Free Consumer Behaviour Literature Review

| October 20, 2011

CONSUMER BEHAVIOUR THEORIES

 1.      LITERATURE REVIEW

Consumer Behaviour Christopher (1989) studied the shopping habits of consumers to form an idea of whether or not the store concepts, product ranges and strategies of the companies are appropriate towards consumer requirements. He believed that consumer behaviours are unpredictable and changing continuously changing; while trying to under try to understand how individual or group make their decision to spend their available resources on consumption-related items. These are factors that influence the consumer before, during, and after a purchase (Schiffiman and Kanuk, 1997), for example, feedback, from other customers, packing, advertising, product appearance, and price (Peter & Olsonetc, 2005).

The essence of this approach is critical for organisational success, so that they can have a better understanding of their customer behaviours (Solomon et al., 2006). The physical action or behaviour of consumer and their buying decision every day can be measured directly by marketers (Papanastassiu and Rouhani, 2006). For that reason many organisations these days are spending lot of their resources to research how consumer makes their buying decision, what they buy, how much they buy, when they buy, and where they buy (Kotler, Amstrong, 2001).  To get a well coherent result, organisations normally looked at these behaviour base their analysis on difference conceptions; whether customers buying behaviour were measured from different perspectives, such as product quality and better service, lower price structured etc (Papanastassiu and Rouhani, 2006)

Different theories and researchers have claimed that when organisation fully meet all aspects of its customer needs, the result enhances their profitability (Chaudhuri, 2006), and also enable them to develop a better tackling strategies for consumer (Asseal, 1998).  Possibly, the most challenging concept in marketing deals with the understanding why buyers do what they do and what method or philosophy are they using to evaluate the product after the transactions and what might be the effect on future transaction (Schiffman, 2004). The reason why marketer chooses to learning about consumers” buying behaviour is, from a business perspective; to be able to be more effectively reach consumers and increase the chances for success (Sargeant & West, 2001). Therefore the field of consumer behaviour has take a tremendous turn in the commercial world and became the fundamental concepts of achieving company goal (Schiffman and Kanuk, 2007).

More recently, different researchers and author have given their definition and meaning of consumer behaviour. For Michael R. Solomon (2001) consumer behaviours typically analyse the processes of group selected or individual purchases/dispose of product, service, concept or experiences to satisfy their need and desires. Additionally, Kotler (1996) suggested that consumer behaviours have a huge impact in a firm marketing decision making process every year. There is a risk that what a consumer does will inflict on his or her behaviour and generate consequences. (Snoj, Pisnik Koda & Mumel, 2004). The user and the purchaser can be different person, in some cases; another person may be an influencer providing recommendations for or against certain products without actually buying or using them (Solomon 1999; Solomon et al. 1999).

In this case, most of the large consumer electronics retailers tend to gathered more information about customers motivating factors and what influences their buying behaviours Solomon & Stuart (2000).

To get in-depth understanding consumer behaviour concepts will gives us an idea on how its plays significance role in our life and in the whole trend of business profit to various firms which will allow the researcher to get the analysis and determine product positioning, develop the message and targeting strategy in order to reach to the market (Holskins J, 2002). Consumer behaviour involves lot aspects, such as;

Complex Buying Behaviour

This kind of buying behaviours significantly involved the consumers when making a purchase decision. This kind of buying behaviours demand consumer to highly involve within the process. In case of high involvement, consumers distinguish salient differences among the competing brands (Kotler, Wong, Saunders, Armstrong, 2005). This phenomenon is particularly essential for Dixons consumers to highly involve, and engage in extensive research about the product category and make a good purchase decision about the firm own manufacturing products, in case they invent a new technology electronics products or audio-video equipment that is too expensive.

 

Dissonance reducing buying behaviour

This type of buying behaviour also has high consumer involvement. In terms of expensive and infrequent purchase, consumer also undergoes reducing dissonancy behaviour.  It is extremely difficult for consumers to differential among brands in this type of buying behaviours (Kotler, Wong, Saunders, Armstrong, 2005). Differentiating Dixons electronics products/equipments in the same store from PCWorld or Currys is a daunting task and consumer buying these products may encounter dissonance reducing buying behaviour, as electronics are usually expensive and self-expressive. Consumer may easily assume that the available electronics brands in the store/market within a certain price range to be of the same quality. Then if the product does not meet customers’ expectations, it will result to consumer to experience post purchase dissonance (after sales discomfort) (Kotler, Wong, Saunders, Armstrong, 2005).

