Understanding Consumer Behavior

• Consumer behavior examines the decision-making processes individuals, groups, and organizations use to fulfill their desires and needs
• Consumer behavior involves psychological, social, and cultural factors

Key Aspects of Consumer Behaviour

• Need recognition is the initial step where customers realize a difference between their current situation and what they want
• Information search comes next, using internal sources (like memory) and external ones (friends, ads, internet)
• Evaluation of alternatives means assessing choices based on criteria like quality, price, and features
• Purchase decision is when the service or product is selected, and this is influenced by price and ease of access
• Post-purchase behavior involves assessing satisfaction and the possibility of buying again, while also dealing with cognitive dissonance

Psychological Factors

• Motivation is the force that drives consumer actions and arises from needs and desires
• Perception involves choosing, arranging, and interpreting data to create a relevant view of the world
• Learning involves changes in actions that result from experience
• Beliefs are convictions a consumer holds about specific services or products

Social Factors

• Culture shapes basic values, perceptions, desires, and behaviors, learned from societal institutions such as family
• Social class defines society divisions where members have shared interests and values
• Reference groups directly (face to face) or indirectly shape someone’s attitude

Cultural Factors

• Subcultures have shared values based on similar experiences
• Cross-cultural marketing modifies marketing plans to suit consumer needs across different cultures

Types of Buying Decisions

• Complex buying behavior is present when customers feel very involved in the purchase and see real differences across brands
• Dissonance-reducing buying behavior is present when customers are highly involved, yet see minimal differences across brands
• Habitual buying behavior is present when there is low involvement from the consumer and minimal differences across brands
• Variety-seeking buying behavior is characterized by low involvement from consumers but they recognize major difference in brands

The Buyer Decision Process

• Problem recognition involves identifying a need
• Information search involves seeking solutions
• Evaluation of alternatives means weighing solution options
• Purchase decision involves to buy or not to buy
• Post-purchase behavior involves evaluation of the purchase

Factors Influencing Information Search

• Number of brands examined has an impact on decision making
• Number of sellers considered affects choice
• Number of product attributes reviewed affects evaluation
• Number of external information sources used serves as a guide

Business Buyer Behavior

• Business buyer behavior is when organizations purchase items to use in operations, for resale, or for renting to others
• It entails more professionals and decision makers

Characteristics of Business Markets

• Fewer but larger buyers are the norm
• Derived demand indicates business demand is from the demand for consumer goods
• Inelastic demand is common
• Fluctuating demand means rapid shifts in demand in comparison to consumer markets
• Geographic concentration of producers is observed

Types of Business Buying Situations

• Straight rebuy is a routine reorder
• Modified rebuy refers to changes to prices, product requirements, or suppliers
• New task buying is a first purchase

Participants in the Business Buying Process

• Users are those who use the service
• Influencers offer key insights and define all specifications
• Buyers have the power to choose vendors and negotiate purchase agreements
• Deciders can approve the final vendor selections
• Gatekeepers manage data shared with others

Stages of the Business Buying Process

• Problem recognition starts with spotting a need
• General need description describes product characteristics
• Product specification details all tech specs
• Supplier search involves seeking vendors
• Proposal solicitation directly asks for proposals for all qualified vendors
• Supplier selection is the act of choosing a vendor
• Order-routine specification creates order process
• Performance review analyzes vendor performance

E-Procurement

• E-procurement is purchasing through digital platforms
• Reverse auctions, company buying pages, and online trades are typical
• This lowers costs and accelerates processing

Influences on Business Buyers

• Environmental factors involve economic factors and tech changes
• Organizational factors deal with policies and structure
• Interpersonal factors involve influence and expertise
• Individual factors involve motivations

Sustainable Consumption

• Sustainable consumption is all about using goods and services while reducing detrimental impacts on the planet and people, while still addressing basic needs
• It means cutting back on consumption and supporting green products

Factors Driving Sustainable Consumption

• Heightened understanding of ecological issues, including pollution, climate change, and the loss of resources
• Expanded consumer desire for sustainable services
• Governmental incentives and rules that promote eco-friendly actions
• Corporate social responsibility initiatives

Strategies for Promoting Sustainable Consumption

• Informing consumers via awareness efforts that explain the consequences of their choices regarding social and environmental well-being
• Eco-labels that enable consumers to easily find green products
• Launching incentives such as subsidies and tax breaks for purchasing green products
• Improving circularity by designing products that reduce waste
• Creating business models such as recycle, repair, and reuse

Challenges to Sustainable Consumption

• Sustainable products are more expensive
• Information on sustainable options is lacking
• Consumers may also distrust green marketing
• Consumers priorities such as affordability conflict with environmental concerns
• Market and physical obstacles hinder the adoption of eco practices

Ethical Considerations in Consumer Behaviour

• Marketing ethics is the guiding moral principles behind decisions
• Typical ethical issues include false advertising, product safety, and privacy
• Consumer privacy is a growing issue because companies collect personal information
• Responsible marketing aims to ensure a balance between businesses, consumers, and society

The Impact of Technology on Consumer Behaviour

• Online shopping has changed product purchases
• Social media is a majorly influential platform for consumer interaction and marketing
• Mobile devices have allowed consumers to buy at anytime from anywhere
• To enhance customer service, AI is being utilized to personalize marketing

Emerging Trends in Consumer Behaviour

• Personalization modifies products to individual needs
• Experiential marketing emphasizes creating experiences for consumers
• Transparency ensures customers get accessible info about products
• Consumer empowerment gives decision making power to consumers