Consumer Behaviour 1

Organisational Products and Brands: Consumer Behaviour

[Name of the Writer]

[Name of the Institution]

 Consumer Behaviour 2

Products and Brands: Buyer’s Behaviour

Introduction

According to Tsai, (2009), consumer behaviour is defined as an active people under the

age of time-consuming, and sells products and services. Simply put, consumer behaviour has

long been considered research, development strategies; under the premise of "Why people buy

"once a marketer knows why people buy a certain product or brand, it become easier to influence

consumers and develop strategies accordingly.

Figure 1: Consumer Behaviour (Ratnatunga & Ewing, 2005, 25-40)

It is very important to study the decision-making process because it will explain why and

when consumers buy a product(s). From consumers’ general view, there are five reasons. First,

there are variety of commodities and customers have to make choice from different products

which processes same function; second, customers need this product because it will bring some

benefits to them; third, the consumers are interested in it, even though it may not be useful;
 Consumer Behaviour 3

fourth, the product has a very famous brand which embodies the consumers’ life style and social

status; fifth, the external influential factors lead to the customers’ choices, and so on.

Meanwhile, when consumers want to buy a certain product there are also a lot of

influential factors in the decision-making process, both from external and internal aspect. These

factors are playing important roles to help consumers evaluate the alternatives and make the final

decision.

In this study, we explore the consumer behaviour and consumer perception from different

angles, and then explain the influential factors using some existing literature.

Consumer Behaviour

Consumer behaviour is “the study of the processes involved when individuals or groups

select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and

desires.” (Huang, Phau Lin et al. 2008: 1097-1110) Values, beliefs and customs are established

through social and cultural influences. These essential factors are influencing a consumer’s

purchasing decision and the impact has to be considered and understood in every international

market. There is a risk that what a consumer does will inflict on his or her behaviour and

generate consequences.

A widely recognised model describing how people in general prioritise their needs that

are leading to their behaviour is Maslow’s Hierarchy of Needs (see figure 2 adapted from

Maslow 1954). Maslow suggested that a human has five levels of needs: 1) Physiological needs,

2) Safety needs, 3) Social needs, 4) Self-esteem and 5) Self-actualisation. When the needs are

being satisfied on one level, the next one becomes important.

 Consumer Behaviour 4

Figure 2: Maslow’s Hierarchy of Needs (Maslow 1954)

Consumer Attitudes

A consumer’s attitudes would make him/her less open towards new information if it does

not correspond to them. Nandan (2005: 71) described that it will then be possible for the

consumer to process the new information and reflect over the difference, similarities, features

and advantages. Furthermore Jacobs & De Klerk (2007: 92-95) define perception as a process

where the incoming stimuli activate the five senses. In a cross-cultural perspective, vision and

taste can have a large effect on consumers’ taste for a product. Taste is also important in this

perspective, and it is important to when consider marketing food or beverage. An example of this

is that coke tastes different depending on the country/region it is being sold in. This is to adapt it

to the particular taste of the target group.

Consumer buying Behaviour

The activity of buying depends on the individual. In some cultures, consumers might

have to consider their families and not only themselves before making any decisions. Hupp &

Powaga (2004: 91) describes the buying behaviour of a family in the Western world differs from
 Consumer Behaviour 5

an Asian family. However, consumer’s behaviour can be influenced by institutions e.g. the

government, charities, religions, trade unions and educational establishments which may be

similar in different countries and cultures but differ regarding the level of influence. The rational

values and thoughts seldom would dominate an individual’s buying behaviour.

There are some undependable differences to consider, such as the consumer involvement,

the perceived risk and cognitive style. The consumer involvement comprises of consumption for

social or symbolic value and status. Perceived risk can be connected to buying a product and the

consumers are likely to try new products and services. There may be a physical, social or

financial risk. The attitude towards brand loyalty also affects the perceived risk.

There are different types of buying behaviour, something that shows in his diagram

where they depends on the level of involvement from the consumer and how it relates to

differences between brands (see figure 2).

