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Consumer Behaviour - Wikipedia

This document provides an overview of consumer behaviour. It defines consumer behaviour as the study of how individuals and groups select, purchase, use, and dispose of goods and services. Consumer behaviour is an interdisciplinary field that draws from psychology, sociology, anthropology, marketing, and economics to examine how emotions, attitudes, and preferences influence purchasing decisions. Researchers investigate characteristics like demographics, personality, lifestyle, usage rates, and loyalty to understand consumer wants and consumption patterns. The study of consumer behaviour aims to predict purchasing behaviours from pre-purchase research to post-purchase experiences.

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0% found this document useful (0 votes)
1K views185 pages

Consumer Behaviour - Wikipedia

This document provides an overview of consumer behaviour. It defines consumer behaviour as the study of how individuals and groups select, purchase, use, and dispose of goods and services. Consumer behaviour is an interdisciplinary field that draws from psychology, sociology, anthropology, marketing, and economics to examine how emotions, attitudes, and preferences influence purchasing decisions. Researchers investigate characteristics like demographics, personality, lifestyle, usage rates, and loyalty to understand consumer wants and consumption patterns. The study of consumer behaviour aims to predict purchasing behaviours from pre-purchase research to post-purchase experiences.

Uploaded by

Mwawi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Consumer behaviour

The Galeries Royales Saint-Hubert shopping arcade in


Belgium. Consumer behaviour, in its broadest sense, is
concerned with how consumers select and use goods
and services.

Consumer behaviour is the study of


individuals, groups, or organizations and
all the activities associated with the
purchase, use and disposal of goods and
services, including the consumer's
emotional, mental and behavioural
responses that precede or follow these
activities. Consumer behaviour emerged in
the 1940s and 50s as a distinct sub-
discipline in the marketing area.

Consumer behaviour is an inter-


disciplinary social science that blends
elements from psychology, sociology,
social anthropology, anthropology,
ethnography, marketing and economics,
especially behavioural economics. It
examines how emotions, attitudes and
preferences affect buying behaviour.
Characteristics of individual consumers
such as demographics, personality
lifestyles and behavioural variables such
as usage rates, usage occasion, loyalty,
brand advocacy, willingness to provide
referrals, in an attempt to understand
people's wants and consumption are all
investigated in formal studies of consumer
behaviour. The study of consumer
behaviour also investigates the influences,
on the consumer, from groups such as
family, friends, sports, reference groups,
and society in general.
The study of consumer behaviour is
concerned with all aspects of purchasing
behaviour – from pre-purchase activities
through to post-purchase consumption,
evaluation and disposal activities. It is also
concerned with all persons involved, either
directly or indirectly, in purchasing
decisions and consumption activities
including brand-influencers and opinion
leaders. Research has shown that
consumer behaviour is difficult to predict,
even for experts in the field. However, new
research methods such as ethnography
and consumer neuroscience are shedding
new light on how consumers make
decisions.
Customer relationship management
(CRM) databases have become an asset
for the analysis of customer behaviour.
The voluminous data produced by these
databases enables detailed examination
of behavioural factors that contribute to
customer re-purchase intentions,
consumer retention, loyalty and other
behavioural intentions such as the
willingness to provide positive referrals,
become brand advocates or engage in
customer citizenship activities. Databases
also assist in market segmentation,
especially behavioural segmentation such
as developing loyalty segments, which can
be used to develop tightly targeted,
customized marketing strategies on a one-
to-one basis. (Also see relationship
marketing)

Origins of consumer
behaviour
See: History of marketing thought

In the 1940s and 50's, marketing was


dominated by the so-called classical
schools of thought which were highly
descriptive and relied heavily on case
study approaches with only occasional
use of interview methods. At the end of
the 1950s, two important reports criticised
marketing for its lack of methodological
rigor, especially the failure to adopt
mathematically-oriented behavioural
science research methods.[1] The stage
was set for marketing to become more
inter-disciplinary by adopting a consumer-
behaviourist perspective.

From the 1950s, marketing began to shift


is reliance away from economics and
towards other disciplines, notably the
behavioural sciences, including sociology,
anthropology and clinical psychology. This
resulted in a new emphasis on the
customer as a unit of analysis. As a result,
new substantive knowledge was added to
the marketing discipline – including such
ideas as opinion leadership, reference
groups and brand loyalty. Market
segmentation, especially demographic
segmentation based on socioeconomic
status (SES) index and household life-
cycle, also became fashionable. With the
addition of consumer behaviour, the
marketing discipline exhibited increasing
scientific sophistication with respect to
theory development and testing
procedures.[2]

In its early years, consumer behaviour was


heavily influenced by motivation research,
which had increased the understanding of
customers, and had been used extensively
by consultants in the advertising industry
and also within the discipline of
psychology in the 1920s, '30s and '40s. By
the 1950s, marketing began to adopt
techniques used by motivation
researchers including depth interviews,
projective techniques, thematic
apperception tests and a range of
qualitative and quantitative research
methods.[3] More recently, scholars have
added a new set of tools including:
ethnography, photo-elicitation techniques
and phenomenological interviewing.[4]
Today, consumer behaviour (or CB as it is
affectionately known) is regarded as an
important sub-discipline within marketing
and is included as a unit of study in almost
all undergraduate marketing programs.

Definition and explanation


Consumer 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 precede or
follow these activities."[5] The term,
consumer can refer to individual
consumers as well as organisational
consumers, and more specifically, "an end
user, and not necessarily a purchaser, in
the distribution chain of a good or
service."[6] Consumer behaviour is
concerned with:[7]

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
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
disposal activities: concerns the way
that consumers dispose of products and
packaging; may also include reselling
activities such as eBay and second-hand
markets

Consumer responses may be:[8]

emotional (or affective) responses: refer


to emotions such as feelings or moods,
mental (or cognitive) responses: refer to
the consumer's thought processes, their
behavioural (or conative) responses: refer
to the consumer's observable responses
in relation to the purchase and disposal
of goods or services.

As a field of study, consumer behaviour is


an applied social science. Consumer
behaviour analysis is the "use of behaviour
principles, usually gained experimentally,
to interpret human economic
consumption." As a discipline, consumer
behaviour stands at the intersection of
economic psychology and marketing
science.[9]

The purchase decision and its


context
Shoppers inspect the quality of fresh produce at a
market in Jerusalem.

Understanding purchasing and


consumption behaviour is a key challenge
for marketers. Consumer behaviour, in its
broadest sense, is concerned with
understanding both how purchase
decisions are made and how products or
services are consumed or experienced.
Consumers are active decision-makers.
They decide what to purchase, often based
on their disposable income or budget.
They may change their preferences related
to their budget and a range of other
factors.[10][11][12]

Some purchase decisions involve long,


detailed processes that include extensive
information search to select between
competing alternatives.[13] Other purchase
decisions, such as impulse buys or
habitual purchases, are made almost
instantaneously with little or no
investment of time or effort in information
search.
Some purchase decisions are made by
groups (such as families, households or
businesses) while others are made by
individuals. When a purchase decision is
made by a small group, such as a
household, different members of the group
may become involved at different stages
of the decision process and may perform
different roles. For example, one person
may suggest the purchase category,
another may search for product-related
information while yet another may
physically go to the store, buy the product
and transport it home. It is customary to
think about the types of decision roles;
such as:
In a family unit, the adult female often makes brand
choices on behalf of the entire household, while
children can be important influencers

The Initiator
the person who proposes a brand (or
product) for consideration (something in
return);
The Influencer
someone who recommends a given
brand;
The Decider
the person who makes the ultimate
purchase decision;
The Purchaser
the one who orders or physically buys it;
The User
the person who uses or consumes the
product.[14]

For most purchase decisions, each of the


decision roles must be performed, but not
always by the same individual. For
example, in the case of family making a
decision about a dining-out venue, the
father or mother may initiate the process
by intimating that he/she is too tired to
cook, the children are important
influencers in the overall purchase
decision, but both parents may act as joint
deciders performing a gate-keeping role by
vetoing unacceptable alternatives and
encouraging more acceptable alternatives.
The importance of children as influencers
in a wide range of purchase contexts
should never be underestimated and the
phenomenon is known as pester power.[15]

The purchasing decision model


To approach the mental processes used in
purchasing decisions, some authors
employ the concept of the black box,
which represents the cognitive and
affective processes used by a consumer
during a purchase decision. The decision
model situates the black box in a broader
environment which shows the interaction
of external and internal stimuli
(e.g.consumer characteristics, situational
factors, marketing influences and
environmental factors) as well as
consumer responses.[16] The black box
model is related to the black box theory of
behaviourism, where the focus extends
beyond processes occurring inside the
consumer, and also includes the relation
between the stimuli and the consumer's
response.

The decision model assumes that


purchase decisions do not occur in a
vacuum. Rather, they occur in real time
and are affected by other stimuli, including
external environmental stimuli and the
consumer's momentary situation. The
elements of the model include:
interpersonal stimuli (between people) or
intrapersonal stimuli (within people),
environmental stimuli and marketing
stimuli.[17] Marketing stimuli include
actions planned and carried out by
companies, whereas environmental stimuli
include actions or events occurring in the
wider operating environment and include
social factors, economic, political and
cultural dimensions. In addition, the
buyer's black box includes buyer
characteristics and the decision process,
which influence the buyer's responses.

The purchase of up-market perfumes, often bought as


gifts, are high involvement decisions because the gift
symbolises the relationship between the giver and the
intended recipient

The black box model considers the buyer's


response as a result of a conscious,
rational decision process, in which it is
assumed that the buyer has recognized a
problem, and seeks to solve it through a
commercial purchase. In practice some
purchase decisions, such as those made
routinely or habitually, are not driven by a
strong sense of problem-solving. Such
decisions are termed low-involvement and
are characterized by relatively low levels of
information search/ evaluation activities.
In contrast, high involvement decisions
require a serious investment of time and
effort in the search/ evaluation process.[18]
Low involvement products are typically
those that carry low levels of economic or
psycho-social risk. High involvement
products are those that carry higher levels
of risk and are often expensive, infrequent
purchases.[19] Regardless of whether the
consumer faces a high or low involvement
purchase, he or she needs to work through
a number of distinct stages of a decision
process.