Habitual Buying Behaviour

Contrariwise, in this type of buying behaviour consumers have lesser levels of involvements.  It implies that consumer do not have to bother to retrieved information about the available products and brands in the market. So therefore, there are no potential differences between the different brands. Whether this factor will have damaging effects on Dixons will be analyse at the findings and analysis chapter below. Because of the less level of involvement, in habitual buying behaviour consumers don’t often go to the stores to purchase product, (Kotler, Wong, Saunders, Armstrong, 2005).

However, some believed that if the consumer persistently purchasing the same product repeatedly, it becomes habit and their mindsets and perceptions changes overtime about the brand and the provider (Cohen and Manion, 1987). This conception will portray the consumer to have unconscientiously developed a brand loyalty to that particular brand due to the consumer regular buying habits (Cohen and Manion, 1987).

Variety Seeking Buying Behaviour

This type of consumer level of involvement is low. However consumer may became critical in terms of brand differences. Additionally, consumer may easily switch from PCWorld to Currys i.e. from one brand to another. The consumers can now have beliefs about the various brands and choose a brand without much evaluation. But they evaluate that product at the time of purchase. In this high technology world, consumer switches their brands not because of dissatisfaction but because of that enormous trend of technological equipment (Aaker, 1991).

1.2 Decision making

The concept of decision making perceived by buying behaviour as a problem-solving activity that consumer undergo to solve different problems. The stages include; need recognition, striving for information, evaluates the alternative, purchase decisions, and post-purchase evaluations.

Consumer decisions making can sometimes be confusing and relate to many ideas and beliefs. There are numerous perspectives of consumer decision making that include the ‘cue utilisation theory’, value perspective, emotional perspective, and information processing perspective.

  • Value perspective

This emphasises a trade-off circumstances (Lunn et al, 1997). The common value terms often involve in the trade-off between quality and price, which also may also be defined the ‘value-for-money between quality and price, which also may defined the ‘value-for-money perspective (Change and Wildt, 1994; Hansen, 2001; Sweeney and Soutar, 2001). Zeithaml (1988) and Levy (1999) purpose that consumers are ‘value driven’. Zeithaml (1988) claims that customer’s  perceived value may be seen as a reacting of the overall evaluation of the consumption of a product or service based on perceptions of what is received and what is given.

On the other hand, the value emerges partly from what consumers perceive they are receiving and partly from what consumers perceived they are giving.

Moreover, Blackett and Robins (2001) consistently said that the key drivers of demand for products are awareness/familiarity, perceived quality, sales quality and price. These tool drivers influence the perception of customer in term of the decision making. .

  • Cue utilization theory

This phenomenon allowed consumer to judge the quality and multiplicity of different product when deciding what to purchase and how many.  Hansen (2005) opined that, perhaps it might be extremely hard for consumers to evaluate the essence of different in quality aspects in relation to each other and in relation to requirement or intention to consumer the products.

This has led consumers to encounter instabilities when making judgements about product quality, but may not have sufficient of time or the motivation to the considered products’ comparative. Attempting to overcome their uncertainty and the shortage of information, following the ‘cue utilization theory’ (Olson and Jacoby, 1972), consumers may select one or more indicators (cues or stimuli) to help their judgement of the product quality. A number of cues are studied in many researches. In judging the product quality, these cues can be used to indicate, including ‘country of origin’ (Eliot and Cameron, 1994), ‘product composition’ (Olson, 1972), ‘brand name’, ‘store name’ (Dodds, 1995) and ‘price’ (Shapiro, 1973; Brooker et al., 1986). As mentioned in the cue utilisation theory, consumers try decrease risk by applying cues (e.g. brand name, price, colour, advertising, etc) as a way of determining the service or the product quality. Thus, the reliance on one or one or more cues is a risk-reduction strategy (Hansen, 2005).

Dawar and Parker (1994) depicted that cues assist consumers to determining the quality of the product when there is a need to reduce the perceived risk of purchase and when consumer involvement is low. ‘Low-involved’ consumers use simple decision ways or indicators in their assessments to the quality or the overall performance of a product. In contrast, the behaviour of ‘high-involved’ consumers are analysed and described on the basis of the information processing perspective.

