U U N IT

1
Introduction to Consumer
Behaviour

Unit Overview

Welcome to our journey into Consumer Behaviour! This course will help managers to
figure out the buying behaviour of consumers with a view to developing more relevant
marketing and other strategies. At the heart of this study is the desire to facilitate more
cost-effective decision making and reduce the potential for business failure, creating
in the process, more sustainable organisations, satisfied customers and stakeholders
and stable national and regional economies.

This is the introductory unit of the course and as such, it lays an excellent foundation
for our study of consumer behaviour, in particular, our appreciation of its role within
marketing and other organisations; how customers and stakeholders make decisions;
and the implications of this decision making for marketing and organisational strategy.

The unit begins with a definition of consumer behaviour and clarification of the key
terms within its meaning. Next, it delves into the core concepts that revolve around
the study of consumer behaviour and the interfaces with the social science disciplines
from which it borrows quite heavily. The Unit will conclude with the types of decisions
made by consumers and the decision processes used to arrive at these decisions

Learning Objectives

By the end of this unit, you will be able to:

1. Define consumer behaviour and its core concepts;

2. Assess the role of consumer behaviour in marketing strategy, specifically, and

the business of organisations, generally;

3. Deconstruct the relationship between consumer behaviour and psychology,

sociology, economics and applied research;

© 2016 University of the West Indies Open Campus  1

 4. Describe the buying decision process

5. Classify the types of buying decisions that are made by consumers.

This unit comprises three sessions as follows:

Session 1.1: Definition of Consumer Behaviour and its Core Concepts

Session 1.2: Consumer Behaviour and its Contexts

Session 1.3: Consumer Decision-making

Readings and Resources

Note to Student:

Some hyperlinks to resources may not open on clicking. If any link fails to open,
please copy and paste the link to your browser to view/download the resource.

Required Reading(s)

Fournier, S. (1998). Consumers and Their Brands: Developing Relationship

Theory in Consumer Research. Journal of Consumer Research, 24(4), 343-353.
[Available at UWIlinC]

Perner, L (2010). Consumer Behaviour, The Psychology of Marketing. Retrieved

from [Link]

Suggested Resources [or Other Resources]

Tanner, J & Raymond, M. (2015), Consumer Behaviour, How People Make Buying
Decisions, Principles of Marketing, Cp. 3. Retrieved from
[Link]

You are also advised to locate and read: Additional papers relevant to the topics
covered.

2  MKTG3070 Consumer Behaviour – UNIT 1

SSession 1.1

Definition of Consumer Behaviour and

its Core Concepts

Introduction
Definition of key terms and understanding of core concepts are especially important as
we begin our exploration of the fundamentals of consumer behaviour. In this session
you will be introduced to a definition of consumer behaviour and explanations of
the key elements of the definition. We shall also discover and discuss some of the
core concepts you can expect to encounter as you move throughout this course. This
definition and concept review will therefore lay a strong foundation on which you can
build in future units.

Definition of Consumer Behaviour

Consumer behaviour is the study of individuals, groups, or organizations and the
processes used to select, secure, use, and dispose of products, services, experiences,
or ideas to satisfy needs and the impacts that these processes have on the consumer
and society.

Our definition is very useful because it includes many important aspects that are
worth noting:

Individuals, groups or organisations: Consumers are individuals and households that

purchase goods and services for their personal consumption and not for resale, rental
or production of other goods and services. Organisations and groups that purchase
goods and services use them within the context of delivering other goods or services
and as such, are considered under another category of consumer behaviour called
Business or Organisational Buying or Business to Business (B2B).

Processes: the processes or ways used by consumers to make purchasing decisions are
important indicators for planners when developing strategies.

Select, secure, use and dispose: there is a tendency to view consumer behaviour as related
only to the acquisition of goods and services but consumer behaviour goes way beyond
this, covering processes related to securing, utilising and disposition as well.

MKTG3070 Consumer Behaviour – UNIT 1  3

 Products, services, experiences or ideas: the study of consumer behaviour extends beyond
goods and services to ideas and experiences, in fact, anything that satisfies a need or
a want.

