Buyer Behaviour

Background:
Market:
The word ‘market’ is derived from the Latin word “Marcatus”
meaning goods or trade or a place where business is conducted.
Market refers to a physical location where buyers and sellers
gather to exchange their goods.

Types of Market:
• Service market: Examples:
o Hospitals (Doctors understand patient’s behaviour)
o Educational Institution (Teachers understand students’
behaviour)
• Product market – Examples:
o Selling Products (Manufacturer and seller understand
buyer behaviour).

Introduction:
Consumer behaviour is the study of individual, group or organisation
and all the activities associated with the purchase, use and disposal of goods
and services, including the consumer’s emotional, mental and behavioural
responses. Consumer behaviour emerged in the 1940s and 1950s as a distinct
sub-discipline in the marketing area. In order to succeed in today’s dynamic
and rapidly evolving marketplace, marketers need to know everything about
consumer – what they need, what they think, how they work, how they
spend their money and time.

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Meaning:
➢ Buyer – Buyer or consumer is a person who purchase goods and
services for his own personal needs.
➢ Behaviour – Behaviour can be defined as those acts of ‘individual’
which are directly involved in making decisions to spend their
available resource (Time, Money, Energy) in obtaining and using
goods and services.

Definitions and Explanations:

• Buyer Behaviour - Is the decision processes and acts of people
involved in buying and using products. Need to understand:
o Why consumers make the purchases that they make?
o What factors influence consumer purchases?
o The changing factors in our society.
➢ Buyer Behaviour – Buyer behaviour entails “all activities
associated with the purchase, use and disposal of goods and
services including the consumer’s emotional, mental and
behavioural responses that fallow these activities;
o Purchase activities: the purchase of goods or services; how
consumers acquire products and services, and all the
activities leading up to a purchase decision, including
information search, evaluating goods and services and
payment methods including the purchase experience
o Use or consumption activities: concerns the who, where,
when and how of consumption and the usage experience,
including the symbolic associations and the way that goods
are distributed within families or consumption units
o Disposal activities: Concern the way that consumer
dispose of products and packaging; may also include
reselling activities such as eBay and second-hand markets.

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 These activities related to both personal consumer and business or
industrial or organisational consumer.
Personal Consumer – Buyer are those who purchase items for their
personal consumption is called personal consumer.
Industrial consumer – Buyer are those who purchase items a behalf
of their business is called as industrial or organisational or business
consumer.
Consumer Behaviour is defined as the behaviour that consumer,
whether it’s an individual, group, a business organisation, display in
searching for purchasing, using, evaluating and disposing of products and
services that they expect will satisfy their needs. It focuses on how individual
make decisions to spend their available resources (Time, Money, Effort) on
consumption related items. That includes what they buy, why they buy it,
when they buy it, where they buy it, how often they buy it, how often they
use it. Marketer need to understand the personal and group influences that
affect consumer decisions and they also need to understand, how these
decisions are made and the decision-making process is interdisciplinary, it’s
a relatively to new field of a study started in the mid to late 1960s. It depends
heavily on the concepts developed in other scientific disciplines such as
Psychology (the study of individual), Sociology (the study of group), Social
Psychology (the study of how an individual operates in groups),
Anthropology (the influence of the society on the individual) and
Economics.

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Why study of buyer behaviour:
➢ It will help to segment the market study.
➢ To design the best possible product or service that fully satisfies
consumer’s needs and demands
➢ To decide where the service or product would be made available
for easy access of consumers.
➢ To find out the best method of promotion that will prove to be
effective to attract customers to buy a product
➢ It will help aid in development of an effective marketing mix
➢ To understand why, when, how, what and other factors that
influence buying decision of the consumer and find out how
people make their buying decision
o Social Influence
▪ Need recognition
▪ Information search
o Marketing Influence
▪ Evaluation of option
o Solution Influence
▪ Purchase decision
▪ Post purchase
➢ To identify the factors that influence those decision
o Cultural factors
o Social factors
o Personal factors
o Psychological factors
o Economic factors
o Situational factors
➢ An important part of the marketing process is to understand why a
customer or buyer makes a purchase
➢ Without such an understanding business find it hard to respond to
the customer’s needs and wants.

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Characteristics of Buyer Behaviour:
Consumer behaviour includes the act of individuals directly
involved in obtaining and using economic goods. The above
discussion gives the following information about buyer behaviour:
❖ Buyer behaviour involves both individual (Psychological) process
and Group (Social) process.
❖ Buyer behaviour includes communication, purchasing and
consumption behaviour
❖ Consumer behaviour is shaped by social environment

❖ Consumer behaviour is influenced by psychological, Social,

Physical and cultural factors.
❖ Buyer behaviour includes both personal and industrial
buyer behaviour:
Who purchase items for their personal consumption is called
personal consumer. Who purchase items on behalf of their
business is called industrial or organisational consumer.
❖ Consumer behaviour is the part of human behaves:
This cannot be separated. Human behaviour decides what to
buy, when to buy etc. This unpredictable in nature. Based on the
behavioural pattern one can at least estimate like the past he
might behave.
❖ Learning the consumer is difficult and complex as it involves
the study of human beings:
Each individual behaves differently when he is placed at
different situations. Every day is a lesson from each and every
individual while we learn the consumer behaviour. Today one may
purchase a product because of is smell, tomorrow may vary and
he will purchase another due to some another reason.

