Consumer buyer behaviour refers to the buying behaviour of final consumers – individuals and households who buy goods and services for personal consumption. All of these final consumers combine to make up the consumer market. The EU consumer market consists of more than 500 million people who consume many trillions of euros’ worth of goods and services each year, making it one of the most attractive consumer markets in the world. The world consumer market consists of more than 7.1 billion people.1
Consumers around the world vary tremendously in age, income, education level and tastes. They also buy an incredible variety of goods and services. The ways in which these diverse consumers connect with each other and with other elements of the world around them influence their choices among various products, services and companies. Here we examine the fascinating array of factors that affect consumer behaviour.
Model of consumer behaviour
Consumers make many buying decisions every day. Most large companies research con- sumer buying decisions in great detail to answer questions about what consumers buy, where they buy, how and how much they buy, when they buy and why they buy. Marketers can study actual consumer purchases to find out what they buy, where and how much. But learning about the whys of consumer buying behaviour is not so easy – the answers are often locked deep within the consumer’s head.
Penetrating the interior of the consumer’s mind is no easy task. Often, consumers them- selves do not know exactly what influences their purchases. ‘Ninety-five per cent of the thought, emotion, and learning [that drive our purchases] occur in the unconscious mind – that is, without our awareness,’ notes one consumer behaviour expert.2
The central question for marketers is: how do consumers respond to various marketing efforts the company might use? The starting point is the stimulus–response model of buyer behaviour shown in Figure 5.1. This figure shows that marketing and other stimuli enter the consumer’s ‘black box’ and produce certain responses. Marketers must work out what is in the buyer’s black box.
At the most basic level marketing stimuli consist of the ‘marketing mix’: product, price, place and promotion for goods, with the addition of people, physical evidence and process the A380 is the best aircraft to buy to serve their cus-
tomers? Will freight operators be persuaded that it is the best product to meet the demands of their business and private customers? And, perhaps most important, will air passengers decide that they want to fly with operators who use the A380, because it makes their journeys that little bit more pleasant?
Sources: Doris Burke, ‘Anatomy of an A380’, Fortune, 5 March 2007, 155(4), pp. 101–8;
Nelson D. Schwartz, ‘Big Plane, Big Problems’, Fortune, 5 March 2007, 155(4), pp. 95–8; Airbus Corporation website, http://www.airbus.com/en/corporate/ethics/
mission_values/; ‘Airbus’ New Flight Plan’, Wall Street Journal, 9 March 2007; Rod Stone, ‘Airbus Parent EADS Appoints Rudiger Grube as Co-Chairman’, Wall Street Journal, 5 April 2007; Andrew Lee, ‘The A380 is a Gamble Worth Taking’, The Engi- neer, 10 February 2005; ‘Airbus A380 Completes Test Flight’, BBC News, 27 April 2005; Robert Wall, ‘Schedule UPSet’, Aviation Week & Space Technology, 5 March 2007, 166(10); ‘The Airbus 380’, Airliners.net, 9 April 2007, http://www.airliners.
net/info/stats.main?id=29; Noelle Knox, ‘A380 Makes Massive Debut’, USA Today, 19 January 2005; ‘Airbus A380: A Whale of a Plane!’, BBC News, 10 May 2005;
Carol Matlock, ‘Aloft on Airbus’ Giant New A380’, BusinessWeek Online, 8 February 2007; Greg Lindsay, ‘Airbust? A380 Hits Marketing Turbulence’, Advertising Age, 2 April 2007, 78(14); Marc Graser, ‘The Nonproduct Placement that Boosts Airbus’, Advertising Age, 9 May 2005; Barbara Peterson, ‘Airbus A380: Taking the Largest Passenger Jet for a Test Drive’, Popular Mechanics, 22 March 2007, http://www .popularmechanics.com/bolgs/science_news/4213543.html.
FIGURE 5.2
Factors influencing consumer behaviour FIGURE 5.1
Model of buyer behaviour
for service products. Other stimuli include major forces and events in the buyer’s environ- ment: economic, technological, political and cultural. All these inputs enter the buyer’s mind where they are turned into a set of observable buyer responses: product choice, brand choice, dealer choice, purchase timing and purchase amount.