The consumer's purchase


decision process: an
overview
The consumer buying process is usually
depicted as consisting of 5 distinct
stages:[20]

The purchase decision begins with the


problem recognition stage, which occurs
when the consumer identifies a need,
typically defined as the difference between
the consumer's current state and their
desired state. The strength of the need
drives the entire decision process.
Information search is the phase where
consumers scan both their internal
memory and external sources for
information about products or brands that
will potentially satisfy their need. The aim
of the information search is to identify a
list of options that represent realistic
purchase options. Throughout the entire
process, the consumer engages in a series
of mental evaluations of alternatives,
searching for the best value. Towards the
end of the evaluation stage, consumers
form a purchase intention, which may or
may not translate into an actual product
purchase.[20] Even when consumers
decide to proceed with an actual purchase,
the decision-process is not complete until
the consumer consumes or experiences
the product and engages in a final post
purchase evaluation; a stage in which the
purchaser's actual experience of the
product is compared with the expectations
formed during the information search and
evaluation stages. The stages of the
decision process normally occur in a fixed
sequence.[21] However, information search
and evaluation can occur throughout the
entire decision process, including post-
purchase.

Problem recognition

The first stage of the purchase decision


process begins with problem recognition
(also known as category need or need
arousal). This is when the consumer
identifies a need, typically defined as the
difference between the consumer's current
state and their desired or ideal state. A
simpler way of thinking about problem
recognition is that it is where the
consumer decides that he or she is 'in the
market' for a product or service to satisfy
some need or want. The strength of the
underlying need drives the entire decision
process.[22]

Theorists identify three broad classes of


problem-solving situation relevant for the
purchase decision:[23]

Extensive problem-solving
Purchases that warrant greater
deliberation, more extensive information
search and evaluation of alternatives.
These are typically expensive
purchases, or purchases with high
social visibility e.g. fashion, cars
Limited problem-solving
Known or familiar purchases, regular
purchases, straight re-buys. Typically
low-priced items.
Routinized problem-solving
Repeat purchases or habitual purchases

Consumers become aware of a problem in


a variety of ways including:[24]
The purchase of a mobile phone may trigger the desire
for accessories such as this phone mount for use in a
car

Out-of-Stock/ Natural Depletion


When a consumer needs to replenish
stocks of a consumable item e.g. ran
out of milk or bread.
Regular purchase
When a consumer purchases a product
on a regular basis e.g. newspaper,
magazine.
Dissatisfaction
When a consumer is not satisfied with
the current product or service.
New Needs or Wants
Lifestyle changes may trigger the
identification of new needs e.g. the
arrival of a baby may prompt the
purchase of a cot, stroller and car-seat
for baby.
Related products
The purchase of one product may
trigger the need for accessories, spare
parts or complementary goods and
services e.g. the purchase of a printer
leads to the need for ink cartridges; the
purchase of a digital camera leads to
the need for memory cards.
Marketer-induced problem recognition
When marketing activity persuades
consumers of a problem (usually a
problem that the consumer did not
realise they had). The consciously, and
subconsciously, consumed content in
traditional as well as social media
greatly plays the role of a stimulus for
the consumer's recognition of a new
need.
New Products or Categories
When consumers become aware of new,
innovative products that offer a superior
means of fulfilling a need. Disruptive
technologies such as the advent of
wireless free communications devices
can trigger a need for plethora of
products such as a new mouse or
printer.

Information search

Customer purchase decision, illustrating different


communications touchpoints at each stage

During the information search and


evaluation stages, the consumer works
through processes designed to arrive at a
number of brands (or products) that
represent viable purchase alternatives.
Typically consumers first carry out an
internal search that is, a scan of memory
for suitable brands. The evoked set is the
set of brands that a consumer can elicit
from memory and is typically a very small
set of some 3- 5 alternatives.[25]
Consumers may choose to supplement
the number of brands in the evoked set by
carrying out an external search using
sources such as the Internet,
manufacturer/brand websites, shopping
around, product reviews, referrals from
peers and the like. The readiness of
information availability has raised the
informedness of the consumers; the
degree to which they know what is
available in the marketplace, with precisely
which attributes and at precisely what
price[26].

The fact that a consumer is aware of a


brand does not necessarily mean that it is
being considered as a potential purchase.
For instance, the consumer may be aware
of certain brands, but not favourably
disposed towards them (known as the
inept set). Such brands will typically be
excluded from further evaluation as
purchase options. For other brands, the
consumer may have indifferent feelings
(the inert set).[27] As the consumer
approaches the actual purchase, he or she
distills the mental list of brands into a set
of alternatives that represent realistic
purchase options, known as the
consideration set.[28] By definition, the
consideration set refers to the “small set
of brands which a consumer pays close
attention to when making a purchase
decision”.[29]

Specific brand names enter the


consumer's consideration set based on
the extent to which they satisfy the
consumer's purchasing objectives and/or
the salience or accessibility of the brand at
the time of making the purchase
decision.[30] By implication, brand names
that are more memorable are more likely
to be accessible. Traditionally, one of the
main roles of advertising and promotion
was to increase the likelihood that a brand
name was included in the consumer's
evoked set.[31] Repeated exposure to brand
names through intensive advertising was
the primary method for increasing top-of-
mind brand awareness. However, the
advent of the Internet means that
consumers can obtain brand/product
information from a multiplicity of different
platforms. In practice, the consideration
set has assumed greater importance in
the purchase decision process because
consumers are no longer totally reliant on
memory. This is marketing, which could be
defined as marketing as “The process by
which companies create value for
customers and build strong customer
relationships, in order to capture value
from customers in return.”[32] This
definition strongly implies that the
relationship is built upon an exchange, and
the "creation" of value. This means that a
need is built for a consumer, with the
product presented or advertised to them
through an analytical study of the user’s
patterns of consumption, and their
behaviors and habits.The implication for
marketers is that relevant brand
information should be disseminated as
widely as possible and included on any
forum where consumers are likely to
search for product or brand information,
whether traditional media or digital media
channels. Thus, marketers require a rich
understanding of the typical consumer's
touchpoints.

Evaluation of alternatives

Consumers shopping at London's Burlington Arcade


engage in a variety of recreational and functional
h i ti iti f i d h i th h
purchasing activities - from window shopping through
to transporting their purchases homewards

Consumer evaluation can be viewed as a


distinct stage. Alternatively, evaluation
may occur continuously throughout the
entire decision process. Consumers
evaluate alternatives in terms of the
functional (also called utilitarian) and
psycho-social (also called the value-
expressive or the symbolic) benefits
offered.[33]

Functional benefits are the tangible


outcomes that can be experienced by
the consumer such as taste or physical
appearance.
Psycho-social benefits are the more
abstract outcomes or the personality-
related attributes of a brand, such as the
social currency that might accrue from
wearing an expensive suit, designer
label or driving a 'hot' car.

Brand image (or brand personality) is an


important psycho-social attribute.
Consumers can have both positive and
negative beliefs about a given brand.[34] A
considerable body of research suggests
that consumers are predisposed towards
brands with a personality that matches
their own and that a good match can
affect brand preference, brand choice,
satisfaction with a brand, brand
commitment and loyalty and the
consumer's propensity to give positive
word-of-mouth referrals.[35] The branch of
consumer behaviour that investigates the
matching of a brand's personality and the
consumer's personality is known as self-
congruity research. [36] The social media
presence of a brand plays a huge part in
this stage, if we “Think of regular media as
a one-way street where you can read a
newspaper or listen to a report on
television, but you have very limited ability
to give your thoughts on the matter. Social
media, on the other hand, is a two-way
street that gives you the ability to
communicate too.”[37] Consumer beliefs
about a brand or product category may
vary depending on a range of factors
including the consumer's prior experience
and the effects of selective perception,
distortion and retention. Consumers who
are less knowledgeble about a category
tend to evaluate a brand based on its
functional characteristics. However, when
consumers become more knowledgeable,
functional attributes diminish and
consumers process more abstract
information about the brand, notably the
self-related aspects.[38]
The marketing organization needs a deep
understanding of the benefits most valued
by consumers and therefore which
attributes are most important in terms of
the consumer's purchase decision. It also
needs to monitor other brands in the
customer's consideration set to optimise
planning for its own brand. During the
evaluation of alternatives, the consumer
ranks or assesses the relative merits of
different options available. No universal
evaluation process is used by consumers
across all-buying situations.[39] Instead,
consumers generate different evaluation
criteria depending on each unique buying
situation. Social media further enables
consumers to share views with their peers
about the product they are looking to
purchase.[40] This way, consumers can
gauge the positive and negative sides of
each alternative, and decide even more
conveniently as for the best product to
buy. Thus the relevant evaluation
attributes vary according to across
different types of consumers and
purchase contexts. For example, attributes
important for evaluating a restaurant
would include food quality, price, location,
atmosphere, quality of service and menu
selection. Consumers, depending on their
geographic, demographic, psychographic
and behavioural characteristics, will decide
which attributes are important to them.
Potential patrons seeking a hedonic dining
experience may be willing to travel further
distances to patronise a fine-dining venue
compared to those wanting a quick meal
at a more utilitarian eatery. After
evaluating the different product attributes,
the consumer ranks each attribute or
benefit from highly important to least
important. These priorities are directly
related to the consumer's needs and
wants.[41] Thus, the consumer arrives at a
weighted score for each product or brand -
representing the consumer's subjective
assessment of individual attribute scores
weighted in terms of their importance, to
arrive at a total mental score or rank for
each product/brand under
consideration.[42]

