INTRODUCTION TO
MARKETING

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Lars Perner, Ph.D.
Assistant Professor of Clinical Marketing
Department of Marketing
Marshall School of Business
University of Southern California
Los Angeles, CA 90089-0443, USA
(213) 740-7127

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Consumer Behavior

Note: The issues discussed below are covered in more detail at consumer behavior section of this site.

Consumer behavior involves the psychological processes that consumers go through in recognizing needs, finding ways to solve these needs, making purchase decisions (e.g., whether or not to purchase a product and, if so, which brand and where), interpret information, make plans, and implement these plans (e.g., by engaging in comparison shopping or actually purchasing a product).

Sources of influence on the consumer.  The consumer faces numerous sources of influence. 

Influences on Consumer Behavior

Often, we take cultural influences for granted, but they are significant.  An American will usually not bargain with a store owner.  This, however, is a common practice in much of the World.  Physical factors also influence our behavior.  We are more likely to buy a soft drink when we are thirsty, for example, and food manufacturers have found that it is more effective to advertise their products on the radio in the late afternoon when people are getting hungry.  A person’s self-image will also tend to influence what he or she will buy—an upwardly mobile manager may buy a flashy car to project an image of success.  Social factors also influence what the consumers buy—often, consumers seek to imitate others whom they admire, and may buy the same brands.   The social environment can include both the mainstream culture (e.g., Americans are more likely to have corn flakes or ham and eggs for breakfast than to have rice, which is preferred in many Asian countries) and a subculture (e.g., rap music often appeals to a segment within the population that seeks to distinguish itself from the mainstream population).   Thus, sneaker manufacturers are eager to have their products worn by admired athletes.  Finally, consumer behavior is influenced by learning—you try a hamburger and learn that it satisfies your hunger and tastes good, and the next time you are hungry, you may consider another hamburger.

Consumer Choice and Decision Making: Problem Recognition.  One model of consumer decision making involves several steps. The first one is problem recognition—you realize that something is not as it should be.  Perhaps, for example, your car is getting more difficult to start and is not accelerating well.    The second step is information search—what are some alternative ways of solving the problem?  You might buy a new car, buy a used car, take your car in for repair, ride the bus, ride a taxi, or ride a skateboard to work.  The third step involves evaluation of alternatives.  A skateboard is inexpensive, but may be ill-suited for long distances and for rainy days.   Finally, we have the purchase stage, and sometimes a post-purchase stage (e.g., you return a product to the store because you did not find it satisfactory).  In reality, people may go back and forth between the stages.  For example, a person may resume alternative identification during while evaluating already known alternatives.

Consumer involvement will tend to vary dramatically depending on the type of product.  In general, consumer involvement will be higher for products that are very expensive (e.g., a home, a car) or are highly significant in the consumer’s life in some other way (e.g., a word processing program or acne medication).

It is important to consider the consumer’s motivation for buying products.  To achieve this goal, we can use the Means-End chain, wherein we consider a logical progression of consequences of product use that eventually lead to desired end benefit.  Thus, for example, a consumer may see that a car has a large engine, leading to fast acceleration, leading to a feeling of performance, leading to a feeling of power, which ultimately improves the consumer’s self-esteem.  A handgun may aim bullets with precision, which enables the user to kill an intruder, which means that the intruder will not be able to harm the consumer’s family, which achieves the desired end-state of security.  In advertising, it is important to portray the desired end-states.  Focusing on the large motor will do less good than portraying a successful person driving the car.

Information search and decision making.  Consumers engage in both internal and external information search.  Internal search involves the consumer identifying alternatives from his or her memory.  For certain low involvement products, it is very important that marketing programs achieve “top of mind” awareness.  For example, few people will search the Yellow Pages for fast food restaurants; thus, the consumer must be able to retrieve one’s restaurant from memory before it will be considered.  For high involvement products, consumers are more likely to use an external search.  Before buying a car, for example, the consumer may ask friends’ opinions, read reviews in Consumer Reports, consult several web sites, and visit several dealerships.  Thus, firms that make products that are selected predominantly through external search must invest in having information available to the consumer in need—e.g., through brochures, web sites, or news coverage.