The marketer wants to understand how the stimuli are changed into responses inside the consumer’s mind. There are two components: first, the buyer’s characteristics influence how he or she perceives and reacts to the stimuli; second, the buyer’s decision process itself affects the buyer’s behaviour. We look first at buyer characteristics as they affect buying behaviour and then discuss the buyer decision process.
Characteristics affecting consumer behaviour
Consumer purchases are influenced strongly by cultural, social, personal and psychological characteristics, as shown in Figure 5.2. For the most part, marketers cannot control such factors, but they must take them into account.
Cultural factors
Cultural factors exert a broad and deep influence on consumer behaviour. The marketer needs to understand the role played by the buyer’s culture, subculture and social class.
Culture
Culture is the most basic cause of a person’s wants and behaviour. Human behaviour is largely learned. Growing up in a society, a child learns basic values, perceptions, wants and behaviours from the family and other important institutions. For example, the former
Prime Minister of the UK, Tony Blair, identified a number of core British values: creativ- ity, tolerance, openness, adaptability, work and self-improvement, strong communities and families, fair play, rights and responsibilities, and an outward-looking approach to the world (no sniggering at the back!). Every group or society has a culture, and cultural influences on buying behaviour may vary greatly from country to country. Failure to adjust to these differences can result in ineffective marketing or embarrassing mistakes.
Marketers are always trying to spot cultural shifts in order to discover new products that might be wanted. For example, the cultural shift towards greater concern about health and fitness has created a huge industry for health and fitness services, exercise equipment and clothing, more natural foods and a variety of diets. The shift towards informality has resulted in more demand for casual clothing and simpler home furnishings.
Subculture
Each culture contains smaller subcultures, or groups of people with shared value systems based on common life experiences and situations. Subcultures include nationalities, reli- gions, racial groups and geographic regions. Many subcultures make up important market segments, and marketers often design products and marketing programmes tailored to their needs. Ethnic minorities are an example of subculture groups. It is estimated that there are 5.5 million ethnic minority consumers in the UK, and the value of the ethnic minor- ity market as a whole is estimated to be £12bn a year.3 The UK has seen several waves of immigration during the last 60 years, including migrants from the Republic of Ireland, the Caribbean, the Indian subcontinent, Africa, Cyprus and Hong Kong. A new wave of immigration from Eastern Europe followed the expansion in 2004 and 2007. Several ethnic minority groups tend to have more children than the white indigenous population, making them an important target market for baby products companies and for any company that is targeting younger consumers. The ethnic minority market in the UK has a younger age structure than the indigenous population. For example, the 2011 Census showed that while 18 per cent of the White British population was aged over 65, this proportion was much smaller for members of ethnic minority groups, at 6 per cent of the Chinese ethnic group, and only 2 per cent of the Black African group.
In geographical terms, ethnic minority groups in the UK are heavily concentrated in the major cities of England, and nearly half live in Greater London. The high geographical concentration makes it easier to devise targeted marketing strategies for ethnic minority groups. However, while there are specialist ethnic minority media (such as radio stations, TV stations and newspapers) in the UK, they are nowhere near as well developed as in the USA.
The consumer buying behaviour of ethnic minority groups in the UK is influenced by many factors, among which income levels, religion and family structure can be considered particularly important. The British Chinese community has the highest average income level among ethnic minority groups, followed by African–Asians and by Indians. While these groups have relatively high average incomes, other ethnic groups such as the Pakistani and Bangladeshi communities have comparatively low average incomes. For many members of ethnic minority groups their religion is very important. The great majority of British Paki- stanis and British Bangladeshis are Muslim, most white and Afro-Caribbean British people are Christian, while among the British Indian community several religions are represented, including Islam, Christianity, Hinduism and Sikhism. Religion can play an important role in consumer decisions. For example, Muslims are forbidden to eat certain foods or to consume alcohol, and may require specifically designed financial services products that do not involve the payment of interest (many Islamic scholars consider that interest is haram, meaning for- bidden). Finally, family structures vary considerably between ethnic groups. Since they often have more children, ethnic minority groups tend to have larger families than the indigenous white community. Additionally, among some Asian subcultures the traditional extended family, where multiple generations live together under the same roof, still exists, although this structure seems to be in decline among British Asians.