Purchase decision

Once the alternatives have been evaluated,


the consumer firms up their resolve to
proceed through to the actual purchase.
For example, the consumer might say to
his/herself, "Yes, I will buy Brand X one
day." This self instruction to make a
purchase is known as purchase intent.
Purchase intentions are a strong, yet
imperfect predictor of sales. Sometimes
purchase intentions simply do not
translate into an actual purchase and this
can signal a marketing problem.[43] For
instance, a consumer may wish to buy a
new product, but may be unaware of the
retail outlets that stock it, so that
purchasing cannot proceed. The extent to
which purchase intentions result in actual
sales is known as the sales conversion
rate.[44]

Happy hour, where two drinks can be purchased for the


price of one, is a strong call-to-action because it
encourages consumers to buy now rather than defer
h i t l t ti
purchasing to a later time

Organizations use a variety of techniques


to improve conversion rates. The provision
of easy credit or payment terms may
encourage purchase. Sales promotions
such as the opportunity to receive a
premium or enter a competition may
provide an incentive to buy now rather
than defer purchases for a later date.
Advertising messages with a strong call-
to-action are yet another device used to
convert customers.[45] A call-to-action is
any device designed to encourage
immediate sale.[46] Typically, a call-to-
action includes specific wording in an
advertisement or selling pitch that
employs imperative verbs such as "Buy
now!" or "Don't wait!". Other types of calls-
to-action might provide consumers with
strong reasons for purchasing
immediately such an offer that is only
available for a limited time (e.g. 'Offer
must expire soon'; 'Limited stocks
available') or a special deal usually
accompanied by a time constraint (e.g.
'Order before midnight to receive a free gift
with your order'; 'Two for the price of one
for first 50 callers only'). Additionally,
service convenience is a saving of effort,
in the way that it minimizes the activities
that customers may bear to buy goods
and services.[47] The key to a powerful call-
to-action is to provide consumers with
compelling reasons to purchase promptly
rather than defer purchase decisions.

As consumers approach the actual


purchase decision, they are more likely to
rely on personal sources of information.[48]
For this reason, personal sales
representatives must be well versed in
giving sales pitches and in tactics used to
close the sale. Methods used might
include: ‘social evidence’, where the
salesperson refers to previous success
and satisfaction from other customers
buying the product. ‘Scarcity attraction’ is
another technique, where the salesperson
mentions that the offer is limited, as it
forces the consumer to make a quicker
decision, and therefore less time
evaluating alternatives.[49]

Post-purchase evaluation

Following purchase and after experiencing


the product or service, the consumer
enters the final stage, namely post-
purchase evaluation. The consumer's
purchase and post-purchase activities
have the potential to provide important
feedback to marketers.[50] Foxall
suggested that post-purchase evaluation
provides key feedback because it
influences future purchase patterns and
consumption activities.[51]

The post purchase stage is where the


consumer examines and compares
product features, such as price,
functionality, and quality with their
expectations.[52] Post purchase evaluation
can be viewed as the steps taken by
consumers to correlate their expectations
with perceived value, and thus influences
the consumer's next purchase decision for
that good or service.[53] For example, if a
consumer buys a new phone and his or her
post-purchase evaluation is positive,
he/she will be encouraged to purchase the
same brand or from the same company in
the future. This is also known as "post-
purchase intention".[54] On the contrary, if a
consumer is dissatisfied with the new
phone, he or she may take actions to
resolve the dissatisfaction. Consumer
actions, in this instance, could involve
requesting a refund, making a complaint,
deciding not to purchase the same brand
or from the same company in the future or
even spreading negative product reviews
to friends or acquaintances, possibly via
social media.
After acquisition, consumption or
disposition, consumers may feel some
uncertainty in regards to the decision
made, generating in some cases regret.
Post-decision dissonance (also known as
cognitive dissonance ) is the feeling of
anxiety that occurs in the post purchase
stage, as well as the uneasy feelings or
concerns as to whether or not the correct
decision was made at purchase.[55] Some
consumers, for instance, may regret that
they did not purchase one of the other
brands they were considering.This type of
anxiety can affect consumers' subsequent
behaviour and may have implications for
repeat patronage and customer loyalty.
Consumers use a number of strategies to
reduce post purchase dissonance. A
typical strategy is to look to peers or
significant others for validation of the
purchase choice. Customers have always
been led by the opinions of friends and
family, but nowadays this is corroborated
by social media likes, reviews and
testimonials. Marketing communications
can also be used to remind consumers
that they made a wise choice by
purchasing Brand X.[56]

When consumers make unfavorable


comparisons between the chosen option
and the options forgone, they may feel
post-decision regret or buyer's remorse.
Consumers can also feel short-term regret
when they avoid making a purchase
decision, however this regret can dissipate
over time. Through their experiences
consumers can learn and also engage in a
process that's called hypothesis testing.
This refers to the formation of hypotheses
about the products or a service through
prior experience or word of mouth
communications. There are four stages
that consumers go through in the
hypothesis testing: Hypothesis generation,
exposure of evidence, encoding of
evidence and integration of evidence.
Influences on purchase
decision
Purchasing is influenced by a wide range
of internal and external factors.

Consumer awareness

Consumer awareness refers to the


awareness of the consumption of goods
formed by consumers in the long-term
shopping environment and purchasing
activities.[57]

The change of life concept is the


subjective factor of the change of
consumer awareness. As people's living
standards continue to increase and
incomes continue to increase, people's life
concepts are constantly changing..[58]
Differences in consumer personality are
the internal motivations for changes in
consumer awareness.

Intensified market competition is a


catalyst for changes in consumer
awareness. Many companies have
launched their own branded products in
order to gain a foothold in an increasingly
competitive market.[59] In the face of a
variety of goods and brands, consumers'
brand awareness matures. When people
buy goods, paying attention to the brand
has become a fashion. Faced with the
severe competition situation, companies
began to realize the importance of
implementing brand strategy, and began to
focus on market research, and on this
basis, deeply grasp the consumer's
psychological pulse to improve market
share and brand loyalty.[60]

With the change of people's life concept,


consumers' rational consumption
psychology has become increasingly
prominent. Social Marketing,[61]
Customized Marketing,[62] brand-name
shopping,[63] and the consumer's
perception of the price of the commodity
(directly expressed as the consumer's
sensitivity to price), are all main factors for
understanding consumer attitudes, and
help explain the reaction of market
demand to price changes.[64]

Internal influences on purchase


decision

Internal influences refer to both personal


and interpersonal factors. Social theory
suggests that individuals have both a
personal identity and a social identity.
Personal identity consists of unique
personal characteristics such as skills and
capabilities, interests and hobbies. Social
identity consists of the individual's
perception of the central groups to which
an individual belongs and may refer to an
age group, a lifestyle group, religious
group, educational group or some other
reference group. Social psychologists
have established that the need to belong is
one of the fundamental human needs.[65]
Purchasing behaviour is therefore
influenced by a broad range of internal
factors such as psychological, socio-
economic, demographic and personality
factors. Demographic factors include
income level, psychographics (lifestyles),
age, occupation and socio-economic
status. Personality factors include
knowledge, attitudes, personal values,
beliefs, emotions and feelings.
Psychological factors include an
individual's motivation, attitudes, personal
values and beliefs. Other factors that may
affect the purchase decision include the
environment and the consumer's prior
experience with the category or brand.
Social identity factors include culture, sub-
culture and reference groups. Other
factors that may affect the purchase
decision include the environment and the
consumer's prior experience with the
category or brand.

Motivations and emotions


Maslow's hierarchy suggests that people seek to
satisfy basic needs such as food and shelter before
higher order needs become meaningful

The consumer's underlying motivation


drives consumer action, including
information search and the purchase
decision. The consumer's attitude to a
brand (or brand preference) is described
as a link between the brand and a
purchase motivation.[66] These
motivations may be negative - that is to
avoid pain or unpleasantness, or positive -
that is to achieve some type of reward
such as sensory gratification.[67]

One approach to understanding


motivations, was developed by Abraham
Maslow. Maslow's hierarchy of needs is
based on five levels of needs, organized
accordingly to the level of importance.

Maslow's five needs are:[56]

Physiological
basic levels of needs such as food,
water and sleep
Safety
the need for physical safety, shelter and
security
Belonging
the need for love, friendship and also a
desire for group acceptance
Esteem
The need for status, recognition and
self-respect
Self-actualization
The desire for self-fulfillment (e.g.
personal growth, artistic expression)
Physiological needs and safety needs are
the so-called lower order needs.
Consumers typically use most of their
resources (time, energy and finances)
attempting to satisfy these lower order
needs before the higher order needs of
belonging, esteem and self-actualization
become meaningful. Part of any marketing
program requires an understanding of
which motives drive given product
choices. Marketing communications can
illustrate how a product or brand fulfills
these needs.[59] Maslow's approach is a
generalised model for understanding
human motivations in a wide variety of
contexts, but is not specific to purchasing
decisions.