Impact of processes on the consumer and society: the study of consumer behaviour also
extends to impact, not only on the behaviour of the individual consumer, as is expected,
but on the society as a whole. It is possible that the use of a particular product,
service or experience may be positive for an individual consumer but negative for his
community. This is important for decision makers when developing products whose
use or disposal may negatively impact the wider environment, although it may delight
their customers.

Why the Study of Consumer Behaviour is Important

Given the wide scope and nature of consumer behavior it may well become obvious
how important its study may be for marketers and other decision makers. Marketers
will find the study of consumer behavior useful because it helps to identify the needs
of customers, which in turn will assist in defining and refining product and service
offerings; making decisions on pricing and promotional strategies and placing outlets
in strategic locations. Further, it may allow marketers to bring new products to market
and produce more competitive products that would gain market share and produce
positive financial and positioning results for the company.

Public sector and non-profit organisations equally benefit from the study of consumer
behavior. The use of social research and stakeholder consultations make the provision
of state-funded or special-interest services more acceptable by establishing broad areas
of consensus on key issues and serving the public and special interests by facilitating
the best use of funding for these purposes.

Core Concepts of Consumer Behaviour

The core concepts related to consumer behaviour, derived from the study of marketing,
are as follows:

Black Box Model:

The black box model shows the interaction of stimuli, consumer characteristics, decision
process and consumer responses. It can be distinguished between interpersonal stimuli
(between people) or intrapersonal stimuli (within people).

Buying behaviour:

This term is often used as an alternative to consumer behaviour, but also is used when
the purchaser is not the ultimate consumer but rather an industrial buyer, a buying
centre, or other middleman between the seller and the ultimate user.

4  MKTG3070 Consumer Behaviour – UNIT 1

Buying decision process: (also called buyer decision process).

A buying decision process is the process a customer goes through when buying a
product. More specifically, it refers to the method or procedure used by consumers
regarding purchasing transactions before, during, and after the purchase of a good or
service.

Demand:

Need or want, backed by buying power; consumer’s desire and ability to pay a specific
price.

Need:

A state of felt deprivation. It is usually used in the context of something being essential
or important, as opposed to be just desirable to the consumer.

Product:

Anything that a buyer offers to a seller that satisfies a need or want. It may be tangible,
in the case of a physical object (good) or intangible (service, idea, experience). In usage
the term ‘product’ often is used as the tangible as opposed to ‘good’. It is there quite
customary to see goods and services or products and services. These are often used
interchangeably.

Service:

A special type of product that is essentially intangible and does not result in ownership
of anything.

Value:

Also known as perceived value, as determined by the purchaser or user of a product,

service, idea or experience. It refers to the benefits received by the customer from
purchasing or using the product or service in relation to the cost of acquiring or using
it.

Want:

A desire for something.

ACTIVITY 1.1
Applying the Definition
Based on the definition provided above, what consumer behaviour-
related activities have you engaged in lately?
Post your responses on the discussion forum.

MKTG3070 Consumer Behaviour – UNIT 1  5

 Session 1.1 Summary

In this session you were introduced to our working definition of consumer behaviour
and why it is useful for our study of the subject. We also studied why consumer
behaviour is important for all types of organisations and how it could benefit marketers
and other decision makers. The core concepts associated with consumer behaviour:
buying behaviour, needs, wants, demand, product, service, value, buying decision
process and black box model were presented. Together, these topics constitute your
initial step into the study of consumer behaviour. In the next session we will consider
the disciplines linked to consumer behaviour in order to explain the buying behaviour
of individuals.

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SSession 1.2

Consumer Behaviour and its Contexts

Introduction
In the last session we laid the foundation for your understanding of consumer
behaviour by considering definitions and key concepts. In this session, we will consider
the relationship between consumer behaviour and other disciplines, in an effort to
explain the theoretical moorings of the subject. Most theorists on consumer behaviour
will readily admit that the human mind is such that it is virtually impossible to say for
sure why, specifically, someone makes one decision over another. As such consumer
behaviour borrows from a number of disciplines to assist with its explanations of
consumer behaviour.

