Marketing Marketing Analysis:Analysis:

Consumer Buyer Consumer Buyer BehaviourBehaviourJonathan FreemanJonathan Freeman

Buyer Behaviour Buyer Behaviour

GoalsGoals To understand:To understand:

ModelsModels of consumer purchase of consumer purchase decision processes.decision processes.

InfluencesInfluences on purchase on purchase decisions:decisions: WhatWhat HowHow

Marketing Marketing implicationsimplications of the of the models.models.

DefinitionsDefinitionsDibb, Simkin ,Pride and Dibb, Simkin ,Pride and

FerrellFerrell Consumer Buyer Behaviour:Consumer Buyer Behaviour:

““The decision processes and acts of The decision processes and acts of individuals involved in buying and individuals involved in buying and using products.”using products.”

Why do businesses need Why do businesses need to know about their to know about their

customers?customers?

Influence purchase probabilities.Influence purchase probabilities. Develop more effective or Develop more effective or

efficient marketing mixes.efficient marketing mixes. Identify market segments, Identify market segments,

emerging markets and emerging markets and competitive threats.competitive threats.

How do customers decide

what to buy?

One Relevant Question:

A Model of Consumer A Model of Consumer BehaviourBehaviour

Problem Recognition

Information Search

Evaluation of Alternatives

Purchase

Post-Purchase Evaluation

InternalSearch

Memory

ExternalSearch

Exposure

Attention

Comprehension

Acceptance

Retention

Stimuli:Marketer

Dominated& Other

Dissatisfaction Satisfaction

EnvironmentalInfluences

• Culture• Social Class• Personal• Family• Situation

IndividualDifferences

• Resources• Motivation & Involvement• Knowledge• Attitudes• Personality, Values & Lifestyle

INPUT INFORMATION PROCESSING

DECISION PROCESS INFLUENCES

From: Consumer Behavior (1994). James F. Engel, Roger D. Blackwell & Paul W. Miniard. 7th. Edition. Dryden Press.

A Model of the Buying A Model of the Buying Decision Process: Decision Process:

CONSUMERSCONSUMERSProblem Recognition

Information Search

Evaluation of Alternatives

Purchase

Post-Purchase Evaluation

Influences on the PDPInfluences on the PDP

Environmental InfluencesEnvironmental Influences

CultureCulture Social ClassSocial Class PersonalPersonal FamilyFamily SituationSituation

Individual DifferencesIndividual Differences

ResourcesResources Motivation & Motivation &

InvolvementInvolvement KnowledgeKnowledge AttitudesAttitudes Personality, ValuesPersonality, Values

& Lifestyle& Lifestyle

Marketing Influences:Marketing Influences:The Marketing The Marketing

Strategy.Strategy. 4Ps + TM4Ps + TM

ProductProduct PricePrice PromotionPromotion PlacePlace

integratedintegrated to serve a to serve a Target MarketTarget Market

Influences on the Influences on the ExtensivenessExtensiveness of the of the

BDPBDP

RiskinessRiskinessPersonal relevancePersonal relevance

TimeTime

Leads to a BDP Continuum

Buying Decision Buying Decision Process ContinuumProcess Continuum

ExtendedProblemSolving

Mid-RangeProblemSolving

LimitedProblemSolving

The full process may not be The full process may not be followedfollowed

Problem Recognition

Information Search

Evaluation of Alternatives

Purchase

Post-Purchase Evaluation

First Purchase.First Purchase.Extended Problem Extended Problem

SolvingSolving Involves all the stages of the PDPInvolves all the stages of the PDP Detailed & rigorousDetailed & rigorous Preconditions:Preconditions:

Involvement highInvolvement high Strong differentiationStrong differentiation Time availableTime available

First Purchase.First Purchase.Extended Problem Extended Problem

SolvingSolving Implications:Implications:

In marketing communications In marketing communications argumentation is likely to be argumentation is likely to be more effective than more effective than presentation.presentation.

Buyers are more likely to Buyers are more likely to notice brand differencesnotice brand differences

First Purchase.First Purchase.Limited Problem SolvingLimited Problem Solving

IS and EA stages limited or IS and EA stages limited or missedmissed

Preconditions:Preconditions: Constrained resourcesConstrained resources Low motivation/involvementLow motivation/involvement Limited perceived Limited perceived differentiationdifferentiation

First Purchase.First Purchase.Limited Problem Limited Problem

Solving Solving Implications:Implications:

When involvement is low presentation When involvement is low presentation is more effective than argumentation.is more effective than argumentation.

Search limited to known brands; Search limited to known brands; unknown brands are doomed.unknown brands are doomed.

Distribution and POP advertising Distribution and POP advertising crucial.crucial.

Satisfaction leads to habitual Satisfaction leads to habitual purchase out of inertia.purchase out of inertia.

First Purchase.First Purchase.Mid-Range Problem Mid-Range Problem

SolvingSolving Between EPS and LPSBetween EPS and LPS

Buyer Decision Buyer Decision Process: Model and Process: Model and

ContinuumContinuum

PR IS EA P PPE

PR is ea P PPE

EPS

MRPS

LPS

Habit

PR is ea P PPE

PR P PPE

Buyer Decision Buyer Decision Process: Process: DYNAMICSDYNAMICS

PR IS EA P PPE

PR is ea P PPE

EPS

MRPS

LPS

Habit

PR is ea P PPE

PR P PPE

All else equal, the tendency is for

decision-makingto become habituated

with repetition.

Buyer Decision Buyer Decision Process: Strategic Process: Strategic

ImplicationImplication

PR IS EA P PPE

PR is ea P PPE

EPS

MRPS

LPS

Habit

PR is ea P PPE

PR P PPE

There’s an advantageto being first in a

new market.

Repeated PurchasesRepeated Purchases Repeated Repeated purchasingpurchasing tends to tends to

habitual decision-makinghabitual decision-making

However, repeated However, repeated problem-problem-solvingsolving can occur e.g. when: can occur e.g. when:

Buyer dissatisfiedBuyer dissatisfied Supplier is out of stockSupplier is out of stock

Habitual Decision-Habitual Decision-MakingMaking

Reflects either Brand Loyalty or Reflects either Brand Loyalty or InertiaInertia

Brand LoyaltyBrand Loyalty Reflects High involvement and Reflects High involvement and

perceived differentiationperceived differentiation Highly desired by marketers!Highly desired by marketers!

InertiaInertia Brand switching easily induced by Brand switching easily induced by

price competition or new claim price competition or new claim from competitorsfrom competitors

Special Categories of Special Categories of Purchase DecisionsPurchase Decisions

Impulse buyingImpulse buying Variety-seekingVariety-seeking

Models can be diagnostic.Models can be diagnostic.

Problem Recognition

Information Search

Evaluation of Alternatives

Purchase

Post-Purchase Evaluation

Period2

Period1

% of Potential Marketat each Stage

20

15

10

5

5

30

25

25

5

5