Understanding Consumer Behavior

Consumer Behaviour

• Marketing experts aim to understand consumer purchasing motivations, as this knowledge is key, though often unstated by consumers
• Understanding consumer responses to marketing is critical

Consumer Behaviour Defined

• Consumer behaviour is the study of how individuals/groups acquire, consume, and dispose of products

Consumer Behaviour Process

• The consumer behaviour process includes identifying a need/desire (explicit or implicit), making a purchase, and product disposal

Influences

• The consumer behaviour process often involves multiple people
• For example, a mother purchases, but a baby uses; influencers, family, and designers can also play a part.

The Meaning of Consumption

• Consumers buy brands for their symbolic meaning for bonding with those who share preferences and to express their image/personality

Consumer Culture Theory (CCT)

• Consumption is a meaning-making process that uses products/services as symbols for social, personal, or cultural identities
• Focus is on emotional/fantasy aspects and rituals in buying/using
• It also Investigates if consumers resist or challenge dominant market strategies
• Qualitative practices in research includes ethnography, in-depth interviews, and digital ethnography

Business and Consumer Behaviour

• Consumer behaviour is critical for informing marketing strategies
• Firms exist to address consumer needs and to understand motivations

Impact of the Unconscious Mind

• The unconscious mind influences purchases without a consumer realizing
• Defaults impact consumer decision-making until conscious decisions are made
• Willpower reserves influence decision-making

Decision Making

• Habitual/routine decisions involve low-involvement, frequently purchased, low-cost items requiring minimal effort.
• For current customers marketers maintain brand quality, stock, and value
• For new customers marketers should break normal buying habits, use promos to create attention, using a repeated focus message
• Example: Purchase milk for 13 weeks and get the 14th week free

Limited Decision Making

• Buying products occasionally takes a moderate amount of time when searching for information
• It involves low to medium involvement with low to moderate-cost goods
• New brands may be considered

Strategies for Limited Decision Making

• Marketers provide reasons to buy the brand
• Nike (find your greatness) shows "when you buy nike, you can be great"

Extended Decision Making

• Extended decision making involves a high degree of involvement when purchasing expensive/infrequent products
• It involves high economic/performance/psychological risk
• Spend a significant amount of time seeking information

Strategies for Extended Decision Making

• Marketers create longer and more informative promotion messages
• Volvo's "The Epic Split" exemplifies this strategy

Sharing Economy

• A trend for consumers that involves access over ownership, peer-to-peer transactions, and digital platforms
• Uber and Lyft are example in transportation
• Airbnb is an example in accommodation

Authenticity and Personalization

• Focus on genuine brand communication
• Emphasis on customization, tailored products, storytelling, and heritage
• Sports shows: Nike by You (NikeID)

Diversity and Multiculturalism

• Highlights inclusive representation, cultural sensitivity, and diversity
• Fenty Beauty and Dove's "real beauty" campaign are beauty product examples
• Ben & jerry's and tony chocolonely are examples of food brands

Healthy and Ethical Living

• Focus on health-conscious and sustainable choices
• Emphasis on personal wellness and mental health
• Clothing: Patagonia (don't buy this jacket)" and Cars: Tesla

Consumer Behaviour Defined

• Consumer behaviour involves the processes individuals/groups use to select, purchase, use, or dispose of items, services, ideas, or experiences to satisfy their desires
• The study incorporates the entire decision-making process, from problem recognition to post-purchase behaviour
• Consumers includes individuals and organizations, like buying a smartphone or software for a business

What Consumption Means

• Consumption incorporates acquiring, using, and disposing of goods/services Consumers buy products not only for their function, but for their meaning like displaying a social status
• Products/brands become part of our identity

Brands

• Consumers interact with many brands through advertising, social media, and product use
• Consumers often buy brands that reflect their self-image
• Brands are products/companies/individuals that have characteristics beyond function
• Nike is associated with athleticism, social justice, and youth culture

Marketers

• Marketers must understand consumers to develop effective strategies
• The marketing concept is for businesses to satisfy consumer needs
• BMW invests in electric vehicles for sustainability

Social Media

• Social media is an interactive communication platform for users to engage/share
• Social media creates a horizontal revolution with information flow between consumers, facilitated by platforms like TikTok, Instagram, and LinkedIn

AI

• Artificial intelligence (AI) uses machines/software that simulate intelligence to assist with consumer tasks, like chatbots
• The metaverse is a digital universe for brand/product interaction
• AI/metaverse shape consumer experiences, from personalized online shopping to brand engagement

Big Data

• Data analytics personalizes advertising, trend prediction through big data collection/analysis
• Brands/cultural trends spread faster with global marketing efforts
• The K-pop and korean beauty products are an example

Advertising

• Consumers create/share brand-related content, influencing purchasing decisions
• Online reviews are a key point of user-generated-content

Consumer Trends

• Consumer behaviour evolves with societal, technological, and environmental factors
• Consumers often buy on emotional needs than what they need

Ethical Consumerism

• There is rising ethical consumerism
• Companies expected to follow sustainability through practices that engage in fair labour
• Consumers choose brands that are favour environmentally friendly

Consumer Behaviour Analysis

• Disciplines that analyse consumer behaviour include;
• Marketing examines how businesses influence consumer choices
• Psychology explores motivations and decision-making
• Sociology looks at the social and cultural impacts
• Anthropology studies the cultural significance

Shopping Experience

• Shopping is more than a necessity, it has a form of entertainment
• Retail therapy manages emotions
• Retail stores use lighting, music, scents to create an experience to encourage spending
• Marketers use consumer journeys to map store entry to purchase decision

Consumer Decisions

• Point-of-purchase (POP) stimuli uses displays to influence decisions
• Retailers use displays and promotional materials to influence decision-making
• Unplanned buying occurs when consumers buy items they did not originally intend to buy, influenced by store design

Satisfaction

• Post-purchase satisfaction leads to repeat purchases and brand loyalty
• Meeting if expectations are exceeded will create satisfaction
• Discomfort or dissonance occurs when expectations are not met; brands use reassurance to counter that

E-Commerce

• Shifting from retail to online stores gives consumers convenience, variety, and competitive pricing
• Sephora's virtual try-on technology is an example of shopping apps

Digital Currency

• Bitcoin & blockchain is the use of digital currency for secure transactions
• Cart abandonment causes retailers to retarget ads and discounts for purchases

Consumption Types

• Liquid consumption uses short-term ownership such as rentals
• Netflix is an example

Thrifting

• Thrifting/second-hand shopping increased in popularity
• Recommerce re-selling used goods through eBay and Poshmark etc

Share

• Sharing economy lets consumes share, rent or borrow
• Uber and lyft is ride-sharing
• Airbnb is home-sharing
• rise of secondary market leads a shift from traditional ownership

Climate Crisis

• Consumers are more aware of the environmental usage
• Recycling uses repoursing materials
• Upcycling use creatively reusing items

Underground Economy

• The underground economy uses informal business
• Street vendors are examples

Negatives

• Addictive consumption creates a dependence on usage
• Compulsive consumption a repetitive buying pattern of emotional distress
• Hoarding means accumulation
• Squandering sequences use excessive spending
• Dark design tricks consumers into buying due to hidden fees