Having identified a gap in the market for financial services aimed at the large Muslim minority in the UK, Lloyds Bank launched a range of sharia (Islamic law) approved financial services, including an Islamic current account and a sharia-approved home finance service (search Lloyds Islamic Account). Muslims signing up to any of these products could rest assured that their money would always be handled in accordance with sharia. The money that account holders placed with the bank would not be used for any interest-based busi- ness activities. In order to reassure Muslim customers of the integrity of the service, Lloyds recruited a committee of religious and legal advisers of the Islamic faith.
The worldwide population of people aged over 60 is growing faster than any other age group, and is expected to double to around 1.2 billion by 2025. Although other countries are also ageing, European countries are ageing faster than those of any other continent.
By 2050 it is estimated that 35 per cent of Europe’s population will be aged over 60. In the longer term the ageing population represents a considerable public policy challenge, since there will be fewer workers and more retired people. Major efforts by both governments and private firms are going into the promotion of pension plans to persuade younger people that they need to start saving early for retirement. For the moment, however, mature consumers are better off financially than are younger consumer groups. Because mature consumers have more time and money, they are an ideal market for exotic travel, restaurants, high-tech home entertainment products, leisure goods and services, designer furniture and fashions, financial services and healthcare services.4
Their desire to look as young as they feel also makes more mature consumers good can- didates for cosmetics and personal-care products, health foods, fitness products and other items that combat the effects of ageing. The best strategy is to appeal to their active, multi- dimensional lives. For example, Kellogg’s aired a TV spot for All-Bran cereal in which indi- viduals ranging in age from 53 to 81 are featured playing ice hockey, water skiing, jumping hurdles and playing baseball, all to the tune of ‘Wild Thing’. Meanwhile, Nintendo has been targeting older individuals who want to keep their minds sharp with its Dr. Kawashima’s Brain Training software for the Nintendo DS.5
Lloyds is offering services designed to meet the specific needs of people of the Islamic faith
Source: http://www.lloydsbank .com/current-accounts/
islamic-account.asp
Social class
Almost every society has some form of social class structure. Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests and behaviours. Social scientists have identified the 10 European social classes shown in Table 5.1.
Social class is not determined by a single factor, such as income, but is measured as a combination of occupation, income, education, wealth and other variables. In some social systems, members of different classes are reared for certain roles and cannot change their social positions. In Europe, however, the lines between social classes are not fixed and rigid;
people can move to a higher social class or drop into a lower one. Marketers are interested in social class because people within a given social class tend to exhibit similar buying behav- iour. Social classes show distinct product and brand preferences in areas such as clothing, home furnishings, leisure activity and cars.
Social factors
A consumer’s behaviour is also influenced by social factors, such as the consumer’s small groups, family and social roles and status.
Groups
A person’s behaviour is influenced by many small groups. Groups that have a direct influence and to which a person belongs are called membership groups. In contrast, reference groups serve as direct (face-to-face) or indirect points of comparison or reference in forming a per- son’s attitudes or behaviour. People are often influenced by reference groups to which they do not belong. For example, an aspirational group is one to which the individual wishes to belong, as when a young boy hopes someday to emulate Cristiano Ronaldo and play football for Portugal and for great club sides like Real Madrid and Manchester United.
Marketers try to identify the reference groups of their target markets. Reference groups expose a person to new behaviours and lifestyles, influence the person’s attitudes and
ESeC class Common term Employment regulation
1 Large employers, higher grade professional, administrative and managerial occupations
Higher salariat Service relationship 2 Lower grade professional, administrative and
managerial occupations and higher grade technician and supervisory occupations
Lower salariat Service relationship (modified)
3 Intermediate occupations Higher grade white-collar workers
Mixed 4 Small employer and self-employed occupations
(excl. agriculture etc.)