Internal vs. External Search

A compensatory decision involves the consumer “trading off” good and bad attributes of a product.  For example, a car may have a low price and good gas mileage but slow acceleration.  If the price is sufficiently inexpensive and gas efficient, the consumer may then select it over a car with better acceleration that costs more and uses more gas.  Occasionally, a decision will involve a non-compensatory strategy.  For example, a parent may reject all soft drinks that contain artificial sweeteners.   Here, other good features such as taste and low calories cannot overcome this one “non-negotiable” attribute.

The amount of effort a consumer puts into searching depends on a number of factors such as the market (how many competitors are there, and how great are differences between brands expected to be?), product characteristics (how important is this product?  How complex is the product?  How obvious are indications of quality?), consumer characteristics (how interested is a consumer, generally, in analyzing product characteristics and making the best possible deal?), and situational characteristics (as previously discussed).

Two interesting issues in decisions are:

A number of factors involve consumer choices.  In some cases, consumers will be more motivated.  For example, one may be more careful choosing a gift for an in-law than when buying the same thing for one self.  Some consumers are also more motivated to comparison shop for the best prices, while others are more convenience oriented.  Personality impacts decisions.  Some like variety more than others, and some are more receptive to stimulation and excitement in trying new stores.  Perception influences decisions.  Some people, for example, can taste the difference between generic and name brand foods while many cannot.  Selective perception occurs when a person is paying attention only to information of interest.  For example, when looking for a new car, the consumer may pay more attention to car ads than when this is not in the horizon.  Some consumers are put off by perceived risk.  Thus, many marketers offer a money back guarantee.  Consumers will tend to change their behavior through learning—e.g., they will avoid restaurants they have found to be crowded and will settle on brands that best meet their tastes.  Consumers differ in the values they hold (e.g., some people are more committed to recycling than others who will not want to go through the hassle).  We will consider the issue of lifestyle under segmentation.

The Family Life Cycle. Individuals and families tend to go through a "life cycle:" The simple life cycle goes from

 

For purposes of this discussion, a "couple" may either be married or merely involve living together. The breakup of a non-marital relationship involving cohabitation is similarly considered equivalent to a divorce.

In real life, this situation is, of course, a bit more complicated. For example, many couples undergo divorce. Then we have one of the scenarios:

Single parenthood can result either from divorce or from the death of one parent. Divorce usually entails a significant change in the relative wealth of spouses. In some cases, the non-custodial parent (usually the father) will not pay the required child support, and even if he or she does, that still may not leave the custodial parent and children as well off as they were during the marriage. On the other hand, in some cases, some non-custodial parents will be called on to pay a large part of their income in child support. This is particularly a problem when the non-custodial parent remarries and has additional children in the second (or subsequent marriages). In any event, divorce often results in a large demand for:

Divorced parents frequently remarry, or become involved in other non-marital relationships; thus, we may see

       

Another variation involves

       

Here, the single parent who assumes responsibility for one or more children may not form a relationship with the other parent of the child.

Integrating all the possibilities discussed, we get the following depiction of the Family Life Cycle:

Generally, there are two main themes in the Family Life Cycle, subject to significant exceptions:

Note that although a single person may have a lower income than a married couple, the single may be able to buy more discretionary items.