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 ❖ Consumer behaviour is dynamic:
A consumer’s behaviour is always changing in nature. The
taste and preference of the people vary. According to that
consumer behaves differently. As the modern world changes the
consumer’s behaving pattern also changes.
❖ Study of consumer behaviour is crucial for marketers:
Before producing a product or launching a product, he has
to go through a clear analysis of the consumer behaviour.
❖ Consumer behaviour is continuous process:
As it involves the process starts before the buying and
continuing after purchasing. Before buying there will be high
confusion and expectations about the product. After buying it, if
the buyer is satisfied with the product be shows a positive
behaviour, otherwise negative.

Stages of the consumer buying process:

Six Stages to the Consumer Buying Decision Process (For complex
decisions). Actual purchasing is only one stage of the process. Not all
decision processes lead to a purchase. All consumer decisions do not always
include all 6 stages, determined by the degree of complexity. The 6 stages
are:
1. Problem Recognition (awareness of need):
Difference between the desired state and the actual condition.
Deficit in assortment of products. Hunger--Food. Hunger stimulates
your need to eat. Can be stimulated by the marketer through product
information did not know you were deficient? I.E., see a commercial for
a new pair of shoes, stimulates your recognition that you need a new
pair of shoes.

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2. Information search:
o Internal search, memory.
o External search if you needs more information. Friends and
relatives (word of mouth). Marketer dominated sources;
comparison shopping; public sources etc.
A successful information search leaves a buyer with possible
alternatives, the evoked set.
3. Evaluation of Alternatives:
Need to establish criteria for evaluation, features the buyer wants
or does not want. Rank/weight alternatives or resume search. May
decide that you want to eat something spicy, Indian gets highest rank
etc.
If not satisfied with your choice then return to the search phase.
Can you think of another restaurant? Look in the yellow pages etc.
Information from different sources may be treated differently.
Marketers try to influence by "framing" alternatives.
4. Purchase decision:
Choose buying alternative, includes product, package, store,
method of purchase etc.
5. Purchase:
May differ from decision, time lapse between 4 & 5, product
availability.
6. Post-Purchase Evaluation/outcome:
Satisfaction or Dissatisfaction. Cognitive Dissonance, have you
made the right decision. This can be reduced by warranties, after sales
communication etc.
After eating an Indian meal, may think that really you wanted a
Chinese meal instead.

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Types of buyer behaviour:
Level of Involvement in purchase decision. Importance and intensity of
interest in a product in a particular situation. There are four types of buying
behaviour.
✓ Complex buyer behaviour:
Is where the individual purchase a high value brand and seek
a lot of information before the purchase is made. Extensive
decision making/complex high involvement, unfamiliar,
expensive or infrequently brought products. High degree of
economic risk. Examples include cars, homes, computers. Spend
a lot of time seeking information and deciding. Information from
the companies, friends and relatives, store personnel etc. Go
through all six stages of the buying process.
✓ Habitual buying behaviour:
Buying low involvement frequently purchased low cost items;
need very little search and decision effort; purchased almost
automatically. Is where the individual buys a product out of habit
e.g. a daily newspaper, sugar, foods, milk, soft drink etc.
✓ Variety seeking buying behaviour:
Is where individual like to shop around and experiments with
different products. So, an individual may shop around for different
breakfast cereals because he/she wants variety in the mornings.
✓ Dissonance reducing buying behaviour:
Is when buyers are highly involved with the purchase of the
product, because the purchase is expensive or infrequent. There is
little difference between existing brand an example would be buying
a diamond ring, as people believe there is little difference between
diamond brand manufacturers.

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Theories of consumer behaviour:
Marketing in the 21st century is part art and part science and both
sides place a crucial role in successful marketing. At the heart of the
scientific study of marketing are key insights about consumer behaviour or
why consumer buy and act the way they do. Theories of consumer
behaviour address important issues, such as how consumers purchase as
individuals versus how they purchase in groups, the role of emotions in
purchasing decisions, post-purchase attitudes and the role of object utility.
The following are the consumer behaviour theories every marketer should
know:
➢ Economic Theory – Marshallian Model
Economic models of consumer behaviour are unidimensional.
The following presumptions are made about buyer behaviour:

a) Lower the price of the product, larger will be the

quantity bought – Price effect.

b) Higher is the purchasing power, higher will be the

quantity – Income effect.

c) Lower the price of a substitute product, lesser the

quantity that will be bought of the original product –
Substitution effect.

d) Higher the promotional expenditure, higher will be the

sale – Communication effect.

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 ➢ Motivation or Needs Theory – Maslow’s Theory:
Maslow’s Five-level hierarchy of needs is well-known in the
theory in the theory of motivation. Maslow felt that as each need
is fulfilled, another higher-level need arises and demands priority
in its satisfaction.
The ladder of basic need Hierarchy:
1. Self-actualization needs
(Self-development and realization)

2. Esteem needs
(self-esteem, recognition, status)

3. Social needs
(Sense of belonging, love)

4. Safety needs
(Security, protection)

5. Physiological need
(Food, water, clothes)
➢ Herzberg’s Theory
➢ Howard-Sheth Model
➢ Psychoanalytic Theory

Conclusion:
To understand needs of customer, you need to understand behaviour
of the consumer. The purchase of the same product does not always elicit the
same Buying Behaviour. Product can shift from one category to the next.

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