A decision to purchase an analgesic preparation is


motivated by the desire to avoid pain (negative
motivation)
A decision to buy an ice-cream sundae is motivated by
the desire for sensory gratification (positive
motivation)

Another approach proposes eight


purchase motivations, five negative
motives and three positive motives, which
energise purchase decisions as illustrated
in the table below.[67] These motivations
are believed to provide positive
reinforcement or negative
reinforcement.[68]

Rossiter and Percy's Purchase Motivations & Emotions


Motivation Emotional Sequence

NEGATIVE

Problem removal Annoyance → Relief

Problem avoidance Fear → Relaxation

Incomplete satisfaction Disappointment → Optimism

Mixed approach avoidance Conflict → Peace-of-mind

Normal depletion Mild annoyance → Convenience

POSITIVE

Sensory gratification Dull (or neutral) → Sensory anticipation

Intellectual simulation Bored (or neutral) → Excited

Social approval/ conformity Apprehensive (or ashamed) → Flattered/ proud

In the marketing literature, the consumer's


motivation to search for information and
engage in the purchase decision process
is sometimes known as involvement.[69]
Consumer involvement has been defined
as "the personal relevance or importance
of a message [or a decision]".[70] Purchase
decisions are classified as low
involvement when consumers suffer only
a small psycho-social loss in the event
that the make a poor decision. On the
other hand, a purchase decision is
classified as high involvement when
psycho-social risks are perceived to be
relatively high.[71] The consumer's level of
involvement is dependent on a number of
factors including, perceived risk of
negative consequences in the event of a
poor decision, the product category -
especially the social visibility of the
product and the consumer's prior
experience with the category.[72]
Perception

Part of marketing strategy is to ascertain


how consumers gain knowledge and use
information from external sources. The
perception process is where individuals
receive, organize and interpret information
in order to attribute some meaning.
Perception involves three distinct
processes: sensing information, selecting
information and interpreting information.
Sensation is also part of the perception
process, and it is linked direct with
responses from the senses creating some
reaction towards the brand name,
advertising and packaging. The process of
perception is uniquely individual and may
depend on a combination of internal and
external factors such as experiences,
expectations, needs and the momentary
set.

When exposed to a stimulus, consumers


may respond in entirely different ways due
to individual perceptual processes.[56] A
number of processes potentially support
or interfere with perception. Selective
exposure occurs when consumers decide
whether to be exposed to information
inputs. Selective attention occurs when
consumers focus on some messages to
the exclusion of others. Selective
comprehension is where the consumer
interprets information in a manner that is
consistent with their own beliefs. Selective
retention occurs when consumers
remember some information while rapidly
forgetting other information.[73]
Collectively the processes of selective
exposure, attention, comprehension and
retention lead individual consumers to
favor certain messages over others. The
way that consumers combine information
inputs to arrive at a purchase decision is
known as integration.[74]

Marketers are interested in consumer


perceptions of brands, packaging, product
formulations, labeling and pricing. Of
special interest is the threshold of
perception (also known as the just
noticeable difference) in a stimulus. For
example, how much should a marketer
lower a price before consumers recognize
it as a bargain?[75] In addition, marketers
planning to enter global markets need to
be aware of cultural differences in
perception.[76] For example, westerners
associate the color white with purity,
cleanliness and hygiene, but in eastern
countries white is often associated with
mourning and death. Accordingly, white
packaging would be an inappropriate color
choice for food labels on products to be
marketed in Asia.

Prior experience

The consumer's prior experience with the


category, product or brand can have a
major bearing on purchase decision-
making. Experienced consumers (also
called experts) are more sophisticated
consumers; they tend to be more skillful
information searchers, canvass a broader
range of information sources and use
complex heuristics to evaluate purchase
options. Novice consumers, on the other
hand, are less efficient information
searchers and tend to perceive higher
levels of purchase risk on account of their
unfamiliarity with the brand or category.
When consumers have prior experience,
they have less motivation to search for
information, spend less effort on
information search but can process new
information more efficiently.[77] One study,
for example, found that as consumer
experience increases, consumers consider
a wider range of purchase alternatives
(that is, they generate a larger
consideration set, but only at the product
category level).[78]
External influences on
purchase decision

Purchasing behaviour can also be affected


by external influences, such as culture,
sub-culture, social class, reference groups,
family and situational determinants.

Culture

People with shared interests, such as skaters and


bladers, tend to form informal groups known as
subcultures
Culture is the broadest and most abstract
of the external factors. Culture refers to
the complexity of learning meanings,
values, norms, and customs shared by
members of a society. Cultural norms are
relatively stable over time, therefore,
culture has a major impact on consumer
behaviour. Research studies have
consistently shown that culture influences
almost every aspect of purchasing: it
affects basic psychological domains such
as self-identity and motivation; it also
affects the way that information is
processed and the way that advertising
messages are interpreted.[79]
Marketers, interested in global expansion,
are especially interested in understanding
cross-cultural differences in purchasing
and consumption. For instance, Ferrari,
one of the world's top brands found that
Chinese consumers are very different from
their Western counterparts. Whereas
consumers in the US, UK and Australia
expect to wait 12 months for a custom-
made Ferrari, prospective Chinese buyers
want to drive the vehicle off the showroom
floor. China is an ‘instant-gratification
market’. Buyers see their friends riding
around in a luxury car and want to have the
same as quickly as possible. To meet the
growing demand for luxury goods, Ferrari
and other luxury car makers have been
forced to modify their production
processes for Asian markets.[80]

Subcultures

Harley-Davidson enthusiasts are an example of a


consumption subculture

Subcultures may be based on age,


geographic, religious, racial, and ethnic
differences. More often, however, a
subculture occurs when people with
shared interests form a loose-knit group
with a distinctive identity (sometimes
called consumer tribes). Members of
subcultures are self-selected, and signal
their membership status by adopting
symbols, rituals or behaviours that are
widely understood by other members of
the tribe (e.g. a dress code, hairstyle or
even a unique way of speaking). For
example, within youth culture it is possible
to identify a number of sub-groups with
common interests such as skaters and
bladers, surfers, ravers, punks, skin-heads,
Goths, homies and others.
A different type of subculture is a
consumption subculture which is based on
a shared commitment to a common brand
or product. In other words, consumption
subcultures cut across demographic,
geographic and social boundaries. The
most well-known example of a
consumption subculture is that of Harley-
Davidson motorcycle owners.
Ethnographic researchers who have
studied Harley riders believe that there are
only two types of motor cyclists; namely
Harley owners and the rest.[81] Harley-
Davidson has leveraged the values of this
subculture by establishing the Harley
Owners Group (HOG).[82]
Members of the 'Goth' subculture share a dress code

Subcultures are important to marketers for


several reasons. Firstly. given that
subcultures can represent sizeable market
segments which are profitable and
influential, there are obvious advantages in
developing and selling products and
services that meet the needs of subculture
members. Secondly, and perhaps less
obviously, many new fads and fashions
emerge spontaneously from within these
tribal groups. Trend-spotters are
accordingly interested in studying the
lifestyles and activities of tribes in an
effort to spot new trends before they go
mainstream

Social class

Social class refers to relatively


homogenous divisions in a society,
typically based on socio-economic
variables such as educational attainment,
income and occupation. Social class can
be very difficult to define and measure,
however marketers around the world tend
to use a conventional classification which
divides any given population into five
socio-economic quintiles (e.g. In Australia
the groups AB, C, D, E and FG, where AB is
the top socio-economic quintile, but in
much of Asia the quintiles are labelled I, II,
III, IV and V where I is the top quintile). In
Australia, for example, the AB socio-
economic group account for just 24% of
the population, but control 50% of
discretionary spending.[83] The top
quintiles (i.e. AB socio-economic
segments) are of particular interest to
marketers of luxury goods and services
such as travel, dining-out, entertainment,
luxury cars, investment or wealth
management services, up-market
consumer electronics and designer labels
(e.g. Louis Vuitton).

Reference groups

A reference group is defined as "a group


whose presumed perspectives or values
are being used by an individual as the
basis for his or her judgment, opinions,
and actions." Reference groups are
important because they are used to guide
an individual's attitudes, beliefs and
values.[59] Insights into how consumers
acquire a given value system can obtained
from an understanding of group influence
and group socialisation processes.

The family, a primary reference group, exerts a strong


influence on attitudes and behaviours

The literature identifies five broad types of


reference group; primary, secondary,
aspirational, dissociative and formal:
Primary groups: groups, such as family,
that exert a strong influence on attitudes
and behaviours
Secondary groups: groups such as clubs,
societies, sports teams, political parties,
religions that align with a person's ideas
or values, but exert a less fundamental
influence on the formation of attitudes
and behaviours
Aspirational groups groups to which an
individual does not currently belong, but
possibly aspires to become a member
because the group possesses
characteristics which are admired.
Disassociative reference groups - a group
which has a negative image; individuals
may disapprove of the disassociative
group's values, attitudes or behaviours
and may seek to distance themselves
from such groups.[55]

Opinion Leaders can act like reference


groups in that they exert considerable
social influence because of their product
knowledge, expertise and credibility. In the
marketing literature, opinion leaders are
also known as influencers, mavens and
even hubs.[84] Opinion leaders are specific
to a product category, so that an opinion
leader for computers is not likely to be an
opinion leader for fashion. Typically,
opinion leaders have high levels of
involvement with the product category, are
heavy users of the category and tend to be
early adopters of new technologies within
the category. Journalists, celebrities and
bloggers are good examples of an opinion
leader due to their broad social networks
and increased ability to influence people's
decisions .[55] Indeed, recent evidence
suggests that bloggers may be emerging
as a more important group of opinion
leaders than celebrities.[85]

In order to leverage the value of opinion


leaders in marketing strategies, it is
important to be able to identify the unique
opinion leaders for each category or
situation and this can be very challenging.
Some techniques that can be used are
through key informants, socio-metric
techniques and self-questionnaires.[86]
More often, however, marketers use gut
instinct to identify opinion leaders. For
example, marketers of athletic shoes have
been known to provide gym/ aerobic
instructors with free shoes in the hope that
class members will adopt the same brand
as the instructor. Marketers of cosmetics
and skincare preparations regularly
provide fashion editors with free samples
in the hope that their products will be
mentioned in fashion magazines.
Consumer decision styles

