CONSUMER BEHAVIOUR

INSTRUCTIONS: Read the theory and solve the exercise.

The market needs to attract

The study of consumer behaviour examines the products and services consumers buy and use and how these purchases
influence their daily lives. This field covers a lot of ground. It has been defined as: ‘the study of the processes involved
when consumers acquire, consume and dispose of goods, services, activities, ideas in order to satisfy their needs and
desires’
 INTERNAL PROCESSES

Internal processes are the psychological factors inherent in each individual. In Chapters 4, 5 and 6 we’ll see in detail how
motivation, attitudes and decision making all work together with the external factors described previously to influence
consumers’ decision making and purchases.

Motivation

Motivation has been defined as an ‘inner state of arousal’ with the resulting energy being directed towards achieving a
goal.7 The goal in Frank’s case is obtaining the iPhone. Apple engaged in an extensive promotion strategy months
before the official launch of the iPhone. This led to consumers becoming energised, ready and willing to engage in
behaviour that would lead to acquiring the iPhone. In the US, in order to use the iPhone these consumers needed to
sign a two-year contract with AT&T. This made the decision a risky one – purchasing the phone involved a significant
time commitment. In addition, a significant cash investment was necessary. Given both the financial and time risk, Frank
is highly motivated to learn about the various alternatives available to him and also to learn about all of the iPhone
options before he makes the purchase

Perception

Since Frank is highly motivated to make the iPhone purchase, he makes sure that he is exposed to and pays attention to
information related to the phone. He notices ads for the phone and pays attention to any facts stated in those ads. The
iPhone faces competition from several manufacturers who offer competing products. Since Frank is inundated with
information about different types of phones, he only pays selective attention to iPhone advertisements. He attends to
information about the iPhone that will enable him to make an informed purchase decision.

Knowledge

In this context, knowledge reflects the information an individual gathers about different brands, companies, product
categories, how to buy products and also how to use products. Consumers often organise this knowledge into
categories of similar objects. This process of categorisation helps consumers quickly assess the possible uses for
particular products. Frank uses the knowledge that he gathers, and tries to categorise and comprehend it. For instance,
he might categorise the iPhone as a new type of personal digital assistant that comes with an MP3 player and phone.
This enables him to fully understand the capabilities of the new phone.

Attitudes

Attitudes do not always predict behaviour. For example, many consumers may have a positive attitude towards the
iPhone, but this positivity may not necessarily result in their making a purchase. Additionally, consumer attitudes may
change over time and as they gain access to additional information. For example, as Frank is exposed to new
information, his evaluation of the iPhone might change. A positive review from a publication like Which? or Consumer
Reports that publishes independent, scientifically conducted reviews about numerous products and services may lead
him to shift his evaluation upward. This positive attitude would mean that he would be more likely to purchase the
phone

Memory

Consumer memory is a great store of knowledge that people have acquired over time. Memory holds information about
products, services, shopping and product usage experiences. Retrieval is the act of remembering the information that
we have stored in memory. Frank’s choices are based primarily on information that he retrieves from memory. This
information will be worthwhile to the extent that it can be used in evaluating available options. For instance, Frank was
exposed to information from objective sources such as Consumer Reports magazine and this was subsequently encoded
in his memory. Given the independent nature of this publication, when this information is retrieved from memory, it will
carry a lot of weight in Frank’s decision.
Consumer decision making

The traditional view of decision making is of the consumer as a rational decision maker. We’ll explore this in more detail
in Chapter 6, but in essence this view states that the consumer would seek information about potential decisions and
carefully integrate this with what he or she already knows about the product. They would then weigh the pros and cons
of each alternative and arrive at a decision. The five stages in this process have been described as: 1) problem
recognition, 2) information search, 3) judgment, 4) decision making, 5) post-decision processes.

This process of decision-making behaviour is very valid and occurs every day; however, it primarily applies when the
purchase is one that is important to the consumer in some way – for example, the product is expensive, or it could
impact on their health or self-image in some way. Alternatively, when consumers are making decisions about
inexpensive products, such as chewing gum or soda, they do not usually follow such a complicated process. For these
types of products, consumers tend to experience problem recognition and then make a decision without taking time to
collect a lot of information or evaluate the alternatives. Given the low levels of financial risk, consumers usually try
inexpensive products then evaluate them after trial.

Problem recognition and information search

Consumers identify a ‘problem’ when their existing state differs from their ideal state. In other words, they have an
existing need or desire that is unfulfilled. To return to our iPhone example, Frank knows that his existing phone lacks
several features that he desires, such as an MP3 player and a personal organiser. Since his existing state is different from
his ideal state, Frank recognises that he has a problem. In order to resolve this problem, Frank engages in a search for
alternative products that could meet his needs. His search provides insight into the different mobile phones that possess
the brand, functionality and cost attributes that he wants.

Judgment and decision making

Once the problem has been identified and a search for desirable alternatives has been completed, the consumer must
now evaluate the alternatives and make a decision based on the possible options. Frank’s decision requires a great deal
of effort since the iPhone involves both a significant financial cost and a significant time investment (because he must
sign a two-year contract). Given this risk, Frank is willing to spend a lot of time and mental effort in making this decision.
He identifies important criteria that he can use to evaluate his planned purchase. Then he will decide whether this
brand best satisfies his needs.

POST-DECISION PROCESSES

Once the decision is made and the product is purchased, the last step in the decision-making process is evaluating the
outcome – is the consumer satisfied with the product or service? Based on the response to this question the consumer
could react in different ways. For instance, if Frank is satisfied with his iPhone purchase he could react positively and
recommend it to his friends; he could also purchase another iPhone in the future when Apple release an upgraded
version of the phone. If he is dissatisfied, he could react negatively and complain to Apple; he could also post public
complaints online or he could return the phone. A company’s response to customer complaints can have a significant
impact on its success. On average, a customer who is dissatisfied shares their negative feelings with approximately ten
other individuals.
TASK 1. FINDING THE CONCEPTS
Find out the following factors in the text. Explain in which way each one of them influences the
consumer behaviour. Complete the chart USING BETWEEN 10 AND 20 WORDS (1 OR 2 LINES).
Factor Influence in consumer behaviour
Perception The costumers will look for information related to the product they
want, so the access to it is important.

Knowledge The information about the product the costumer is exposed to will
determine whether he finds it fit for them.

Attitudes The way the costumers first react to the product doesn’t always
determine how they feel, attitudes can change when exposed to new
information.

Problem recognition Costumers usually are interested in purchasing when the product in
need becomes a necessity or the product, they have now malfunctions.

Information search People tend to do research on the products that fit their needs, this
search provides insight that helps them make the decision.

Judgement When the costumer has the information they want, they need to make
a judgement on which product fits best.

Decision making The costumers decide on what product they purchase based on the
possible options they encountered before.

Purchase When the decision is made, the costumer must decide whether the
product satisfies their needs.

Post- purchase behaviour If the costumer is satisfied with the product, they might recommend it to
others or even purchase from the same brand in the future, if not they
might complain and leave bad reviews.

TASK 2
CASE STUDY. See the video and write the details which explained the consumer decision
making.
https://www.youtube.com/watch?v=18Di5U_NKfs
PRACTICAL ENGLISH IN A CLOTHES SHOP.
Answer: The costumers goes in the store wanting a shirt, as he finds one of his liking, he looks for
the shirt that fits all his needs. He tries it on and as it fits properly, he asks for the price and as it fits
his liking, he decides on getting the shirt.
Marianella Sabbagh 10a