Consumer behaviour, because it deals with customers, is normally embedded within

the marketing function of organisations. However, it adopts theories from psychology
(individual behaviour), sociology (group behaviour), economics (macro environmental
influences) and research (applied social sciences) to get the best view of the subject
matter and so assist managers with their strategic and operational decision making.

Consumer Behaviour and Marketing

Marketing is the management process responsible for anticipating, identifying and
satisfying consumer requirements, profitably (The Chartered Institute of Marketing,
2016). The study of consumer behaviour is at the very heart of marketing because it
helps the marketer anticipate the needs of customers; identify what these needs are
and design products, services, ideas and experiences that match and exceed customer
expectations. If the marketer delights the customer, he will have him for life but if he
fails to impress or deliver an adequate level of service, he will lose the customer to
more able competitors. The impact on profitability and long-term sustainability would
be apparent if the organisation satisfies or does not satisfy customer requirements.

Consumer Behaviour and Psychology

The American Psychology Association defines psychology as ‘the study of the mind
and behaviour’ (About APA, 2016). Consumer behaviour therefore has many links to
psychology, as it is focused on the behaviour of consumers. This encompasses many

MKTG3070 Consumer Behaviour – UNIT 1  7

 aspects including the internal psychological factors that influence decision making,
especially, attitudes, beliefs, perception and learning.

Consumer psychology, a branch of psychology, is the study of why people buy things.
Psychologists try to find the underlying cognitive processes that explain consumers’
choices and how they respond to the influence of marketing, as well as the external
stimuli that convince people to purchase certain items. Look at the following video
which provides definition and examples of consumer psychology.

Play Video
Wrexham Glyndwr University. (2013, February 1). What is Consumer
Psychology? Retrieved from:

uu [Link]

Consumer Behaviour and Sociology

Sociology is the study of social behaviour or society, including its origins, development,
organization, networks, and institutions. It is a social science that uses various methods
of empirical investigation and critical analysis to develop a body of knowledge about
social order, disorder, and change (Wikipedia, 2016). When aggregated, sociologists
view consumer behaviour as consumption behaviour. The aspects of sociology that
interface with consumer behavior include the study of norms, values, culture, social
class, demographics and reference groups. These are all felt to influence the buying
behavior of individuals and households. The Black-box Model (see Session 1.1: Core
Concepts of Consumer Behaviour), is used extensively as a model to explain consumer
behavior, was borrowed from Sociology’s Black Box Theory of Behaviourism, based
on interaction of social factors (Molm, 1981).

Consumer Behaviour and Economics

Economics is a social science concerned with the factors that determine the production,
distribution, and consumption of goods and services. Consumer behaviour is one of
the most prominent fields of research, development, and application of economic
decision theories. These are decisions about the use of scarce resources, such as money,
time or effort. Consumer behaviour and economic decisions include the accuracy of
consumer perception of prices and price increases; the perception and acceptance of
foreign products; imagery processes and spending; emotions and purchase decisions;
financial satisfaction and saving behaviour; and financial management in the private
household (Kirchler & Hoelzl, 2011). The following video summarises the different
interfaces between economics and consumer behavior.

8  MKTG3070 Consumer Behaviour – UNIT 1

 Play Video
ACDCLeadership. (2016, January 14). Micro Unit 2 Summary- Supply,
Demand, and Consumer Choice. Retrieved from:

uu [Link]

Consumer Behaviour and Applied Research

Applied research is a form of systematic inquiry involving the practical application of
science. It accesses and uses some part of the research communities’ (the academia’s)
accumulated theories, knowledge, methods, and techniques, for a specific, often state-,
business-, or client-driven purpose. Applied research is contrasted with pure research
(basic research) in discussion about research ideals, methodologies, programs, and
projects. Applied research deals with solving practical problems and generally
employs empirical methodologies.