  • Information processing perspective

The information processing perspective indicated that consumer act as problem-solving ‘cognitive’ individual researching for a reasoned decision (Kassarjian, 1981).

Dubois (2000) describes that  consumers are expected to apply their cognitive resources in creating ‘beliefs’ (cognitive part) about the attribute of a product, which may result of the progression of an overall feeling (affective part) in the sense of liking/disliking product. Consumers with a positive ‘attitude’ to a product are expected to be more willing to consider purchasing in (cognitive part) than consumers with less positive attitude to the same product.

Emotional perspective Emotion is not the response of an evaluation process in buying a product, but it is an effective reaction to consumers’ perceptions of stimuli in the environment. It represents an effective view of consumer behaviours and it is caused by consumers’ appearance to particular stimuli (Bagozzi et al., 1999). Zajonc and markus (1982) discussed   that the ‘traditional’ cognitive view should be complemented by determining consumers’ affective responses, like the emotional responses to the perception and assessment of products and experiences. Consumer involvement also influences to emotion perspective and product evaluations.

Peter et al (1999) debated that if product involvement is high, people may experience stronger affective reaction such as emotions and stronger feelings.

1.2.1        Additional Factors on  Decision Making

There are many other causes that have tremendous effect on consumer decision making process, such as perceptions and attitudes.

Perceptions

Perceptions take consumers to the process of selecting, organising, and interpreting stimuli to a meaningful and coherent picture of the world (Schiffman and Kanuk (2007).

Because there are so many marketing stimuli, consumers need to limit the information of product that will have an effect on the decision making. Bolfing (1988) also purposed that there are plenty of customers that have ‘perceptual vigilance’ which is the stage of being screening information that is relevant. On perception process, customers express their own final perception using their consuming behaviour.

 

 

Attitudes

In the purchase stage, there is attitude in the consumers’ mind. Without attitude, an alternative brand may be purchased (Fazio et al. 1989). Good attitude towards the product might move to a purchase decision. Attitude is connected to behavioural intention and buying forecast (Fishbein, 1980). Attitude is what we can feel about a concept that could be a person, a brand, a category, an ideology or other things we can think about and applying feeling into (East, 1997). Many writers agree that attitude is an evaluation. Attitudes are individuals’ broad evaluations of a concept or subjective assessments of an idea (Kotler and Armstrong, 2001). Attitude can be the most important factor in consumer decision process because they theoretically conclude that a consumer evaluation of an object (product, brand or company) represent positive or negative feeling and behavioural towards the object (Belch and Belch, 1998). Attitude influences each stage of the buying decision, as the simple assumption that attitudes causes behaviour to ignores other determinants such as personality traits, self-image, motives, behaviour and the social and physical setting in which the action occurs (Foxall, 1998).

1.3 Consumer Buying Behaviour

Consumer purchasing behaviour tends to determine what it exactly is that drives consumers when making buying decisions. Many studies have been performed including the above mentioned with regard to consumer behaviourism. Three theories those understand the consumers’ buying decision are; radical, teleological, and picoeconomics behaviourism (Foxall, 2007). Even though, all three theories take their own the consumers’ choice, “they still plays complementary role with consumer behaviour”.

1.3.1 Radical Behaviourism

According to Foxall, (2007) refer to the radical behaviourism as Behavioural Perspective Model (BPM), see diagram below.

Figure 1 Summative Behavioural Perspective Model (Foxall, 2007: 136)

On the one hand Figure 1, depicts two inputs of consumer behaviour, namely the behaviour setting and the learning history. These two input variables can be seen as the consumer’s frame of reference when making a buying decision. The behaviour setting “consists of all the physical, social and temporal elements that signal the likely consequence of behaving in a particular way” (Foxall, 2007: 136).

The learning history refers to past experiences – both positive and negative – of the consumer. Additionally, it accounts for personal factors influencing the consumer’s choice, such as: the ability to pay, consumers’ mood, impulsive buying and deprivation. On the other hand, three possible consequences of consumer behaviour are depicted in Figure 1, respectively; utilitarian reinforcement, informational reinforcement and aversive consequences. Utilitarian reinforcement refers to the satisfaction consumers perceive when buying, owing and consuming economic goods. Informational reinforcement as an outcome of consumer behaviour relates to the feedback on the purchase which connects the consumers’ choice to the social status that comes with it.