Those who shop for pleasure are said to be


recreational shoppers

A number of theorists have argued that


certain fundamental decision-making
styles can be identified.[87][88] A decision-
making style is defined as a "mental
orientation characterising a consumer's
approach to making choices."[89] Sproles
and Kendall (1986) developed a consumer
style inventory (CSI) consisting of eight
factors, such as price-sensitivity, quality-
consciousness, brand-consciousness,
novelty-seeking, fashion-consciousness
and habit. Based on these factors, the
authors developed a typology of eight
distinct decision-making styles:[90]

Quality conscious/Perfectionist:
Quality-consciousness is characterised
by a consumer's search for the very best
quality in products; quality conscious
consumers tend to shop systematically
making more comparisons and
shopping around to compare quality and
value.
Brand-conscious: Brand-consciousness
is characterised by a tendency to buy
expensive, well-known brands or
designer labels. Those who score high
on brand-consciousness tend to believe
that the higher prices are an indicator of
quality and exhibit a preference for
department stores or top-tier retail
outlets.
Recreation-conscious/ Hedonistic:
Recreational shopping is characterised
by the consumer's engagement in the
purchase process. Those who score
high on recreation-consciousness
regard shopping itself as a form of
enjoyment.
Price-conscious: A consumer who
exhibits price-and-value consciousness.
Price-conscious shoppers carefully shop
around seeking lower prices, sales or
discounts and are motivated by
obtaining the best value for money
Novelty/fashion-conscious:
characterised by a consumer's tendency
to seek out new products or new
experiences for the sake of excitement;
who gain excitement from seeking new
things; they like to keep up-to-date with
fashions and trends, variety-seeking is
associated with this dimension.
Impulsive: Impulsive consumers are
somewhat careless in making purchase
decisions, buy on the spur of the
moment and are not overly concerned
with expenditure levels or obtaining
value. Those who score high on
impulsive dimensions tend not to be
engaged with the object at either a
cognitive or emotional level.
Confused (by over-choice):
characterised by a consumer's
confusion caused by too many product
choices, too many stores or an overload
of product information; tend to
experience information overload.
Habitual / brand loyal: characterised by
a consumer's tendency to follow a
routine purchase pattern on each
purchase occasion; consumers have
favourite brands or stores and have
formed habits in choosing, the purchase
decision does not involve much
evaluation or shopping around.

The Consumer Styles Inventory (CSI) has


been extensively tested and retested in a
wide variety of countries and purchasing
contexts.[91] Many empirical studies have
observed cross-cultural variations in
decisions styles, leading to numerous
adaptations or modifications of the CSI
scale for use in specific countries.[92]
Consumer decision styles are important
for marketers because they describe
behaviours that are relatively stable over
time and for this reason, they are useful
for market segmentation.[93]

Other topics in consumer


behaviour

The purchase of an up-market sports car carries both


financial risk and social risk, because it is an expensive
purchase and it makes a highly visible statement about
the driver
In addition to understanding the
purchasing decision, marketers are
interested in a number of different aspects
of consumer behaviour that occur before,
during and after making a purchase
choice. Areas of particular interest include:
risk perception and risk reduction
activities; brand switching, channel
switching, brand loyalty, customer
citizenship behaviours and post purchase
behavioural intentions and behaviours,
including brand advocacy, referrals, word
of mouth activity etc.
Risk perception and risk
reduction activities

The consumer's perceptions of risk are a


major consideration in the pre-purchase
stage of the purchasing decision.
Perceived risk is defined as "the
consumer's perceptions of the uncertainty
and adverse consequences of engaging in
an activity".[94] Risk consists of two
dimensions: consequences - the degree of
importance or the severity of an outcome
and uncertainty - the consumer's
subjective assessment of the likelihood of
occurrence.[95] For example, many tourists
are fearful of air travel because, although
the probability of being involved in an
airline accident is very low, the
consequences are potentially dire.

The marketing literature identifies many


different types of risk, of which five are the
most frequently cited:[96]

Facilitating trial of a product may help to alleviate risk


perceptions

Financial Risk: the potential financial


loss in the event of a poor decision
Performance Risk (also known as
functional risk): The idea that a product
or service will not perform as intended
Physical Risk: the potential for physical
harm if something goes wrong with a
purchase
Social Risk: the potential for loss of
social status associated with a
purchase
Psychological Risk: the potential for a
purchase to result in a loss of self-
esteem

If a consumer perceives a purchase to be


risky, he or she will engage in strategies to
reduce the perceived risk until it is within
their tolerance levels or, if they are unable
to do so, withdraw from the purchase.[97]
Thus, the consumer's perceptions of risk
drive information search activities.

Services marketers have argued that risk


perception is higher for services because
they lack the search attributes of products
(i.e. tangible properties that can be
inspected prior to consumption).[98] In
terms of risk perception, marketers and
economists identify three broad classes of
purchase; search goods, experience goods
and credence goods with implications for
consumer evaluation processes.[99] Search
goods, which include most tangible
products, possess tangible characteristics
that allow consumers to evaluate quality
prior to purchase and consumption.
Experience goods, such as restaurants
and clubs, can only be evaluated with
certainty after purchase or consumption.
In the case of credence goods, such as
many professional services, the consumer
finds it difficult to fully appreciate the
quality of the goods even after purchase
and consumption has occurred. Difficulties
evaluating quality after consumption may
arise because the cost of obtaining
information is prohibitive, or because the
consumer lacks the requisite skills and
knowledge to undertake such evaluations.
These goods are called credence products
because the consumer's quality
evaluations depend entirely on the trust
given to the product manufacturer or
service provider.[100]

Typical risk-reduction strategies used


include:[101][102]

Prospective purchasers carefully inspect the


h di b f h i i ld
merchandise before purchasing expensive gold
jewellery

Advertising and Promotional Messages:


Pay closer attention to product or brand
related promotion including advertising
messages
Shopping Around: Comparing offers and
prices, inspecting the merchandise
Buy Known Brand: Using a known,
reputable brand as an indicator of
quality merchandise
Buy from Reputable Store: Relying on a
reputable retail outlet as an indicator of
quality
Product Reviews: Reading independent
reviews in main media (e.g. newspapers,
magazines), written by independent
experts
Online product reviews or consumer-
generated testimonials: Reading about
the experiences of other consumers
(e.g. TripAdvisor, Amazon customer
reviews)
Sampling or Limited-scale Trial: Where
practical, obtaining samples, free trial or
a 'test-drive' prior to purchase
Manufacturer Specifications: Reading
information provided by manufacturers
e.g. brochures or specs
Referrals: Obtaining referrals from
friends or relatives
Sales Representatives: Talking to sales
reps in retail outlets
Product Guarantees: Looking for formal
guarantees or warranties

New product adoption and


diffusion of innovations

The diffusion of innovations according to Rogers. As


successive groups of consumers adopt the
innovation(shown in blue), its market share (yellow)
will eventually reach saturation level
Within consumer behaviour, a particular
area of interest is the study of how
innovative new products, services, ideas or
technologies spread through groups.
Insights about how innovations are
diffused (i.e., spread) through populations
can assist marketers to speed up the new
product adoption process and fine-tune
the marketing program at different stages
of the diffusion process. In addition,
diffusion models provide benchmarks
against which new product introductions
can be tracked.
A sizeable body of literature has been
devoted to the diffusion of innovation.[103]
Research studies tend to fall into two
broad categories; general diffusion
research - an approach that seeks to
understand the general process of
diffusion and applied diffusion research -
studies that describe the diffusion of
specific products at particular moments in
time or within given social
communities.[104] Collectively these
studies suggest a certain regularity in the
adoption process; initially few members
adopt the innovation but over time,
successive, overlapping waves of people
begin to adopt the innovation.[105] This
pattern contributes to a generalised S-
shaped curve, as shown in the figure at
right. However, the exact shape and timing
of curves varies in different product
markets such that some innovations are
diffused relatively quickly, while others can
take many years to achieve broad market
acceptance.

The diffusion model developed by Everett


Rogers is widely used in consumer
marketing because it segments
consumers into five groups, based on their
rate of new product adoption.[106] Rogers
defines the diffusion of innovation as the
process by which that innovation is
"communicated through certain channels
over time among the members of a social
system."[107] Thus the diffusion process
has a number of elements, the innovation,
the communication channels, time and the
social system. An innovation is any new
idea, object or process that is perceived as
new by members of the social system.
Communication channels are the means
by which information about the innovation
is transmitted to members of the social
system and may include mass media,
digital media and personal
communications between members of the
social system. Time refers to the rate at
which the innovation is picked up by the
members of the social system.