MKTG3070 Consumer Behaviour – UNIT 1  9

 ACTIVITY1.2
Reflective Practice (1 HOUR)

1. Think about a place that you visit frequently. It may be an event, a

restaurant, a club, a store or anywhere you visit because you want to go
and not because you are required to attend. Then complete the following
sentences:

a) I like visiting ________(name of establishment) because……..

b) Going there makes me feel…………….

c) The management must continue…………

2. Now think about a place that you dislike visiting. It may be an event,
a restaurant, a club, a store or anywhere you go because you are
required to go and not because you particularly enjoy visiting there. Then
complete the following sentences:

a) I dislike visiting ________(name of establishment/event)

because……..

b) Going there makes me feel…………….

c) The management must change …………

3. From the items (1 and 2) above, what can you discern about your
personal behaviour as a consumer?

4. How could the management of the two organisations you cited benefit
from your insights?

Session 1.2 Summary

In this session, we dug deeper into the introductory aspects of consumer behaviour.
We focused on theoretical contributions of various disciplines to the understanding
of consumer behaviour. These disciplines include marketing, psychology, sociology,
economic and applied research. The value of these connections would become more
apparent as we progress through the course. In our next session we will round off this
introductory unit by considering the buying process of consumers, that is, the process
used and the types or categories of decisions that buyers would normally have to
make.

10  MKTG3070 Consumer Behaviour – UNIT 1

SSession 1.3

Consumer Decision Making

Introduction
In our last session we reviewed consumer behaviour’s related disciplines and discussed
their interfaces. In this session we conclude our introductory unit by considering
consumer decision making as the basis for demonstrating consumer behaviour. The
session will explore the theoretical foundations of consumer decision making processes
and the types of decisions that consumers make on a regular basis.

Buying Decision Process (Buyer Decision Process)

Buying decisions of consumers

Generally speaking, consumers make numerous buying decisions on a daily basis. A
buying decision is defined as the different buying situations a buyer would face in the
course of purchasing a product or service to satisfy a need.

Three buying decisions can be distinguished:

1. product decision, deciding on which product(s) will be purchased with available

resources;

2. brand decision, deciding on which brand(s) will be purchased among competing

brands of the same product; and

3. supplier decision, deciding on which supplier(s) will be patronized among

competing suppliers (American Marketing Association, 2016).

To learn more about the buying decision process, view the video linked below.

MKTG3070 Consumer Behaviour – UNIT 1  11

 Play Video
Grey, J. (2015, June 13). Consumer Buying Decision Process.
Retrieved from:

uu [Link]

The buying decision process

The Buying decision process refers to the process that a customer goes through when
buying a product. More specifically, it refers to the method or procedure they use
before, during, and after purchase of the good or service. In 1968, Engel, Blackwell
and Kollat (Engel, 1968), proposed a 5-step framework for identifying the decision
process of consumers as presented in Figure 1.1. In it, they identified five (5) stages
that a customer goes through when making a purchase decision.

Stage 1:

Problem recognition – the consumer recognises that he is in need of something. Need

recognition is the first and most important of all the stages because it is the initiation
of all the other actions. If needs are not activated, no purchase will be necessary.

e.g. It is a hot day and the consumer may become thirsty.

Stage 2:

Search for alternatives

e.g. He considers the alternative options, that is, tea, coffee, water, juice, beer, wine,
spirits

Stage 3:

Evaluation of alternatives – he weighs his options, based on a number of factors, some

of which may be situational.

e.g. He is at work and alcoholic beverages are not allowed, which will eliminate beer,
wine and spirits.

Stage 4:

Purchase decision

e.g. He decides to go for water and makes the purchase.

Stage 5:

Post-purchase evaluation

12  MKTG3070 Consumer Behaviour – UNIT 1

 e.g. Once the purchase is made he may debate whether choosing water over juice was
the better option. If his thirst is quenched, he will be satisfied with his decision; if not,
he may become dissatisfied and experience post-purchase dissonance, perhaps even
regret buying the water.