Note that although a single person may have a lower income than a married couple, the single may be able to buy more discretionary items.
Family Decision Making: Individual members of families often serve different roles in decisions that ultimately draw on shared family resources. Some individuals are information gatherers/holders, who seek out information about products of relevance. These individuals often have a great deal of power because they may selectively pass on information that favors their chosen alternatives. Influencers do not ultimately have the power decide between alternatives, but they may make their wishes known by asking for specific products or causing embarrassing situations if their demands are not met. The decision maker(s) have the power to determine issues such as:

Note, however, that the role of the decision maker is separate from that of the purchaser. From the point of view of the marketer, this introduces some problems since the purchaser can be targeted by point-of-purchase (POP) marketing efforts that cannot be aimed at the decision maker. Also note that the distinction between the purchaser and decision maker may be somewhat blurred:

It should be noted that family decisions are often subject to a great deal of conflict. The reality is that few families are wealthy enough to avoid a strong tension between demands on the family’s resources. Conflicting pressures are especially likely in families with children and/or when only one spouse works outside the home. Note that many decisions inherently come down to values, and that there is frequently no "objective" way to arbitrate differences. One spouse may believe that it is important to save for the children’s future; the other may value spending now (on private schools and computer equipment) to help prepare the children for the future. Who is right? There is no clear answer here. The situation becomes even more complex when more parties—such as children or other relatives—are involved.
Some family members may resort to various strategies to get their way. One is bargaining—one member will give up something in return for someone else. For example, the wife says that her husband can take an expensive course in gourmet cooking if she can buy a new pickup truck. Alternatively, a child may promise to walk it every day if he or she can have a hippopotamus. Another strategy is reasoning—trying to get the other person(s) to accept one’s view through logical argumentation. Note that even when this is done with a sincere intent, its potential is limited by legitimate differences in values illustrated above. Also note that individuals may simply try to "wear down" the other party by endless talking in the guise of reasoning (this is a case of negative reinforcement as we will see subsequently). Various manipulative strategies may also be used. One is impression management, where one tries to make one’s side look good (e.g., argue that a new TV will help the children see educational TV when it is really mostly wanted to see sports programming, or argue that all "decent families make a contribution to the church"). Authority involves asserting one’s "right" to make a decision (as the "man of the house," the mother of the children, or the one who makes the most money). Emotion involves making an emotional display to get one’s way (e.g., a man cries if his wife will not let him buy a new rap album).


The Means-End Chain. Consumers often buy products not because of their attributes per se but rather because of the ultimate benefits that these attributes provide, in turn leading to the satisfaction of ultimate values. For example, a consumer may not be particularly interested in the chemistry of plastic roses, but might reason as follows:



The important thing in a means-end chain is to start with an attribute, a concrete characteristic of the product, and then logically progress to a series of consequences (which tend to become progressively more abstract) that end with a value being satisfied. Thus, each chain must start with an attribute and end with a value. An important implication of means-end chains is that it is usually most effective in advertising to focus on higher level items. For example, in the flower example above, an individual giving the flowers to the significant other might better be portrayed than the flowers alone.

Attitudes.  Consumer attitudes are a composite of a consumer’s (1) beliefs about, (2) feelings about, (3) and behavioral intentions toward some “object”—within the context of marketing, usually a brand, product category, or retail store.  These components are viewed together since they are highly interdependent and together represent forces that influence how the consumer will react to the object.

Beliefs.  The first component is beliefs.  A consumer may hold both positive beliefs toward an object (e.g., coffee tastes good) as well as negative beliefs (e.g., coffee is easily spilled and stains papers).  In addition, some beliefs may be neutral (coffee is black), and some may be differ in valance depending on the person or the situation (e.g., coffee is hot and stimulates--good on a cold morning, but not good on a hot summer evening when one wants to sleep).  Note also that the beliefs that consumers hold need not be accurate (e.g., that pork contains little fat), and some beliefs may, upon closer examination, be contradictory.

Affect.  Consumers also hold certain feelings toward brands or other objects.  Sometimes these feelings are based on the beliefs (e.g., a person feels nauseated when thinking about a hamburger because of the tremendous amount of fat it contains), but there may also be feelings which are relatively independent of beliefs.  For example, an extreme environmentalist may believe that cutting down trees is morally wrong, but may have positive affect toward Christmas trees because he or she unconsciously associates these trees with the experience that he or she had at Christmas as a child.