Table 1:Adopter Categories[108]


Adopter Proportion of
Psycho-social and Demographic Characteristics
Group All Adopters

adopt new products or concepts well ahead of the social


community

venturesome; like new ideas

are willing to accept some uncertainty/ risk in purchase decision-


making

are active information seekers


Innovators 2.5%
cosmopolitan; move in broad social circles

have access to financial resources (which helps absorb potential


losses when innovations fail)

tend to be heavy users or category enthusiasts (e.g. tech-heads


are the first to adopt new communications technologies)

tend to be younger, well-educated and affluent

second group to adopt new products or concepts

not too far ahead of the community in terms of innovativeness

Early have the respect of their social communities


13.5%
adopters potential adopters look to early adopters as role models

are important opinion leaders

higher social status and well-educated

third group to adopt new products or concepts

adopt innovations only marginally ahead of the community


Early average
34%
majority
tend to be more deliberate in purchase decision-making

average social status and education levels

adopt new products or concepts slightly later than average


Late
34% skeptical in purchase decision-making
majority
adoption is often a response to social community pressures
Laggards 16% last group to adopt new products or concepts

highly cautious; need to be confident that an innovation will not


fail before purchasing

are the most risk-averse of all adopter segments; dislike change

traditionalists; resistant to change; look to the past

somewhat isolated within their social community

often adopt innovations when they are becoming obsolete

tend to be older, less well educated and less affluent

A number of factors contribute to the rate


at which innovations are diffused through
a social community.[109]

Facilitating a 'test-drive' can encourage consumers to


speed up adoption rates
Relative advantage: the degree to which
an innovation is perceived to be superior
to alternatives
Compatibility: the extent to which an
innovation fits in with an individual's
values, lifestyles and past experiences
Complexity: the degree to which an
innovation is perceived to be easy or
difficult to understand and use
Trialability: the extent to which an
individual can experiment with the
innovation, on a limited scale, prior to
adoption
Observability: the degree to which the
results of the innovation are visible to
other members of the social community

Innovations with some or all of these


factors are more likely to be adopted
quickly. Accordingly, marketing
communications may stress the
innovation's relative benefits over other
solutions to the consumer's problem.
Marketing messages may also focus on
compatibility and observability. Marketers
can also facilitate adoption by offering
limited scale trial (e.g. samples, test
drives, sale on approval), enabling
consumers to develop and understanding
of the innovation and how it is used prior
to purchase.
The rate of diffusion is speeding up

Studies have shown that the diffusion rate


for many new technologies is speeding
up.[110] The figure, Household Penetration
of Selected Communications Technologies
(left), illustrates U.S. household
penetration rates of selected
communications technologies, measured
as a percentage of all households.[111] The
slope of the curve becomes steeper with
each successive innovation indicating a
more rapid diffusion rate. For example, it
took decades for the telephone to achieve
50 percent penetration rates beginning in
around 1900, but it took less than five
years for cellphones to achieve the same
penetration rates. In order to explain the
increasing pace of adoption, some have
pointed to supply-side issues such as
reduced barriers to entry and lower costs
of innovation,[112][113] while others have
argued that consumers drive adoption
rates because they place a high value on
the convenience of new innovations.[114]

Brand-switching
Brand-switching occurs when a consumer
chooses to purchase a brand that is
different to the regular or customary brand
purchased. Consumers switch brands for
a variety of reasons including that the
store did not have the regular brand or the
consumer's desire for variety or novelty in
brand choice. In the fast moving consumer
goods market (FMCG), the incidence of
switching is relatively high. A great deal of
marketing activity is targeted at brand-
switchers. Rossiter and Bellman have
proposed a classification of consumers
based on brand-loyalty/ switching
behaviour:[115]
Brand Loyals
Purchase preferred brand on almost
every purchase occasion
Favourable Brand Switchers
Exhibit moderate preference for the
brand or brands that they buy and can
be readily enticed to purchase
competing brands
Other Brand Switchers
Normally purchase a competing brand,
possibly because they are unaware of
our brand or due to a negative
experience with our brand
New Category Users
Those who are unaware of a category
but have potential to become new users
Marketers are particularly interested in
understanding the factors that lead to
brand-switching. A global, large sample
survey carried out by Nielsen shows that
four in 10 shoppers (41%) said that getting
a better price would encourage them to
switch brands (or service
provider/retailer); 26% said quality was an
incentive to switch; 15% looked for a better
service agreement and 8% said that
improved features are a switching
incentive.[116] However, cross-cultural
differences were observed among
respondents. Price was the major switch
incentive for more than half of North
Americans (61%) and Europeans (54%) but
price and quality held equal sway in Asia-
Pacific and Middle East/Africa, with
roughly one-third of respondents each in
both regions reporting that both price and
quality were the major incentives to
switching.

The concept of switching costs (also


known as switching barriers) is pertinent
to the understanding of brand switching.
Switching costs refer to the costs incurred
by a consumer when he or she switches
from one supplier to another (or from one
brand to another). Although switching
costs are often monetary, the concept can
also refer to psychological costs such as
time, effort and inconvenience incurred as
a result of switching. When switching
costs are relatively low, as in the case of
many fast moving consumer goods
(FMCG), the incidence of brand switching
tends to be higher. An example of
switching that includes both monetary and
psychological costs is when Android or
Apple users wish to switch to a different
platform, they would need to sacrifice their
data, including purchased music tracks,
apps or media and may also need to learn
new routines to become an efficient user.

Channel-switching
The advent of "category killers", such as Australia's
Officeworks, has contributed to an increase in channel
switching behaviour

Channel-switching (not to be confused


with zapping or channel surfing on TV) is
the action of consumers switching to a
different purchasing environment (or
distribution channel) to purchase goods,
such as switching from brick-and-mortar
stores to online catalogues, or the
internet.[117] A major reason for this
channel switching behaviour is the
convenience that online shopping provides
for consumers. Consumers can shop
online at any hour of the day, without
having to drive, travel or walk to a physical
store, and browse for as little or as much
time as they please. The additional lure of
‘online only’ deals and discounts helps
enforce a consumer’s preference to shop
online. Other factors for this shift are the
globalization of markets, the advent of
Category killers (such as Officeworks and
Kids 'R Us) as well as changes in the legal/
statutory environment. For instance, in
Australia and New Zealand, following a
relaxation of laws prohibiting
supermarkets from selling therapeutic
goods, consumers are gradually switching
away from pharmacies and towards
supermarkets for the purchase of minor
analgesics, cough and cold preparations
and complementary medicines such as
vitamins and herbal remedies.[118]

For the consumer, channel switching


offers a more diverse shopping
experience. However, marketers need to
be alert to channel switching because of
its potential to erode market share.
Evidence of channel switching can
suggest that disruptive forces are at play,
and that consumer behaviour is
undergoing fundamental changes. A
consumer may be prompted to switch
channels when the product or service can
be found cheaper, when superior models
become available, when a wider range is
offered, or simply because it is more
convenient to shop through a different
channel (e.g. online or one-stop
shopping).[119] As a hedge against market
share losses due to switching behaviour,
some retailers engage in multi-channel
retailing.[120]

Impulse buying

Impulse purchases are unplanned


purchases. Impulse buying can be defined
as “a sudden and powerful urge to buy
immediately” and occurs when a
consumer purchases an item which they
had no intention of purchasing prior to
entering the store.[121] Impulse buying can
be influenced by external stimuli such as
store characteristics and sale promotions,
internal stimuli such as enjoyment and
self-identity, situational and product
related factors such as time and money
available, and demographic and socio-
cultural factors such as gender, age, and
education.[122] Stern introduced the four
broad classifications of impulse buying
including pure impulse buying, reminded
impulse buying, suggestion impulse
buying, and planned impulse buying:[123]

Large family-sized cakes are more likely to be a


planned purchase, while the individual portions are
much more likely to be an unplanned purchase

Pure impulse buying


Occurs outside of the normal purchase
behaviour where a consumer
experiences a strong emotion of desire
towards a product that he/she did not
initially plan to buy.[49] Online shopping
largely contributes towards enabling
spontaneous buying. Consistent email
alerts from subscribed websites about
special offers, limited time discounts
and flash sales, on some level, stealthily
create a sense of urgency for the
consumer to purchase the product.
Reminded impulse buying
Occurs when a consumer remembers
the need for a product by seeing it in a
store.[124] This is triggered through
various techniques such as in-store
advertising or sensory marketing.[49] For
example, a consumer may be reminded
to buy ingredients for a barbecue when
he/she drives past a butcher store.
Suggestion impulse buying
Occurs when a consumer sees a
product that they have no prior
knowledge about, envisions a use for it,
and decides that they need it.[125] An
example of suggestion impulse buying
is when a consumer is encouraged to
purchase an electric hand-mixer after
having picked up a brochure from the
baking department of a home-ware
store. The brochure convinces the
consumer of the hand-mixer's
superiority over the wooden spoon she
has been using. Marketing techniques
that can also trigger suggestion impulse
buying include long-term warranties or a
free trial period.[49]
Planned impulse buying
Involves a partially planned intention of
buying, however specific product or
categories are not yet determined.[122] In
this case, the consumer's purchasing
decision can be encouraged by retailing
staff, or even their peers who can
persuade the consumer to purchase a
substitute or provide reassurance about
an alternative brand choice.

Recent research carried out by Nielsen


International suggests that about 72
percent of FMCG purchases are planned,
but that 28 percent of supermarket
purchases are unplanned or impulse
purchases. The top unplanned purchases
in the food category are candy (lollies),
chocolate, cookies (biscuits), frozen
desserts and snacks and the top
unplanned purchases in the non-food
category are cosmetics, air-fresheners,
toothbrushes, hand-soaps and hand/body
lotions.[126] This explains why
supermarkets place these types of
products at the front of the store or near
the checkout where the consumer spends
more time and is more likely to notice
them and therefore more likely to pop
them into the shopping basket. Retailers
use insights from this type of research to
design stores in ways that maximise
opportunities for impulse-buying.

Affect: Emotions, feelings and


mood

The consumer's affective state has


implications for a number of different
dimensions of consumer behaviour,
including information search, evaluation of
alternatives; product choice, service
encounters, complaining and also in
advertising responses. Westbrook (1987,
p. 259) defines affect as a “class of mental
phenomena uniquely characterised by a
consciously experienced, subjective
feeling state, commonly accompanying
emotions and moods"[127] suggesting that
these concepts are closely related.
Research suggests that affect plays an
important role in underlying attitudes, as
well as shaping evaluation and decision-
making.[128]

Consumer researchers have noted the


difficulties separating the concepts of
affect, emotions, feelings and mood. The
line between emotions and mood is
difficult to draw and consumer researchers
often use the concepts
interchangeably.[129] Yet other researchers
note that a detailed understanding of the
relationship between affect and consumer
behaviour has been hampered by the lack
of research in the area.[130] Indeed, within
the consumer behaviour literature, there is
widespread agreement that the role of
emotions is an area that is currently under-
researched and is in need of greater
attention, both theoretically and
empirically.