Post-
purchase
Purchase evaluation
decision
Evaluation
of
Search for
alternatives
alternatives
Problem
recognition

Figure 1.1: Buying decision process

Types of Buying Behaviour

The framers of the model recognised that this is a framework and not all buying
decisions will follow this process as some consumers may move from Stage 1 to Stage
4, for repeat purchases. Movement from one stage to another (in particular, his search
for and evaluation of alternatives) was observed to be significantly influenced by the
type of buying behaviour upon which the consumer was embarking. In this regard,
four (4) distinct types of buying behaviour may be discerned:

1. Routine problem solving

Very little effort is expended by the purchaser. He may move directly from Stage 1
to Stage 4 of the buying process.

2. Limited problem solving

Some effort is extended in identifying and evaluating alternatives and may be

employed when the purchaser is familiar with the product category but not the
brand and there is a moderate amount of risk associated with the purchase.

3. Extended problem solving

Significant effort is placed at all levels of the buying process. Both the category
and the brand may be unfamiliar and there is significant risk associated with the
purchase. This may relate to high value items such as purchasing a holiday villa in
St. Lucia or a yacht in St. Vincent and the Grenadines.

MKTG3070 Consumer Behaviour – UNIT 1  13

 4. Impulse buying

The buyer may be aware of the product category and even the brand but there is
little planning and the purchase poses little risk.

Figure 1.2 (below) presents the four (4) types of buying behaviours.

Figure 1.2: Types of buying behaviour

The ‘level of involvement’ models utilise a similar classification of buying behaviour,

as follows:

1. Habitual buying behaviour – low involvement, little brand differences

2. Variety-seeking buying behaviour – low involvement, significant perceived brand

differences

3. Dissonance-reducing buying behaviour – highly involved, little brand differences

4. Complex buying behaviour – highly involved, significant brand differences

14  MKTG3070 Consumer Behaviour – UNIT 1

The buyer’s search for alternatives is also influenced by his perception of the risk
associated with the purchase, that is 1) personal risk (physical), 2) social risk (to
reputation and image) and 3) economic risk (financial), as represented in Figure 1.3.

personal
risk

social
risk

economic
risk

Figure 1.3: Buyer perception of risk

MKTG3070 Consumer Behaviour – UNIT 1  15

 For more information on consumer purchase behavior you can visit the following
video links:

Play Video
Habitual buying behavior:
B2Bwhiteboard (2012, February 9). Habitual Buying Behaviour.
Retrieved from:

uu [Link]

Variety seeking buying behavior:

B2Bwhiteboard (2012, February 9). Variety-seeking Buying Behaviour.
Retrieved from:

uu [Link]

Complex buying behavior:

B2Bwhiteboard (2012, February 6). Complex Buying Behaviour.
Retrieved from:

uu [Link]

Consumer and Consumer Decision Process:

Wolters World (2012, September 28). Consumers Decision Process.
Retrieved from:

uu [Link]

The Importance of ‘needs’ to the consumer buying process

An understanding of needs is critical to the decision maker because the recognition of
a need jumpstarts the entire buying decision process. Without it, there is no decision
making on the part of the consumer. The recognition of ‘need’, a state of felt deprivation,
may come from a number of sources or stimuli:

Internal – internal to the individual, he realises it himself

External – an advertisement, referral from a friend or relative or some situational factor

such as need for an umbrella during a downpour of rain!

16  MKTG3070 Consumer Behaviour – UNIT 1

Abraham Maslow’s ‘Hierarchy of Needs’ is a useful framework for appreciating the
range of needs that different consumers may have at any particular time of the day
and their motivation for moving toward fulfilment of those needs. Maslow contends
that individuals are guided to fulfil their lower level needs at the base of the pyramid
before fulfilling their higher order needs at the top (Emrich, 2002).

This is particularly important for frontline service personnel who deal with customers
on a regular basis because it is sometimes more important to recognise the underlying
need that the customer is trying to fulfil, rather than merely the product or service that
is being sought.

Figure 1.4: Maslow’s Hierarchy of Needs

Source:
[Link]

As an individual, it is also important to establish where you are with respect to your
own ‘hierarchy of needs’. View the video linked below to learn more about the needs
that shape consumer behaviour.