Petit bourgeoisie or independents
– 5 Self-employed occupations (agriculture etc.) Petit bourgeoisie or
independents
– 6 Lower supervisory and lower technician
occupations
Higher grade blue-collar workers Mixed
7 Lower services, sales and clerical occupations Lower grade white-collar workers Labour contract (modified) 8 Lower technical occupations Skilled workers Labour contract (modified) 9 Routine occupations Semi- and non-skilled workers Labour contract
10 Never worked and long-term unemployed Unemployed –
Source: https://www.iser.essex.ac.uk/archives/esec/user-guide/the-european-socio-economic-classification.
TABLE 5.1 The European socio-economic classification
self-concept, and create pressures to conform that may affect the person’s product and brand choices. The importance of group influence varies across products and brands. It tends to be strongest when the product is visible to others whom the buyer respects.
Manufacturers of products and brands subjected to strong group influence must fig- ure out how to reach opinion leaders – people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert influence on others.
Some experts call this 10 per cent of Europeans the influentials or leading adopters. These consumers ‘drive trends, influence mass opinion and, most importantly, sell a great many products,’ says one expert. They often use their big circle of acquaintances to ‘spread their knowledge on what’s good and what’s bad’.6
Many marketers try to identify opinion leaders for their products and direct marketing efforts towards them. They use buzz marketing by enlisting or even creating opinion lead- ers to spread the word about their brands. Sneeze, a London marketing agency, uses buzz marketing to create successful word-of-mouth campaigns for its clients.
Two or three years ago, a Premiership football club (I’m not allowed to tell you which one) was trying to sign up fans to its text bulletin service. For 25p a message (working out at around £100 a year), fans would get a text whenever something interesting happened at the club – team selections, injury updates, half-time scores, that sort of thing.
Despite promoting the service in club literature, on its website, and with armies of attrac- tive girls handing out leaflets on match days, the club could not get the rate of new subscrip- tions to rise above a disappointing 20 a week. So it hired a small marketing agency called Sneeze.
‘We got a group of 14 or 16 actors, who were all football fans, but pretended to be fans [of the unnamed club],’ explains Graham Goodkind, Sneeze’s founder and chairman. ‘And they went round bars and clubs around the ground, in groups of two, saying that one of their mates had been sacked from work because he kept on getting these text messages and talking to everyone about it, and his boss had had enough and given him the boot.
So they were going round with this petition trying to get his job back – kind of a vaguely plausible story.
‘And then the actors would pull out of their pocket some crumpled-up leaflet, which was for the text subscription service. They’d have a mobile phone in their pocket, and they’d show them how it worked. “What’s the harm in that?” they’d say. And they could have these conversations with lots of people – that was the beauty of it. Two people could spend maybe 20 minutes or half an hour in each pub, working the whole pub. We did it at two home games and reckon we got about 4,000 people on the petition in total.’
The petition went in the bin, of course, but subscriptions to the club’s texting service soared. ‘The week after we had done the activity it went up to 120 sign-ups,’ says Goodkind, who is also boss of the Frank PR agency. ‘Then you saw that after that it was 125, and the next week was 75, and the next week was 60. That was the talkability, because obviously if you get that service you tell your mates about it. We saw a massive effectiveness.’7
Family
Family members can strongly influence buyer behaviour. The family is the most important consumer buying organisation in society, and it has been researched extensively. Marketers are interested in the roles and influence of the husband, wife and children on the purchase of different products and services.
Husband–wife involvement varies widely by product category and by stage in the buy- ing process. Buying roles change with evolving consumer lifestyles. For example, in many countries, the wife has traditionally been the main purchasing agent for the family in the areas of food, household products and clothing. But with a growing proportion of women holding jobs outside the home and the willingness of husbands to do more of the family’s purchasing, all this is changing. The traditional division of labour between men and women in the family, with men earning the money and women running the home, is already a distant