Information search

Studies have found that people in a


positive mood are more efficient at
information search activities. That, is they
are more efficient at processing
information, are able to integrate
information by identifying useful
relationships and arrive at creative
solutions to problems. Due to their
efficiency processing information, those
who are in a positive mood are generally
quicker to make decisions and easier to
please. Research consistently shows that
people in a positive mood are more likely
to evaluate information positively.[131] As
online environments become more
important as a consumer search tool, it
may be prudent for web designers to
consider site-design issues such as ease
of navigation, lest poor design contribute
to customer frustration thereby
engendering a bad mood and ultimately
leading to unfavourable product/brand
evaluations.

Choice

The immediate hedonic pleasure of eating candy often


outweighs the longer term benefit of a healthier food
choice

Affect may play an important role in


impulse-buying decisions. Research
suggests that consumers place higher
weightings on immediate affective
rewards and punishments, while delayed
rewards receive less weighting.[132] For
instance, the immediate hedonic pleasure
of eating a sweet treat often outweighs
the longer term benefits of eating a
healthy alternative such as fruit. This
occurs because the immediate emotional
gain is a strong driver, and one that
consumers can readily visualise whereas
the more distant goal lacks sufficient
strength to drive choice.

Customer experience
Customers who are in a bad mood are
more difficult to please. They are slower to
process information and consequently
take longer to make decisions. They tend
to be more argumentative and are more
likely to complain.

Customer satisfaction

The relationship between affect and


customer satisfaction is an area that has
received considerable academic attention,
especially in the services marketing
literature.[133] The proposition that there is
a positive relationship between affect and
satisfaction is well supported in the
literature. In a meta-analysis of the
empirical evidence, carried out in 2001,
Szymanski et al., suggest that affect may
be both an antecedent to and an outcome
of satisfaction. Emotions elicited during
consumption are proposed to leave
affective traces in memory, traces that are
available for consumers to access and
integrate into their satisfaction
assessments.[134]

a 2011 meta-analysis[135] illustrates how


both repurchase intent and loyalty enjoy a
strong positive relationship (0.54) with
customer satisfaction.. Another [136] meta-
analysis finds: ‘The results indicate that
both cognitive-related variables (including
brand awareness, brand personality, and
brand identity) and hedonic-related
variables (including hedonic attitude,
entertainment, and aesthetic appeal) have
significant impacts on quality and value
perceptions towards the brand (including
perceived quality, reputation, brand image,
perceived value, commitment, and trust).
In addition, these variables are all
significant predictors of brand loyalty.’

A third [137] meta-analysis, from 2013


elaborates on the concept of brand
personality (bp): ‘First, the key drivers of
BP are communication with hedonic
benefit claims, branding activities, a
brand’s country-of-origin, and consumer
personalities. Second, the study finds that
the effects of BP are stronger for mature
brands than for brands in the early life
cycle stages. Third, sincerity and
competence have the strongest influence
on brand success variables (e.g., brand
attitude, image, commitment, purchase
intention), while excitement and
ruggedness have the weakest influence on
brand attitude and brand commitment

Advertising
Emotion can play an important role in
advertising. In advertising, it is common to
identify advertising with two different
approaches to persuasion: (a) thinking
ads- those that require cognitive
processing (also known as the central
route to persuasion) and, (b) feeling ads -
those that are processed at an emotional
level (also known as the peripheral
route).[138] Advertisers can bypass
cognitive, rational processing which can
lead to counter-arguing by simply
appealing to the emotions. Neuro-imaging
studies suggest that when evaluating
brands, consumers primarily use emotions
(personal feelings and experiences) rather
than information (brand attributes,
features, and facts).[139]

It is relatively widely accepted that


emotional responses require fewer
processing resources (i.e. are easier) and
also result in more enduring associations
with the brand being advertised.[140]
Feelings elicited by the advertising
message can shape attitudes towards the
brand and to the advertisement.[141]

Customer loyalty

Customer loyalty, defined as “the


relationship between an individual's
relative attitude and repeat patronage"
(Dick and Basu, 1994: p. 99). Thus, by
definition, loyalty has both an attitudinal
component and a behavioural component.
Dick and Basu proposed four types of
loyalty based on relative attitude and
patronage behaviour:[142]

Dick and Basu's Loyalty Matrix

No Loyalty
Characterised by low relative attitude
and low repeat patronage behaviour.
May occur when competing brands are
seen as similar or in the case of new
brands (or categories) where insufficient
time has elapsed for loyalty to become
established.
Spurious Loyalty
Characterised by low relative attitude
and high repeat patronage. Spurious
loyalty occurs when the consumer
undertakes repeat purchasing due to
situational factors such as access,
convenience or shelf placement.
Spurious loyalty can also occur when
there are no genuine alternatives or the
consumer is ‘locked-in’ to purchasing a
given brand due to some quasi-
contractual arrangement or membership
status which creates difficulties for
switching. In other words, where
switching costs are relatively high, high
patronage behaviour may be observed
despite the absence of a favourable
attitude towards the brand. An example
would be a consumer who always
purchases petrol from the same outlet
on the way to work because there are no
other outlets in the vicinity.
Latent Loyalty
Characterised by high relative attitude
and low repeat patronage. Latent loyalty
occurs when situational factors over-
ride strong favourable attitudes. For
example, a person may have a preferred
restaurant but may not patronize it, due
to the preferences of dining
companions.
Loyalty
(i.e. true loyalty) Characterised by
favourable attitude and favourable
patronage behaviour. For marketers, true
loyalty is the ideal situation.
Frequent flyer schemes are among the most well
known of the reward programs

Play media
Rewards Card Programs - explained
Loyalty marketing programs are built on
the insight that it costs 5-20 times more to
acquire a new customer than to retain an
existing customer.[143] Marketers use a
variety of loyalty programs to strengthen
customer attitudes towards the brand (or
service provider/ retailer) in order to retain
customers, minimise customer defections
and strengthen loyalty bonds with existing
customers. Broadly there are two types of
program: reward and recognition
programs. In a Reward Program, the
customer accumulates points for each
purchase, and the points can subsequently
be exchanged for goods or services.[144]
Recognition Programs operate on a quasi-
membership basis where the consumer is
issued with a card that upon presentation
leads to various entitlements such as free
upgrades, special privileges or access to
products/services that are not normally
available to non- members, and that
acknowledge the loyal customer's "VIP"
status.[145] For example, a hotel might
recognise loyal patrons by providing a
complimentary fruit bowl and bottle of
champagne in the room on arrival.
Whereas reward programs are motivated
by the consumer's desire for material
possessions, recognition programs are
motivated by the consumer's need for
esteem, recognition and status. Many
commercial loyalty programs are hybrid
schemes, combining elements of both
reward and recognition. In addition, not all
reward programs are designed to
encourage loyalty. Certain reward
programs are designed to encourage other
types of positive customer behaviour such
as the provision of referrals or providing
positive word-of-mouth (WOM)
recommendations.[146]

Loyalty marketing can involve the use of


databases and sophisticated software to
analyse and profile customer loyalty
segments with a view to identifying the
most desirable segments, setting goals for
each segment and ultimately attempting
to increase the size of the loyal customer
base.

Customer citizenship
behaviour

Customer citizenship behaviour refers to


actions that are not part of the customer's
normal behaviour, that are of a voluntary or
discretionary in nature and which are
thoughtful, considerate and helpful.
Citizenship behaviour often requires some
type of sacrifice on the part of
customers.[147] Service marketers are
particularly interested in citizenship
behaviour because it harnesses the
consumer's labour power, and therefore
increases organisational efficiency. It also
has the potential to improve service
quality.

The services marketing literature identifies


a number of distinct types of citizenship
behaviour:[148][149]

Voice
When customers direct their complaint
to the service provider in order to rectify
and maintain the relationship
Display of Affiliation
When customers communicate with
others their relationship with the
organization e.g. provide word-of-mouth
referrals.
Policing
The observation of other customers to
ensure their appropriate behaviour
Flexibility
Customer willingness to adapt to
situations beyond their control.
Service Improvement
Providing ideas and suggestions which
may aid in the organization's
improvement.
Positive Word-of-mouth Referral or
Recommendation
Favourable communication regarding
brand, product, an organization or a
service.
Benevolent Act of Service
A willingness to help employees in
performing service.

Internet consumer behaviour

Traditional models of consumer behaviour


were developed by scholars such as
Fishbein and Ajzen [150] and Howard and
Sheth [151] in the 1960s and 70s. More
recently, Shun and Yunjie have argued that
online consumer behaviour is different to
offline behaviour and as a consequence
requires new theories or models.[152]
Research has identified two types of
consumer value in purchasing, namely
product value and shopping value. Product
value is likely to be similar for both online
and offline shoppers. However, the
shopping experience will be substantially
different for online shoppers. In an offline
shopping environment, consumers derive
satisfaction from being within the physical
store environment or retail landscape
(hedonic motivations). In the case of
online purchasing, shoppers derive
satisfaction from their ability to navigate a
website and the convenience of online
searching which allows them to compare
prices and 'shop around' with minimal time
commitment. Thus the online consumer is
motivated by more utilitarian factors.[153]