Of course the informational reinforcement outcome is not applicable to every product that can be bought, as one will not obtain any social status from buying nails for example, on the other hand, people are often judged by the car they drive, making cars an excellent example of the informational reinforcement. Lastly, aversive consequences can be described as the costs of consuming; having to wait in line, not being able to buy alternative products, relinquishing money, etc. (Foxall, 2007). Based on the level of informational and utilitarian reinforcement a grid can be composed that divides consumer behaviour in four broad categories, Maintenance purchases are characterized by necessity; therefore this category can be compared to the physiological level in Maslow’s hierarchy of needs, which stands for the basic requirements for human survival (Maslow, 1943). Accumulation purchases refer to consumer behaviour related to certain kinds of collecting, saving and instalment buying. Hedonism or pleasure purchases refer to the consumption of popular entertainment.

Finally, accomplishment purchases reflect one’s social and economic success, such as: “acquisition and conspicuous consumption of status goods, displaying products and services that signal personal attainment” (Foxall, 2007: 136). Foxall (2007) found that green consumer behaviour cannot be linked to a specific category but can be found in any of the four categories.

1.3.2 Teleological Behaviourism

“Teleological behaviourism proposes an interpretation of complex behavior based on final causes, i.e., the consequences of behaviour” (Foxall, 2007: 132). Final causes extend outwards from the person who behaves, each fitting in the next pattern (Foxall, 2007). Hence, making a sum fits into doing homework, which fits into taking the math class, which fits into studying, which in turn fits into providing yourself with a good future. Every step (cause) is wider than the previous one and therefore more embracing, making each cause more final (Rachlin, 1994). “The process of finding the causes of behaviour is one of fitting the behaviour into an ever- increasing molar pattern of response and consequences” (Foxall, 2007: 132).

Rachlin (1994) states that mind equal behaviour and   sequences or patterns of behaviour rather than single acts. This implies that mental phenomena such as intentions, attitudes as well as pain are all defined as extended patterns of behaviour. When pain is taken as an example, people know that somebody else is in pain because of the behaviour the other person emits: grimacing, groaning, holding his arm, etc. (Foxall, 2007). “A whole series of final causes may each be nested within one another, diffused over time, the whole sequence being necessary to a full explanation of the behaviour that produced them” (Foxall, 2007: 132).

Rachlin (1994) points out that   in order to understand the full complexity of behaviour’s consequences, a significant elapse of time may be required, as the events that explain behaviour are temporarily extended, it will take time for the whole sequence to be completed and with that understand behaviour. When it comes to consumer buying behaviour, teleological behaviourism helps understanding consumer’s brand choice (Foxall, 2007). Teleological behaviourism helps to understand why consumers only consider only a few brands out of all the brands they can choose from when making a buying decision (Foxall, 2007).

Consumers will only consider brands of which they have direct use-knowledge and which products characteristics show the greatest match compared to the consumer’s spending power. Teleological behaviourism also helps understanding why consumers change patterns and decide to buy another brand than they usually do. It does so by acknowledging the conflict consumers can face between utilitarian reinforcement and informational reinforcement.

1.3.3 Picoeconomics

Both radical behaviourism and teleological behaviourism help to understand consumer behaviour, but both are not complete explanations of it, especially when it comes to breaking of patterns. Up to a certain extend teleological behaviourism provides an explanation for the breaking of patterns, as explained in the previous paragraph.

However, picoeconomics provides a much better explanation when it comes to intertemporal bargaining. The concept of picoeconomics acknowledges that a person’s choice is based on more factors than just the person’s preference (Foxall, 2007). Picoeconomics apply the concept of intrapersonal “interests” to explain the conflict between behaviours which occurs from intertemporal rewards (Foxall, 2007). How an individual prioritizes the rewards available depends on personal rules. However, seldom such a trade-off between short-term (smaller sooner) and longterm (larger later) is isolated from other choice conflicts (Foxall, 2007). Therefore an individual might adopt a strategy in which he/she bundles all the short-term and long-term rewards, also known as reward bundling, which is a means of self-control. Self-control results from the consumer’s perspective that a single choice is possible between a bundle of long-term rewards and a competing bundle of short-term rewards (Foxall, 2007). Of which, as Foxall (2007) points out, directly relates to green consumer behaviour. The benefits of the long-term choice are always greater than the benefits of the short-term choice, to make a rational decision in which the total rewards obtained is the greatest is a matter bringing (imagining) the long-term rewards forward in time.