Figure2: Four types of buying behavior (Lee, Joshi & Bae, 2009, 25-51)

Consumer Perception

Perception is described as “the process by which people select, organize and interpret

information to form a meaningful picture of the world” (Kotler & Keller, 2006: 186). A
 Consumer Behaviour 6

perceived value or quality is an aspect of brand value and it may influence a consumer in

choosing a certain brand. One way of enhancing a brand could be through using design as a

competitive advantage in parallel to market and claim quality and value in a product. Preferences

in a brand and its benefits, is important for a consumer and his or her choice. This could also be

connected to a certain lifestyle and therefore knowledge about this can be used in addressing and

persuading consumers to act in a certain way. Customer perceived value is a concept that is

important in marketing and it has sometimes been neglected (Barnes, 2010: 38-40).

Perceived Value

A value is what a consumer obtains through a purchase of a product, while it can also be

the leverage between the consumers’ perceived advantages and sacrifices (Belch & Belch, 2004:

44). Value can also be seen as what consumers are willing to pay for something. There are a few

factors that together would create value which would lead to consumption. The value for a

consumer is related to the perception of the consumer and it is also a balance between perceived

advantages and sacrifices that would lead to a purchase. Consumers have the tendency to

concentrate the value of a product to quality and price. Price is also a part of the sacrifices that a

consumer makes in a purchase, which could have a negative influence (Homer, 2004: 318-330).

Some products and brands are manufactured by the same producer and it might not be

clear who owns the product. One good example of this is the one of Maybeline with a ‘New

York’ profile but French L’Oréal owns it (Kamaladevi, 2010: 38). If a consumer finds out that a

product/brand is made by the same producer as a competing product and/or brand, or in fact a

whole product category, they may play a role for the products value. The only difference

between the products could be the product name/brand to create competitive advantages. This is
 Consumer Behaviour 7

something that could be seen as devastating if consumers realise it. There is investment in design

made today to compete on the market and to build competitive advantage (Barone, Norman and

Miyazaki, 2007: 69)

Value is divided into functional and emotional value. Performance, lifestyle, celebrity

and geographical origin are phenomena related to values associated to a brand. The functional

value is not as important as it used to be, it is rather emotions for a certain brand as well as the

belief and admiration surrounding a brand. Solomon (2004: 621), discussed this and holds that

the emotional value plays just as big part when it comes to a brand. Linked to this is also the

perceived admiration that emerges if wearing a certain brand as people strives for status in the

society.

Perceived Risk

According to Wright et. al., (2008: 8-17) the brands exist as soon as there is perceived

risk, they can also reduce perceived risk. Perceived risk can be defined as the extent of

uncertainty a consumer has about the consequences of an action for example buying, using

and/or disposal of a product. There are high and low involvement products; high involvement

products are for instance cars, homes and computers, while cookies and coffee stands for low

involvement products. Ratnatunga & Ewing, (2005: 25) develop the perception of risk so as to

convince the consumer with for example pointing out good aspects about taking a risk that might

be a good choice on a long-term basis. Furthermore the perceived risk differs within a culture

and across cultural groups. It can be high if the offer has got little information and is new or

expensive. Risks are perceived differently by consumers: performance, financial, physical,

 Consumer Behaviour 8

social, time invested and psychological concern of how a product will fit to their perception of

themselves.

Perceived Quality

The perception of value is linked to perceived quality. The consumer’s assessment of

value in a product comes partly from their perception of product quality but also from price,

image and brand perceptions (Wright, Bruhn, Heymann & Bamforth 2008: 17). Perceived

quality is a key to future performance and purchase decisions and brand loyalty are directly

influenced by perceived quality.

However Delgado, Ballester & Munuera, (2005: 187-196) suggest through their research

that perceived quality should be seen as a factor associated with attributes rather than being the

attribute itself. The perception of quality comes from the consumer’s knowledge about and

experience of a brand and/or product. The authors stress how important it is not to exclude

objective quality or perceived quality since they are related and therefore neither should be

neglected. In the end it is up to the consumer and his/her opinion about a product’s and/or

brand’s quality and whether they mix perception of image, brand and product performance and

characteristics. Marketers need to put emphasis on consumer perception of quality and not only

see to technical construction and engineering to communicate the right quality message to the

consumers. Furthermore, it is important to integrate service elements of the “product” with the

development of the brand and not to overlook it. Lessons can be drawn from techniques and

strategies in service marketing in order to profit from the perceived quality with consumers.