Different types of online


behaviour

Consumers may use online platforms for


various stages of the purchase decision.
Some consumers use online sources
simply to acquire information about
planned purchases. Others use online
platforms for making the actual purchase.
In other situations, consumers may also
use online platforms to engage in post-
purchase behaviours, such as staying
connected with a brand by joining a brand
community. Or they may become a brand
advocate by posting a product review
online, or providing brand referrals via
social media. Some e-commerce providers
have encountered a challenge in courting
consumers who seek information online,
but still prefer to turn to bricks and mortar
retailers for their purchase. To understand
the needs and habits of these and other
kinds of online shoppers, online marketers
have segmented consumer markets into
different kinds of online behaviour in
accordance with their online behavioural
characteristics. Lewis and Lewis (1997)
identified five market segments based on
the way that consumers use the Internet in
the purchase decision process:[154]
1. "Directed Information-seekers" are
users that primarily look for
information about a product or
service online, but there is no
guarantee that they may be converted
into online buyers.
2. "Undirected Information-seekers" are
newcomers to a product or service.
They are more likely to interact with
online prompts, and click through to
web pages linked in advertising.
3. "Directed Buyers" have a
predetermined mindset and wish to
purchase a specific product or
service online.
4. "Bargain Hunters" are price-sensitive
users that like to discover products
during sales promotions. For these
users, discounts are a major
attraction to online sales conversion.
5. "Entertainment Seekers" are online
consumers that are attracted to
marketing delivered as a fun activity.
Interactive online games could be
useful in attracting this kind of
customer.
A typology of online consumer
behaviour

Wendy Moe (2003)[155] argues that in the


offline environment, consumers who are
shopping in stores can be easily classified
by experienced sales employees only by
watching their shopping behaviours.
These sales will approach them initiatively
because they knew they look like the kind
of consumers who are really seeking
something to purchase, while other
"hanging around" shoppers will generally
be ignored by the experienced sales. Such
classification may not appear online, but
Moe and Fader[156] argued that by it is
feasible to predict practical buying, surfing
and searching action online by
investigating click patterns and repetition
of visit within online behaviour. In addition,
a report of E-consultancy about
"benchmarking of user experience"
outlined three kinds of online consuming
behaviour as a valuable classification for
the research of design of web pages to
better serve different kinds of consuming
behaviour. The three categories
are:"trackers","hunters" and "explorers".

1. "Trackers" are the online consumers


who are exactly looking for a product
that they definitely wish to buy. They
use the Internet for the information
about its price, delivery methods
post-purchase service and so on.
Once they have found the proper
information, little effort is needed to
let them do the business.
2. "Hunters" just know the categories of
the product that they need, for
instance, a novel for leisure time.
However, they haven't made specific
decision on whose novel to buy. They
use the Internet to find a list of
product of their needed categories to
make comparison. This kind of online
consumer needs advice and help to
do their business.
3. "Explorers" don't even have the
categories of product on their minds.
In fact, they just want to buy
something online. There is more
uncertainty of this type of online
consumers.
Influence of the Internet on buying
process
Table[157] Internet's impact on buying process
2 Aware of 6 Post-
product 4 Evaluate purchase
Stage in 3 Supplier
need and 5 evaluation
1 Unaware
buying process search Purchase
develop select and
specification feedback

Lead
Position Support us
generation Assist
Communications features, and
Generate purchase Facilitate
(from range
objectives awareness benefit and purchase retain
of decision
brand business
customers)

Personalis
Web site
Internet Banner Search Web site web site
content
marketing advertising, engines, content Web site content
(plus search content
techniques PR, links intermediates intermediates and
support)
interaction
As the preceding table shows, the first row
indicates the process of a consumer
buying a new product, while the second
and third row illustrates the positive
influences the Internet could have on
buying process by creating effective
communications with online consumers.
For example, suppose a consumer
carelessly see an advertisement about
laptops on Wechat, a popular Chinese
social media developed by Tecent. He
begins to feel that his laptop is a bit out of
date and want to buy a new one, which the
outcome of good advertisement placed on
the daily Internet tool. He doesn't know
anything about how to buy a new one as
business change so fast today, so he
search on Google to find out the answer.
On the result page, what he finds out is the
promotional ads which mainly come from
JD.com and Taobao, RingToRed.Com two
main Chinese competitors of online
retailer at this field. As always, he used to
prefer JD.com, which provides comparison
in detail on brands, price, place and ways
of payment and delivery. After careful
selection, he makes his order through
payment of Wechat, which was placed
inside of JD.com. JD.com has one of the
fastest distribution channels within China
and it support excellent post-purchase
service to maintain its position in the
market.

Research methods used


To gain insights into consumer behaviour,
researchers uses the standard battery of
market research methods such as surveys,
depth interviews and focus groups.
Increasingly, researchers are turning to
newer methodologies and technologies in
an effort to seek deeper understandings of
why consumers behave in certain ways.
These newer methods include
ethnographic research (also known as
participant observation) and neuroscience
as well as experimental lab designs. In
addition, researchers often turn to
separate disciplines for insights with
potential to inform the study of consumer
behaviour. For instance, behavioural
economics is adding fresh, new insights
into certain aspects of consumer
behaviour.

Ethnographic research

Product usage studies are used to improve packaging


design
Ethnographic research or ethnography has
its origins in anthropology. However,
marketers use ethnographic research to
study the consumer in terms of cultural
trends, lifestyle factors, attitudes and the
way that social context influences product
selection, consumption and usage.
Ethnographic research, also called
participant observation, attempts to study
consumer behaviour in natural settings
rather than in artificial environment such
as labs. Different types of ethnographic
research are used in marketing
including;[158]
Observed product usage: observing
regular product usage at home or work,
to gain insights into how products are
opened, prepared, consumed, stored,
disposed etc. to gain insights into the
usefulness of packaging, labelling and
general usage
Day-in-the-life studies: extended visits
during product usage situations to gain
insights into norms and consumer
expectations
Accompanied purchase or shop-alongs:
researcher accompanies a shopper on a
purchase expedition to gain insights into
consumer responses to merchandising
and other sales tactics
Cultural studies: similar to traditional
ethnography; extended stays with a
group or tribe with a view to uncovering
the fundamental rules and conventions
that govern behaviour
Guerilla ethnography: random
observations in public settings to help
establish research questions or to gain
quick insights into specific behaviours
Mystery shopping: observations in the
retail context with a view to gaining
insights into the customer's service
experience
Multiple methodologies: combining
ethnographic research methods with
conventional research techniques with a
view to triangulating results

Trendspotters such as Faith Popcorn's


BrainReserve make extensive use of
ethnographic research to spot emergent
trends.[159]

Consumer neuroscience

Neuromarketing uses sophisticated biometric sensors


h EEG t t d t ifi
such as EEG to study consumer responses to specific
stimuli

Consumer neuroscience (also known as


neuromarketing) refers to the commercial
use of neuroscience when applied to the
investigation of marketing problems and
consumer research. Some researchers
have argued that the term consumer
neuroscience is preferred over
neuromarketing or other alternatives.[160].
.[161].

Consumer neuroscience employs


sophisticated bio-metric sensors, such as
electroencephalography (EEG), functional
magnetic resonance imaging (fMRI) and
eye tracking,[162] to study the ways that
consumers respond to specific stimuli
such as product displays, brands,
packaging information or other marketing
signals. Such tests reveal stimuli that
trigger the brain's pleasure centre.

Consumer neuroscience has become a


mainstream component of consumer
research methods. International market
research company, Nielsen Research, has
recently added neuromarketing to its
services by acquiring Innerscope, a
company specialising in neuromarketing
research thus enabling Nielsen to add
neuromarketing research to the suite of
services available to clients.[163]

Consumer neuroscience research has led


to some surprising findings:

Framing price or value


For example, one study reported on a
magazine subscription where potential
subscribers were offered two options:
an online subscription for $59, or a
combined online and print for $129 a
year. Most people chose the online only
option. However, when a third option
was introduced: print only for $129 (i.e.
the decoy), the online and print option
seemed like better value and a
significant number of people switched
to that option. In other words, the decoy
price assists in framing value.[164]
Marketers use a variety of methods to
frame value: e.g. quote monthly payment
options rather than a single all-inclusive
price.
Choice Fatigue
Research by Sheena Iyengar
experimented with the number of
gourmet jams on display. When
consumers were faced with a large
number of alternatives (24 jams), 60% of
consumers stopped and looked but only
a few (3%) actually made a purchase.
However, when consumers faced with
fewer brands (6 jams), were more likely
to make a purchase with 30% going on
to buy something. Similar results have
been observed in other categories. The
findings suggest that while consumers
appreciate being given some choice, the
process of making a selection is painful
and can lead to choice fatigue.[165] An
issue for marketers and retailers is to
determine the ‘sweet spot’ where
consumers are given sufficient choice to
satisfy their desire for variety, but not
become overwhelmed by it.
Decision Paralysis
One study examined the wording used
to solicit philanthropic donations.
Consumers were exposed to variants in
the advertising copy execution: "Would
you be willing to help by giving a
donation?" and "Would you be willing to
help by giving a donation? Every penny
will help." Those given the second option
were almost twice as likely to donate.
The researchers concluded that people
are more likely to take action when given
parameters. By clarifying that “even a
penny” could make a difference, the
second line provides guidance and
makes the request more achievable.[166]
For marketers, the implication is that
when asking consumers to take an
action, specifying a small step helps to
break through the action paralysis. This
finding also suggests that even small
differences in advertising copy can lead
to improved outcomes.

See also
Advertising management - explains how
consumer behaviour concepts are used
to develop advertising strategies
Advertising research - provides
background on how consumer
behaviour concepts inform research
methods used in understanding
advertising effectiveness
Attitude-toward-the-ad models
Brand awareness - detailed explanation
of brand awareness
Brand management - explains how
consumer behaviour concepts are used
to manage brand awareness and brand
growth through the product-life cycle
Buying Decision Process - offers an
alternative explanation to the consumer
buying decision process
Consumer socialization
Consumer confusion
Food and Brand Lab
Marketing research - provides
background on how consumer
behaviour concepts inform the research
methods used in marketing, consumer
behaviour, brand awareness and
advertising management
Predictive buying
Product life-cycle management
(marketing) - detailed explanation of
how consumer awareness changes over
the product's life-cycle, and how this
calls for different strategies at each
stage
Window shopping

References
1. Tadajewski, M., "A History of Marketing

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