MKTG3070 Consumer Behaviour – UNIT 1  17

 Play Video
Consumer Needs:
Tracy, B (2014, September 16). 5 Needs That Shape Consumer Behaviour.
Retrieved from:

uu [Link]

ACTIVITY 1.3
Reflective Practice (1 HOUR)

Reflective Practice: Personal need recognition

Think about yourself and your personal circumstances for a few minutes
then:

a) Write down on a sheet of paper all the things that you need in your life
right now. (Remember, a need is a state of felt deprivation, that is, you
believe that you are missing something, there is a gap.)

b) Review the list and next to each item place a letter next to it as follows:
P – physiological needs; S – safety needs; L – love and belonging; E-
esteem; SA – self actualisation

c) Add all your needs that have emerged under each category, paying
particular attention to the wider categories of Basic, Psychological or Self-
fulfilment needs.

Successful accomplishment of this exercise will not only help you to

recognise your own needs but will create awareness of the needs of
others and will assist you with developing your strategies for a new or
enhanced product or service with the Group Project.

18  MKTG3070 Consumer Behaviour – UNIT 1

Session 1.3 Summary

During this session we paid close attention to the buying decision process. Using
the types of decisions made by consumers as a backdrop, we looked at the decision
process that theorists have observed customers utilise when making purchases. Next
the session reviewed the two models depicting types of buying behaviour and the
risks factors perceived by consumers when making buying decisions.

Unit Summary

The previous session brought to an end this introductory unit on consumer behaviour.
The first session focused on establishing the foundation pillars of the subject matter,
beginning with definitions, core concepts and an appreciation of the importance of the
study of consumer behaviour. Session 2 delved deeper into the subject areas, looking
at the theoretical underpinning of consumer behaviour, beginning with marketing and
including psychology, sociology, economics and applied research. The final session
sought to explain the buying decision process, the core of consumer behaviour as
well as the types of buying decisions, buying behaviour and needs of consumers. In
the next unit we shall examine the key internal influences on consumer behaviour, in
particular, personal and psychological factors.

MKTG3070 Consumer Behaviour – UNIT 1  19

 References

About APA. (2016). Retrieved from:

[Link]

American Marketing Association. (2016). Dictionary. Retrieved August 12, 2016,

from American Marketing Association:
[Link]

Consumer Psychology: Definition & Behaviour. (2016). Retrieved from:

[Link]

Engel, B. A. (1968). Consumer behaviour. New York: Holt, Reinhart, & Winston.
Emrich, M. (2002). Abraham Maslow (1908-1970). Retrieved from
[Link]

Foxall G. R. (1974). Sociology and the Study of Consumer Behaviour, The

American Journal of Economics and Sociology, Vol. 33, No. 2 (Apr., 1974), pp. 127-
135. Retrieved from Stable URL: [Link]

Kirchler, E and Hoelzl, E (Eds.). Consumer Behaviour and Economic Decisions.

Journal of Psychology, Volume 219, Number 4, 2011, (NA). Retrieved from:
[Link]

Maslow’s Hierarchy of Needs. Retrieved from [Link]

Molm, Linda D., Perinbanayagam, R., Blau, Peter M., McPhail, C., Walker,
A., & Ackers, Ronald L. (1981). The Legitimacy of Behavioral Theory as
a Sociological Perspective [with Comments and Rejoinder]. The American
Sociological Association, Vol. 16, No. 3, 153-184.

Nicosia, C. Y. (1964). Uses of Psychology in Studying ‘Consumption’ Behaviour.

Journal of Marketing, Vol 28, 51-54.

Sociology and the Study of Consumer Behaviour (1974). Vol.33, No. 2. The
American Journal of Economics and Sociology, 127-135.

The Chartered Institute of Marketing. (2016). Who we are and our vision for
marketing. Retrieved from [Link]

Wikipedia. (n.d.).Wikipedia. (2016, August 10). Sociology. Retrieved August 11,

2016, from Wikipedia: [Link]

Zielinski, J., & Robertson, T. S. (1982). Consumer behavior theory: excesses and
limitations. NA-Advances in Consumer Research Volume 09. Retrieved from
[Link]

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