Brands and Branding

 Consumer Behaviour 9

A striking phenomenon in the contemporary business environment is the magnitude and

importance of brands in the minds of consumers as well as investors both locally and

internationally. Branding had its roots in the fast-moving consumer goods segment through the

innovative work of Messrs. Procter and Gamble and Lord Leverhulme. They continue and state

that, in essence, a valued brand is indicative of trust and goodwill. Kotler (2008), agree that well-

established and successful brands have the unique ability to enhance shareholder wealth not just

by capturing new market share but also by retaining existing loyal customers. Successful brands,

therefore, impact on an entity's fortunes in three ways, namely, by developing a healthy market

share, by maintaining competitive price levels and by ensuring steady cash flows.

Evidently, branding is a dynamic and constantly evolving phenomenon that demands

continuous assessment. A proper perspective of branding, therefore, needs an evaluation of its

development in order to respond creatively and appropriately to its changing demands. It is,

therefore, of benefit to consider the development of branding since the term originated.

The development of branding

Branding as a tool (this was used for the purposes of differentiating the product of one

manufacturer from another), goes back to a time long before the birth of Jesus Christ. According

to Huang, et al. (2008: 1097), the first illustration of branding can be traced back to the

production of oil lamps in the Greek islands. The term branding can quite accurately be

translated to mean burning a name or symbol onto some physical object as was practiced many

centuries ago on livestock. Until the middle of the 19th century, branding was very simple in

nature and served only as a guarantee and a technique to build a good reputation for one's

products. However, the introduction of the railway lines and industrialization resulted in
 Consumer Behaviour 10

manufacturers being able to produce efficiently and in large quantities and, in turn, having to sell

in large quantities across large geographic regions. Huang, et al (2008:1105) goes on to suggest

that these developments in manufacturing and distribution had the effect of widening the gap

between the producer and the consumer. As a result, manufacturers were compelled to brand

their products and communicate the unique benefits of their brands across different media

vehicles to ensure that the brand in question retained its identity.

International brands such as Coca-Cola, Sony and McDonald's have adopted the

approach of investing hundreds of millions of dollars in their brands to enhance the goodwill and

status associated with their respective brands (Kotler 2008). According to Tsai, (2009: 649-665)

while the geographic distances between manufacturers and consumers grow larger, brands,

which enjoy consumer confidence and a rich history, are well positioned to enjoy support from

one generation to the next as well as retain their own identity within the complex international

mass media communications network.

The components of a brand

There are three basic components that constitute a brand, namely, brand strategy, brand

positioning and brand personality.

Brand strategy

The brand strategy originates from the position of the brand within the broader portfolio

of the entity that has possession of the brand. A brand could be fighting for its survival in a high

growth segment or perhaps be content with functioning within mature or declining segment

(Hou, Du and Li, 2008: 373). For example, internet search engine Google spent only 5 million

dollars on marketing its brand in 2004, but has proven to be much more successful than many of
 Consumer Behaviour 11

its better established competitors who spent far more on their marketing campaigns. Evidence of

this success is the fact that Google occupied the 20th position of the best known global brands in

a survey conducted by Interbrand (Tsai, 2009, 649-665).

Brand positioning

Brand positioning focuses on the functional or physical aspects of the brand as well as the

competition that confronts the brand on a daily basis. Some of the functional dimensions,

according to which a brand can be positioned, include features like big/small, fast/slow, and

male/female (Lee, Joshi & Bae, 2009: 25). In mature markets brands are likely to be positioned

close to one another, while in a new and innovative market, there is likely to be a greater

diversity in the features offered by the different brands. In attempting to evaluate the dynamics

related to consumer purchasing patterns of fast moving consumer goods, Kotler (2008)) maintain

that well established brands enjoy a great deal of success because of their ability to consistently

deliver reliability, dependability and time savings. If consumers were to consider switching

brands, they would more than likely adopt two or three brands that offer similar benefits and

then choose the one that might be on special offer at the time of purchase.

Brand personality

The personality of a brand is really the perception which consumers have of the brand in

question. There are three types of appeals, namely, sensual, rational and emotional that helps

shape the personality of the brand. The sensual appeal of a brand revolves around the look, feel

and sound of the product while the rational appeal is directed at the physical performance of the

product and the emotional appeal is centred on the psychological benefits that the product is able

to conjure in the mind of the consumer (Solomon, 2004: 621). Coca-Cola has elected to address
 Consumer Behaviour 12

the needs of their South African target audience in a number of different ways (Kamaladevi

2010: 38). Firstly, emphasis has been placed on ensuring that the product is always freely

available to consumers wherever they might want to consume the product. Secondly, the product

must always be served cold to the consumer. Coca-Cola have, over the years, invested heavily in

providing refrigerators to shop-owners in black townships to achieve loyalty among their

customers as well as to be in a position to serve the product cold (as it was intended) to the

consumer for immediate enjoyment. Thirdly, the product is well-priced to ensure that the

consumer receives excellent value for money. Fourthly, the product is attractively packaged to

ensure that it is easily recognizable but also trendy enough to appeal to a younger audience.