According to picoeconomics “there is a conflict of interests brought about by the differences in situation between the point at which an intention is expressed and that at which the opportunity to behave emerges” (Foxall, 2007: 141). This conflict originates due to incentives available to the consumer at the moment of purchase (Ainslie, Hofmeyr & Ross, 2010). When the opportunity to behave emerges the consumer has two choices, either he stays loyal to his buying pattern, or, the consumer changes his pattern based on a variable presented by the current behaviour setting.

A customer who has the intention to buy one particular electronic products/bran, might be tempted once entering the store to purchase either Dixon manufactured product or alternative that are on sales instead of the more expensive, also known as preference reversal. This is a typical situation where the consumer prefers a poorer pay-off (which might be temporarily) because it is available sooner, than a better long-term pay-off, which would be better for the consumer. Consumers apply this behaviour occasionally in the case of brand choice, but much more often at inter-product choices (Foxall, 2007).

This leads to the question why consumers apply this kind behaviour. Foxall (2007) argues that just as in radical behaviourism and teleological behaviourism, the consumer tries to maximize the totality of reinforcement available to him, both informational as utilitarian reinforcement. However, it need to be noted that consumers often do this with a short-term perspective and therefore maximize their reinforcement on each shopping trip, which might be not the maximum reinforcement that can be obtained when a longterm perspective is applied. The dilemma consumers face is a conflict between informational reinforcement (maximizing the price) and utilitarian reinforcement (ensure an acceptable level of quality). However, this does not mean that consumers will always buy the cheapest product available. The usual consumer strategy is to: (1) select a suitable consideration set on basis of both reinforcements and experience; and (2) usually selects the least expensive option within the consideration set (Foxall, 2007).

 

 1.4 Consumer Decision

In electronics markets the consumer will make the decision to purchase technological products to fulfil and satisfy their desire. Also, there are several factors that can influence consumer to select which product they will use for provide their needs, such as;

1.4.1 Social influences

According to Boone and Kutz (2006) they have stated on this point that in every consumer belong to the each social group. As earlier mostly experience can come from a group of family, neighbourhood groups, work and community. Also, a group membership can influences individual’s purchase decision by values, attitude and behaviour that a group deems appropriate for its member. Hence, many consumers are often strongly making decision by people who the consumer knows and trusts.

 1.4.2 Economic Man

Many marketers understand consumer behaviour from economics. Especially, the assumption between people and rational in their behaviour by identified the behaviour that relating to price, consumer income, consumer taste, and quality of products. Therefore, the demand of medicine is positivity associated with low price of medicine, high price for products substitutes (high level of consumer income, high education, high tastes). Also, the quality of products included with services.

1.4.3 Personal Influences

Each person is driven by variety of desires and pressures that influence behaviour by values, attitudes, personality and beliefs. This could help marketer expected the personal influence from the field of psychology.

Personality and self concept that in each person’s distinct personality influences his/her buying behaviour because the personality refers to unique psychological in each person. Thus, personal characteristics have relative to buying behaviour on our decision making and   personality can be useful for marketer to analysing consumer behaviour for certain products or select their choice (Armstrong and Kotler, 2008). Buying Behaviour The  marketers can better predict how consumers will respond to marketing strategies. Also, they need to understand the decision processes and acts of people involved in buying and using products

Solomon (1991) stated that a consumer decision is a response to a problem. Schiffman and Kanuk (1978) depicted that decision is the selection of an action from two or more alternative choices. It means that there must be more that one alternative choice whenever a customer is making a decision. Kotler (1996) pointed out that the consumer buying process is the sum total of alternative, purchase decision, and purchase evaluation.

1.5 DECISION MAKING PROCESS

The decision making process can be used to analysed consumer purchasing decision of certain product that required enormous level of engagement from a customer (Kotler & Armstrong, 2002). The diagram below gives a brief explanation of consumer decision making process.

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