Understanding Consumer Buying Behavior

1. Consumer Buying Behavior

Consumer buying behavior refers to the decisions and actions people undertake to buy products or services for personal use. In other words, it’s the actions you take before buying a product or service, and as you will see, many factors influence that behavior.

big idea

You and all other consumers combine to make up the consumer market. The way you make those decisions is significant for marketers because if they can understand why you buy what you buy and when you buy it, they can use that information to boost revenue.

term to know

Consumer Buying Behavior

The decisions and actions people undertake to buy products or services for personal use.

1a. Stimulus-Response Model

As illustrated in the model shown in the image below, consumer buying behavior is based on stimuli coming from a variety of sources—from marketers in terms of the 4Ps (product, price, promotion, and place), as well as from environmental stimuli, such as economic factors, legal/political factors, and technological and cultural factors. The model is known as the stimulus-response model because each stimulus or event creates a response or reaction from the consumer.

key concept

These stimuli go into your “black box,” which consists of two parts: buyer characteristics such as beliefs and attitudes, motives, perceptions, and values, and the buyer decision-making process, which is covered later. Your response is the outcome of the thinking that takes place in that black box. What will you buy, where, when, how often, and how much?

Marketing stimuli are driven by marketers and include product design and positioning, pricing tactics and responses to competitors, distribution and channel partner relationships, and promotion offerings and experiences that convince consumers to purchase an offering. Environmental stimuli are events that occur related to economic, legal/political, technological, and cultural factors.

• Economic event examples include a recession, inflation, and increased taxes.
• Examples of legal/political factors include decreased access to global markets and diverse products, disruptions in supply chains due to international disputes, and increased trade barriers between nations.
• Technological examples include increases in access to mobile and other devices, broadband, and increased use of social media and e-business in all markets.
• Cultural factors include changes in preferences for products from some nations, increased openness to diversity, and acceptance of new ways of living, buying, and working.

key concept

Buyer characteristics include demographic, psychographic, geographic, and behavioral descriptors. The buyer decision-making process consists of the five stages of need recognition/problem awareness, information search, evaluation of alternatives, purchase, and post-purchase evaluation. Buyer responses are the actions consumers take based on stimuli, their characteristics, and their buyer decision-making process: making a choice about a product or brand, selecting a retailer or dealer from which to purchase the product, the timing or when to purchase the goods, the price or quantity of the goods, and how frequently to purchase an offering.

terms to know

Stimulus-Response Model

A model that illustrates that consumer buying behavior is based on stimuli coming from a variety of sources—from marketers in terms of the 4Ps, as well as from environmental stimuli, such as economic factors, legal/political factors, and technological and cultural factors.

Marketing Stimuli

Stimuli that are driven by marketers and include product design and positioning, pricing tactics and responses to competitors, distribution and channel partner relationships, and promotion offerings and experiences that convince consumers to purchase an offering.

Environmental Stimuli

Events that occur related to economic, legal/political, technological, and cultural factors.

Buyer Decision-Making Process

The Five stages of need recognition/problem awareness, information search, evaluation of alternatives, purchase, and post-purchase evaluation.

Buyer Responses

The actions consumers take based on stimuli, their characteristics, and their buyer decision-making process.

1b. Types of Consumer Buying Behavior

Buying behavior is not influenced solely by the external environment. It’s also determined by your level of involvement in a purchase and the amount of risk involved in the purchase. There are four types of consumer buying behavior: complex buying behavior, dissonance-reducing buying behavior, habitual buying behavior, and variety-seeking buying behavior.

Complex buying behavior occurs when you make a significant or expensive purchase, like buying a new car. Because you likely don’t buy a new car frequently, you’re highly involved in the buying decision, and you probably research different vehicles or talk with friends or family before reaching your decision. By that time, you’re likely convinced that there’s a significant difference among cars, and you’ve developed your own unique set of criteria that helps you decide on your purchase.

Dissonance-reducing buying behavior occurs when you’re highly involved in a purchase but see little difference among brands. Let’s say you’re replacing the flooring in your kitchen with ceramic tile—another expensive, infrequent purchase. You might think that all brands of ceramic tile in a certain price range are “about the same,” so you might shop around to see what’s available, but you’ll probably buy rather quickly, perhaps as a result of a good price or availability. However, after you’ve made your purchase, you may experience post-purchase dissonance (also known as buyer’s remorse) when you notice some disadvantages of the tile you purchased or hear good things about a brand you didn’t purchase.

Habitual buying behavior has low involvement in the purchase decision because it’s often a repeat buy, and you don’t perceive much brand differentiation. Perhaps you usually buy a certain brand of organic milk, but you don’t have strong brand loyalty. If your regular brand isn’t available at the store or another brand is on sale, you’ll probably buy a different brand.

Variety-seeking buying behavior has the lowest customer involvement because brand switching is your norm. You may not be unhappy with your last purchase of tortilla chips, but you simply want to try something new. It’s a matter of brand switching for the sake of variety rather than because of dissatisfaction with your previous purchase.

terms to know

Complex Buying Behavior

Occurs when you make a significant or expensive purchase, like buying a new car.

Dissonance-Reducing Buying behavior

Occurs when you’re highly involved in a purchase but see little difference among brands.

Habitual Buying Behavior

Behavior that has low involvement in the purchase decision because it’s often a repeat buy, and you don’t perceive much brand differentiation.

Variety-Seeking Buying Behavior

Behavior that has the lowest customer involvement because brand switching is your norm.

1c. Marketing to High Involvement Buyers

High levels of involvement tend to occur when a product or service offers differentiated features and benefits, provides extensive information about the design, offers exceptional after-sale service, carries a higher than average risk to the buyer, is associated with a high price, and occurs when the consumer has a high degree of brand recall and understanding of the value as shown in the image below. Marketers capitalize on these factors by customizing offerings to customers who are willing and able to spend more than the average customer and perceive the spend as more of an investment than an expense. Likewise, marketers also work closely with customers to co-create products and experiences that create a perception that the product and service are the beginning of an ongoing relationship between the company and the customer, with a focus on fine-tuning after sale-service to ensure that buyers are lifelong, loyal, and make extensive referrals to their friends and family.

big idea

The profit margin for high-involvement purchases allows the company to invest much of its sales into the ongoing relationship.

1d. Marketing to Low Involvement Buyers

Low levels of involvement tend to occur when a product or service is one of many competitive offerings, with limited differentiation between one brand and another. The product tends to provide common information on its packaging based on what the average user would like to know about its ingredients, risks, features, and benefits. The risk to the consumer is generally low and brand recall, while important to marketers, is frequently less important than price and special promotions. Marketers capitalize on these factors by providing loyalty programs to customers, highly designed point-of-purchase materials to channel partners like retailers, and build their marketing campaigns around a brand’s family of products and quality. The profit margin for low-involvement purchases does not generally allow the company to invest a significant amount of its sales into after-sales service and firms focus on consistency of quality and reliability so that the decision to purchase the product becomes repetitive based on brand trust. The image below shows low-involvement and high-involvement product examples.

REFERENCES

CEOpedia. (2023). High Involvement Product. Retrieved from ceopedia.org/index.php/High_involvement_product#google_vignette

Khetrum, P. (2021). Product Involvement. Repetitive Purchase. Retrieved from googleanalyticsthailand.com/2021/06/08/categorize-product-with-involvement-and-repetitive/

Mind Help. (2023). Consumer Behavior. Retrieved from googleanalyticsthailand.com/2021/06/08/categorize-product-with-involvement-and-repetitive/