Finally, Coca-Cola has ensured that their marketing communication not only focuses on

stimulating demand but also places emphasis on their projects designed for the upliftment of

communities. For example, Coca-Cola gives R10 000 to a charity for every goal scored in the

Coca-Cola Cup (Barnes, 2010, 38-40).

Any successful brand must have all three of these appeals present to distinguish it from

competitors that might be active in the marketplace. The components of a brand provide

structure and purpose for the development of the future of the brand. With this structure in place,

it is then necessary to evaluate all facets of brand equity to ensure that it is carefully monitored

and used as a barometer to determine the overall success of the brand.

Brand Equity

Behaviour, market shares and price are components that inflict on brand equity. If the

first two components were stable, this would let managers to think of possible improvements. It
 Consumer Behaviour 13

is important not to ignore consumers’ mental state since knowing what changes behavior makes

it easier to employ the marketing mix to this change (Copley, 2004: 54).

Brand equity can be seen as a meaning of brand-consumer relationships and should be

considered a relational market-based asset. This is a result of external relationships between a

brand and other parts of the value chain, leading to an external asset to the company that emerges

from brand associations and behaviours. When positive associations are created in the mind of

the consumer, it can lead to brand equity. It is important to realise that an understanding for the

consumer is essential in order to understand how to create brand equity (Jacobs & De Klerk,

2007: 99).

A part of a brand image is brand name, something that can reveal product quality,

efficiency and brand awareness. It can call for the consumer’s attention. A brand adds value to

consumers and society and increases innovation. In addition Larsen & Buss, (2009) mention how

design is a way to develop these features and to look for new ones as well as communicate

information about products which may lead to an increase in sales. An image does not solely

centre on taste or quality rather associations. Design will provide an excellent opportunity for a

company to differentiate and positioning a product on the market. Design can be seen as an

investment and lately it has been recognised by other companies and people as something that

may increase brand and product image. Good design contributes to certain image and look for a

product and form will follow function.

Something that also should be highlighted is that a product has got a functional benefit,

while a brand is a form of design, symbol or mark that will increase and create a value beyond

functionality (Solomon, 2004: 621).

 Consumer Behaviour 14

Quality can be considered when a customer returns but the products do not. Product

features are another product attribute. A feature should be assessed on the basis of the customer

value. A way to add customer value is with product style and design. Companies are aware of

that and therefore they extend their competitive advantages by highlighting some product

features. There is striving for new and modern design features and not boring and poor touch and

function. Good design can also enhance the usefullness of a product. (Kotler et al. 2002: 466-

468)

Brand Loyalty

Researchers are divided in terms of how best to define brand loyalty, that is, should brand

loyalty be defined in terms of consumer behaviour or in terms of consumer attitudes.

Behavioural scientists are of the opinion that brand loyalty arises from an initial product trial that

is reinforced through a satisfying experience and thus resulting in repeat purchasing (Thompson

& Arsel 2006). However, cognitive researchers propose that consumers embark on a

comprehensive problem-solving behaviour which involves brand and attribute comparisons and

facilitates brand preference and encourages repeat purchasing (Shiffman & Kanuk 2004). The

viewpoint of Shiffman and Kanuk (2004:190) is echoed by Hoyer and Maclnnis (2001:259) who

emphasize that a key feature of brand loyalty is the positive reinforcement of a performance

related choice tactic.

Conclusion

To conclude, there are many benefits that can accrue to a popular and well-trusted brand,

namely, premium pricing, wide distribution, the guarantee of consistent sales and a good return
 Consumer Behaviour 15

on investment. Consumers are motivated by a variety of factors when contemplating a purchase

decision. While there are consumers that might simply view price as the most important factor to

consider when choosing between competing products or services, there are also consumers that

view factors other than those related to pricing as being crucial to the purchase decision.
 Consumer Behaviour 16

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