Behavioral intention.  The behavioral intention is what the consumer plans to do with respect to the object (e.g., buy or not buy the brand).  As with affect, this is sometimes a logical consequence of beliefs (or affect), but may sometimes reflect other circumstances--e.g., although a consumer does not really like a restaurant, he or she will go there because it is a hangout for his or her friends.

Changing attitudes is generally very difficult, particularly when consumers suspect that the marketer has a self-serving “agenda” in bringing about this change (e.g., to get the consumer to buy more or to switch brands).  Here are some possible methods:

One-sided vs. two-sided appeals.  Attitude research has shown that consumers often tend to react more favorably to advertisements which either (1) admit something negative about the sponsoring brand (e.g., the Volvo is a clumsy car, but very safe) or (2) admits something positive about a competing brand (e.g., a competing supermarket has slightly lower prices, but offers less service and selection).  Two-sided appeals must, contain overriding arguments why the sponsoring brand is ultimately superior—that is, in the above examples, the “but” part must be emphasized. 

Perception. Our perception is an approximation of reality.  Our brain attempts to make sense out of the stimuli to which we are exposed.  This works well, for example, when we “see” a friend three hundred feet away at his or her correct height; however, our perception is sometimes “off”—for example, certain shapes of ice cream containers look like they contain more than rectangular ones with the same volume.

Subliminal stimuli.  Back in the 1960s, it was reported that on selected evenings, movie goers in a theater had been exposed to isolated frames with the words “Drink Coca Cola” and “Eat Popcorn” imbedded into the movie.  These frames went by so fast that people did not consciously notice them, but it was reported that on nights with frames present, Coke and popcorn sales were significantly higher than on days they were left off.  This led Congress to ban the use of subliminal advertising.  First of all, there is a question as to whether this experiment ever took place or whether this information was simply made up.  Secondly, no one has been able to replicate these findings.  There is research to show that people will start to giggle with embarrassment when they are briefly exposed to “dirty” words in an experimental machine.  Here, again, the exposure is so brief that the subjects are not aware of the actual words they saw, but it is evident that something has been recognized by the embarrassment displayed.

Organizational buyers.  A large portion of the market for goods and services is attributable to organizational, as opposed to individual, buyers.  In general, organizational buyers, who make buying decisions for their companies for a living, tend to be somewhat more sophisticated than ordinary consumers.  However, these organizational buyers are also often more risk averse.  There is a risk in going with a new, possibly better (lower price or higher quality) supplier whose product is unproven and may turn out to be problematic.  Often the fear of running this risk is greater than the potential rewards for getting a better deal.  In the old days, it used to be said that “You can’t get fired for buying IBM.” This attitude is beginning to soften a bit today as firms face increasing pressures to cut costs.         

Organizational buyers come in several forms.  Resellers involve either wholesalers or retailers that buy from one organization and resell to some other entity.  For example, large grocery chains sometimes buy products directly from the manufacturer and resell them to end-consumers.  Wholesalers may sell to retailers who in turn sell to consumers.  Producers also buy products from sub-manufacturers to create a finished product.  For example, rather than manufacturing the parts themselves, computer manufacturers often buy hard drives, motherboards, cases, monitors, keyboards, and other components from manufacturers and put them together to create a finished product.  Governments buy a great deal of things.  For example, the military needs an incredible amount of supplies to feed and equip troops.  Finally, large institutions buy products in huge quantities.  For example, UCR probably buys thousands of reams of paper every month.

Organizational buying usually involves more people than individual buying.  Often, many people are involved in making decisions as to (a) whether to buy, (b) what to buy, (c) at what quantity, and (d) from whom.  An engineer may make a specification as to what is needed, which may be approved by a  manager, with the final purchase being made by a purchase specialist who spends all his or her time finding the best deal on the goods that the organization needs.  Often, such long purchase processes can cause long delays.  In the government, rules are often especially stringent—e.g., vendors of fruit cake have to meet fourteen pages of specifications put out by the General Services Administration.  In many cases, government buyers are also heavily bound to go with the lowest price.  Even if it is obvious that a higher priced vendor will offer a superior product, it may be difficult to accept that bid.