Consumer behaviour is the study of when, why, how, and where people do or do not buy a product. It blends elements from psychology, sociology, social anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general.
Customer behaviour study is based on consumer buying behaviour, with the customer playing the three distinct roles of user, payer and buyer. Relationship marketing is an influential asset for customer behaviour analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer. A greater importance is also placed on consumer retention, customer relationship management, personalisation, customisation and one-to-one marketing. Social functions can be categorized into social choice and welfare functions.
Each method for vote counting is assumed as social function but if Arrow’s possibility theorem is used for a social function, social welfare function is achieved. Some specifications of the social functions are decisiveness, neutrality, anonymity, monotonicity, unanimity, homogeneity and weak and strong Pareto optimality. No social choice function meets these requirements in an ordinal scale simultaneously. The most important characteristic of a social function is identification of the interactive effect of alternatives and creating a logical relation with the ranks. Marketing provides services in order to satisfy customers. With that in mind, the productive system is considered from its beginning at the production level, to the end of the cycle, the consumer (Kioumarsi et al., 2009).
| ENVIRONMENTAL FACTORS | BUYER'S BLACK BOX | BUYER'S RESPONSE | ||
|---|---|---|---|---|
| Marketing Stimuli | Environmental Stimuli | Buyer Characteristics | Decision Process | |
| Product Price Place Promotion |
Economic Technological Political Cultural Demographic Natural |
Attitudes Motivation Perceptions Personality Lifestyle Knowledge |
Problem recognition Information search Alternative evaluation Purchase decision Post-purchase behaviour |
Product choice Brand choice Dealer choice Purchase timing Purchase amount |
The black box model shows the interaction of stimuli, consumer characteristics, decision process and consumer responses.[1] It can be distinguished between interpersonal stimuli (between people) or intrapersonal stimuli (within people).[2] The black box model is related to the black box theory of behaviourism, where the focus is not set on the processes inside a consumer, but the relation between the stimuli and the response of the consumer. The marketing stimuli are planned and processed by the companies, whereas the environmental stimulus are given by social factors, based on the economical, political and cultural circumstances of a society. The buyers black box contains the buyer characteristics and the decision process, which determines the buyers response.
The black box model considers the buyers response as a result of a conscious, rational decision process, in which it is assumed that the buyer has recognized the problem. However, in reality many decisions are not made in awareness of a determined problem by the consumer.
Once the consumer has recognised a problem, they search for information on products and services that can solve that problem. Belch and Belch (2007) explain that consumers undertake both an internal (memory) and an external search.
Sources of information include:
The relevant internal psychological process that is associated with information search is perception. Perception is defined as "the process by which an individual receives, selects, organises, and interprets information to create a meaningful picture of the world".
The selective perception process
Stage Description
The implications of this process help develop an effective promotional strategy, and select which sources of information are more effective for the brand.
At this time the consumer compares the brands and products that are in their evoked set. How can the marketing organization increase the likelihood that their brand is part of the consumer's evoked (consideration) set? Consumers evaluate alternatives in terms of the functional and psychological benefits that they offer. The marketing organization needs to understand what benefits consumers are seeking and therefore which attributes are most important in terms of making a decision.
Once the alternatives have been evaluated, the consumer is ready to make a purchase decision. Sometimes purchase intention does not result in an actual purchase. The marketing organization must facilitate the consumer to act on their purchase intention. The organisation can use variety of techniques to achieve this. The provision of credit or payment terms may encourage purchase, or a sales promotion such as the opportunity to receive a premium or enter a competition may provide an incentive to buy now. The relevant internal psychological process that is associated with purchase decision is integration.Once the integration is achieved, the organisation can influence the purchase decisions much more easily.
The EKB model was further developed by Rice (1993) which suggested there should be a feedback loop, Foxall (2005) further suggests the importance of the post purchase evaluation and that the post purchase evaluation is key due to its influences on future purchase patterns.
Consumer behaviour is influenced by: demographics, psychographics (lifestyle), personality, motivation, knowledge, attitudes, beliefs, and feelings. Consumer behaviour concern with consumer need consumer actions in the direction of satisfying needs leads to his behaviour of every individuals depend on thinking
Consumer behaviour is influenced by: culture, sub-culture, locality, royalty, ethnicity, family, social class, past experience reference groups, lifestyle, market mix factors.