or societies targeted and lifestyle of the targeted consumers. The marketers can
propose different strategies that convince the targeted consumers to buy marketed products or
services.

4. To increase the knowledge of sales person influence consumer to buy product

All the products and services marketed revolve around the behaviour of consumers and how
they will respond to them. Effective marketing of a product by sales people may help to
deliver right product to right people. Consumer behaviour deals with the knowledge of what
the consumers need and want to buy and what goods and services are available to satisfy their
needs. It is important for sales person to be fully aware of the customer's requirement so that
he or she could clearly communicate the benefits of the product to the customers. The sales
people must be fully aware of the consumer's behaviour in different situations so that they
could help them in meeting their demands and satisfaction.

5. To understand the consumer's decision to dispose a product or services

Disposal of product involves throwing away of products by the consumers. Understanding

the consumer's behaviour about how and when consumers dispose a product, then marketers
or the companies can position themselves so that this behaviour could be limited.

If the product or services that have failed to deliver required or expected satisfaction by the
consumers, the product is disposed by the customers. For this, some marketers track the
follow up from the consumers so that they can gauge the reason behind failure of the product.
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6. To help marketers to optimize sale of product and create focused marketing strategies

The theories and concepts of Consumer behaviour help marketers to optimize their sales and
to create efficient marketing strategies. These theories provides marketers with information
on the consumer's behaviour to spend money, likely causes that incline them to spend more
money on a product, and these help to plan strategies that should be practiced by the
marketers for successful marketing of a product.

Consumer versus Organisational Buying Process

Consumer buying is the sum total of a consumer's attitudes, preferences, intentions, and
decisions regarding the consumer's behaviour in the marketplace when purchasing a product
or service while organization buying is the decision-making process by which formal
organizations establish the need for purchased products and services and identify, evaluate,
and choose among alternative brands and suppliers (Balasubramanian, Raghunathan, &
Mahajan, 2005). There is a large difference, however, in how and why an organization
purchases goods and services versus how an individual shops. These differences include:

1. Reason for purchasing goods.

Organizations purchase goods to use in their ongoing operations and to resell to
consumers, while consumers purchase goods for their personal use.
Organizations also purchase more raw materials, such as wood, steel and other items
used in manufacturing, than individuals who don't have the tools or knowledge to put
those raw materials to use as a product.
Organizations generally purchase goods driven by customer demand and need for
manufacturing materials. Consumers, on the other hand, are driven both by need and
by want.
It is possible to entice a consumer to purchase something he does not need through
effective marketing or peer pressure, but it is much harder to entice an organization to
buy an un-needed product, especially when dealing with a purchasing department that
is accountable for what it spends.
2. Bulk Buys.
Organizations often purchase in bulk, whereas consumers typically do not. The
organizational market is thus more condensed i.e. a business can succeed catering only to a
small number of organizational clients, while businesses that typically focus on consumers
sell smaller quantities to more people.
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3. Choices and Use.

Consumers typically purchase goods for different reasons than organizations and have more
freedom in choosing the items they want. An individual may purchase a chair so people can
sit comfortably in their home. They can choose any chair within their budget. On the other
hand, an organization may purchase a chair needed by a new employee. Restrictions exist in a
chair purchase, not only by the budget set by a purchasing manager, but also by guidelines set
by the Occupational Health and Safety Administration (OSHA), and by company-wide
guidelines on office furniture.
4. Planning
Most purchases made by a business are planned in advance, where the same purchases might
be impulse buys for a consumer.
5. Decision-making
In many cases, the consumer decision-maker is the person that ultimately buys the product. A
business purchasing process starts with an idea and then goes through a formal approval
process. The person that makes the final purchase is often a purchasing agent or departmental
representative.
6. Support
Many businesses require support contracts when purchasing certain types of items. For
example, if a business purchases a copier then the copier may need to have at least a three-
year warranty on the product before the company can finalize the purchase. A consumer is
not restricted by support needs when it comes to buying products however, support is still
important to a consumer. Adequate support for a product can be sufficient to an end
consumer as part of the final purchase contract. For a business, the support issues may need
to be spelled out in a more comprehensive manner.
7. History
The relationship between a vendor and a business can be a significant factor in the buying
decisions for the company. For example, if a business has an ongoing relationship with an
office supply store, then pricing contracts and dedicated support personnel can make the
relationship beneficial to the business. An individual consumer is encouraged to compare
prices and offers between companies.
Types of Consumer Buying Decisions

The types of consumer buying behaviour are determined by:

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Level of involvement in purchase decision. - Importance and intensity of interest in a

product in a particular situation.

Buyers level of involvement. - Determines they are motivated to seek information about a
certain products and brands but virtually ignores others.

1. Routine Response/Programmed Behaviour

The consumer buys low involvement, frequently purchased, low cost items which need very
little search and decision effort and are purchased almost automatically. Examples include
soft drinks, snack foods, milk etc.

2. Limited Decision Making

The consumer buys product occasionally. And also needs to obtain information about an
unfamiliar brand in a familiar product category, perhaps. It requires a moderate amount of
time for information gathering. Examples include buying clothes. The product class is known
but not the brand.

3. Extensive/Complex Decision Making

The consumer has high involvement in the decision-making process because the product is
unfamiliar, expensive and/or infrequently bought. There is a high degree of
economic/performance/psychological risk. Examples include cars, homes, computers,
education. They require alot of time when seeking information and deciding.

4. Impulse Buying

The consumer makes a purchase with little to no thought or planning involved. In most
instances this happens with low-priced items, for example buying chewing gum when about
to leave the supermarket.

Other Types of Consumer Purchase Decisions

Consumers are faced with purchase decisions nearly every day. But not all decisions are
treated the same. Some decisions are more complex than others and thus require more effort
by the consumer. Other decisions are fairly routine and require little effort. In general,
consumers face four types of purchase decisions:

1. Minor New Purchase these purchases represent something new to a consumer but in the
customers mind is not a very important purchase in terms of need, money or other reason
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2. Minor Re-Purchase these are the most routine of all purchases and often the consumer
returns to purchase the same product without giving much thought to other product
options

3. Major New Purchase these purchases are the most difficult of all purchases because the
product being purchased is important to the consumer but the consumer has little or no
previous experience making these decisions. The consumers lack of confidence in
making this type of decision often requires the consumer to engage in an extensive
decision-making process.

4. Major Re-Purchase - these purchase decisions are also important to the consumer but the
consumer feels confident in making these decisions since they have previous experience
purchasing the product.