Chapter 03

Understanding
consumer decision-
making
Chapter outline
• The influence of the purchase situation on
buying decisions
• Buying ‘new-to-the-world’ products
• Buying behaviour and technology
Chapter outline
•The importance of understanding consumer
behaviour
•The consumer decision-making process
•Types of consumer buying decisions and
consumer involvement
•Individual factors influencing consumer
buying decisions
•Social factors influencing consumer buying
decisions.
Understanding consumer
behaviour (CB)
Consumer behaviour = how consumers
make purchase decisions and how they
use and dispose of the purchased goods
or services

Model of CB
• individual factors
• social factors
• purchase situation
Model of CB (Fig 3.1)
INDIVIDUAL
INDIVIDUALFACTORS
FACTORS SOCIAL
SOCIALFACTORS
FACTORS BUYING
BUYINGSITUATION
SITUATION
•Perception
•Perception •Culture
•Culture •Purchase
•Purchasereason
reason
•Motivation
•Motivation •Reference
•Referencegroups
groups •Purchase
•Purchasetime
time
•Learning
•Learning •Opinion
•Opinionleaders
leaders •Physical
•Physical
•Values,
•Values,beliefs,
beliefs, •Family
•Family surroundings
surroundings
attitudes
attitudes •Social
•Socialclass
class
•Personality,
•Personality,self-
self-
concept, lifestyle
concept, lifestyle

CONSUMER
CONSUMERDECISION-MAKING
DECISION-MAKINGPROCESS
PROCESS
(Fig
(Fig3.2)
3.2)
TO
TOBUY
BUY
OR
OR
NOT
NOTTOTOBUY
BUY
Consumer decision-making
process (Fig 3.2) Step 1:
Problem recognition
Step 2:
Individual
Individual Information search
and
and
social Step 3: Evaluation
social factors
factors of alternatives
and
and buying
buying
situation
situation Step 4:
Purchase
Step 5: Post-
purchase behaviour
Consumer decision-making
process Step 1:
Problem recognition
• consumer realises he/she
Individual
Individual has an unfulfilled need/want
and
and • discrepancy between actual
social
social factors
factors state and desired state
and
and buying
buying
situation • occurs when:
situation
‒ experience problems with
current product
‒ see newer/superior
product.
 Consumer decision-making
process Step 2:
Information search

Individual
Individual Internal search
and
and •memory / experience
social
social factors
factors
and External search
and buying
buying
situation
situation •non marketing-controlled
•marketing-controlled
Consumer decision-making
process

Extent of external search

depends on:
• perceived risk
• knowledge
• prior experience
• level of interest.
Consumer decision-making
process
Step 3: Evaluation
of alternatives

Individual
Individual
and
and Evoked set
social
social factors
factors • product attributes
and
and buying
buying • cut-offs or min/max
situation
situation levels
• rank order
Consumer decision-making
process
Step 4: Purchase

Individual
Individual • buy now
and
and • buy later
social
social factors
factors • don’t buy at all
and
and buying
buying
situation
situation
Consumer decision-making
process
Step 5: Post-purchase
behaviour

Individual Cognitive dissonance =

Individual inconsistency between
and
and
social values/opinions and
social factors
factors behaviour that lead to an
and
and buying
buying
situation inner tension or anxiety
situation
Types of consumer buying decisions
and consumer involvement
Routine Limited Extensive
response decision- decision-
behaviour making making

Low High
involvement involvement
• Level of involvement
• Time to make decision
• Cost of product/service
• Degree of information search
• Number of alternatives considered
Factors determining the level of
consumer involvement
Consumer involvement = the amount of
time and effort a buyer invests in the
search, evaluation, and decision
processes of CB
• Previous experience
• Interest
• Perceived risk of negative
consequences
• Situation
• Social visibility
Perceived risk of negative
consequences: social risk
Individual factors influencing
consumer buying decisions

Perception
Motivation
Learning
Values, beliefs, attitudes
Personality, self-concept, lifestyle
Individual factor: Perception

Perception = process by which we

select, organise, and interpret stimuli
into a meaningful and coherent picture

• Selective exposure
• Selective distortion
• Selective retention
• Just-noticeable difference
Individual factor: Motivation
Fig 3.3: Maslow’s hierarchy of needs
Physiological
need
Safety need
Social need
Esteem
need
Self-actualisation need
Individual factor: Learning
Learning = the process that creates
changes in behaviour through
experience and practice

Types of learning

Experiential Conceptual
learning learning
Individual factor: Learning
Related learning concepts

Reinforcement

Repetition

Stimulus generalisation

Stimulus discrimination

Product differentiation
Stimulus generalisation
Stimulus discrimination

various
products by
the
Coca-Cola
company,
sold under
different brand
names
Individual factors: Values,
beliefs, attitudes
Value = an enduring belief that a specific
mode of conduct is personally or socially
preferable to another mode of conduct
Belief = an organised pattern of
knowledge that an individual holds as
true about his or her world
Attitude = a learned tendency to respond
consistently toward a given object
Individual factors:
Values, beliefs, attitudes

Changing beliefs about attributes

Changing importance of beliefs

Adding new beliefs

Individual factors: Personality,
self-concept, lifestyle
Personality = a way of organising and
grouping the consistencies of an
individual’s reactions to situations
Self-concept = how consumers perceive
themselves (ideal versus real self-image)
Lifestyle = a mode of living as identified
by a person’s activities, interests and
opinions
Lifestyle
Social factors influencing
consumer buying decisions
Social factor: Culture
Culture = the set of values, norms and
attitudes that shape behaviour, as well
as the products of that behaviour as
they are transmitted from one
generation to the next

• Culture is dynamic
• Cultural values in SA
Social factor: Subculture

Subculture = a homogenous group of

people who share elements of the
overall culture as well as cultural
elements unique to their own group

• Subcultures in SA
Social factor: Reference group
Reference group = all the formal and
informal groups that influence the
buying behaviour of an individual
Bases of social power

Information Legitimate Referent Expert

power power power power
Social factor: Reference groups
Primary
Small, informal group
Direct
Face to face
Secondary
Large, formal group
Types of
reference
groups
Aspirational
Desired to be a member
Indirect
Non-aspirational
Avoids membership
Social factor: Opinion leaders

Opinion leaders:
• important target market
• influence others
• often first to try new products
• are typically activists
• tend to be self-indulgent.
Opinion
leader
– Kimi
Räikkönen
Social factor: Family and family
life cycle
Decision-making roles in the family
Initiator
Initiator

Influencer
Influencer
Decision-maker
Decision-maker

Purchaser
Purchaser

User
User
Social factor: Family and family
life cycle

Family life-cycle = a series of stages

through which consumers’ attitudes
and behavioural tendencies evolve,
through maturity, experience and
changing income and status
Social factor: Social class
Social class = a group of people who
are considered nearly equal in status or
community esteem, who regularly
socialise among themselves both
formally and informally and who share
behavioural norms
• Upper class
• Middle class
• Working class
• Lower class
Purchase situation’s influence on
consumer buying decisions

Purchase reason affects buying

Time affects buying
Physical surroundings affect
buying
Buying new products
Six steps in adoption process

Awareness
Interest
Evaluation
Trial
Decision
Confirmation