Putting Consumer Behaviour Theory into Practice

What Is Consumer Behaviour Theory?

what is consumer behaviourTrying to understand what goes on in a consumer’s head and exactly what
makes them buy is a goal of every business. The only way to do this is by closely studying the buying
patterns and building theories and models.

Consumer behaviour theory is the study of how people make decisions when they purchase, helping
businesses and marketers capitalise on these behaviours by predicting how and when a consumer will
make a purchase. It helps to identify what influences these decisions, as well as highlight strategies to
proactively manipulate behaviour.

Top factors that influence consumer behaviour

Customer behaviour is shaped by a few key factors.

1. Psychological

Psychological factors include a person’s attitude, perceptions about a situation, their ability to
understand information, what motivates them, their personality and beliefs.

For example, a person who is actively reducing their plastic consumption will buy differently to someone
who doesn’t believe in climate change.

2. Personal

Personal characteristics include age, gender, financial situation, occupation, background, culture and
location.

An older person will probably shop in a different way to a younger person, for example with a
preference for bricks-and-mortar stores rather than online shopping.
3. Social

Social influences can include a person’s friends, family, community, work or school community, or
groups they associate with such as a local church or hobby group. It can also include social class, living
conditions and education.

A shopper who is at a school where a certain style of trainers is in fashion might search out similar shoes
to fit in with their peers.

Why Consumer Behaviour Theory is Important

Consumer behaviour theory allows businesses to understand more about their target audience and so
be able to craft products, services and company culture to influence buying habits.

Consumer behaviour allows a business to understand:

What consumers think about your brand versus your competitors

How they choose between different alternatives

Their behaviour while shopping

How the environment around them influences their behaviour

What marketing messages or pricing strategies they best respond to

Their preferred methods of paying

What products or services they are searching for to fill a need

Ultimately, by paying attention to your customers’ buying patterns you can launch products and services
that they’ll have a higher inclination to buy. Or make changes to store environments or online shopping
processes to make it seamless – therefore increasing your revenues.

For example, if you have a large physical store and you notice that shoppers pick up products to buy,
look around for a while, seem to get frustrated and then put them down and walk out without buying, it
might be because you need better ‘Pay Here’ signage directing them to the nearest till.

The Different Types of Buyer Behaviour

types of buyer behaviourIt’s important to understand that everyone is different and makes different
buying decisions. However, these can generally be categorised into these four types:

1. Routine response

Brand recognition and repetition plays a large part in this type of buying behaviour. People will purchase
a brand they recognise, have tried before, or like the best. For example, when choosing a loaf of sliced
bread, you’ll probably have a favourite that you reach for most often.

This type of buying doesn’t require much thought.

2. Limited decision-making

Often mid-level, occasional buying decisions fall into this category. They require some research and little
amount of thought before making a choice.

For example, you might be going out to the cinema and want to eat dinner beforehand so look at the
restaurants nearby. You pick one that’s within your budget, that offers the food you like, that’s within a
short walking distance and that has a table for the time you’d like.

3. Extensive decision-making

Buying decisions that involve a big financial investment or personal impact fall into this category. Most
buyers will spend an extensive amount of time researching before making a decision.

Buying a house is one example. Many in the market for a new home will research thoroughly, view
numerous properties, weigh up different options, visit local areas, check the nearby schools and facilities
etc. before a purchase is made.

4. Impulse buying

An impulse buy has no prior planning. It is a purchase made on a whim and with little thought. It’s often
irrational and in the moment.
For example, if you’re waiting in a line to buy your lunch and see a magazine within easy reach with an
eye-catching front cover, then you might pick it up and buy it with no in-depth consideration.

These ‘types’ will change depending on the situation and person. For example, a consumer who has just
started a low-fat diet might take longer choosing a food item by checking the ingredients online and
looking at reviews than someone who isn’t. An affluent person might impulse-buy a car, whereas
another might spend an extensive amount of time researching different options and going for test
drives.

And many will spend months researching where they want to spend their two-week holiday, whereas
others decide on a whim where to go and book a holiday at the last minute. And some situations will
force a consumer who is usually an extensive decision maker into making an impulse buy – for example
if their laptop breaks down and they need to buy another quickly without doing their usual due diligence
because they can’t operate without one.

This is why buyer behaviour is described as being both predictable and irrational.

The Different Types of Buyer

different types of buyerOver the years, psychologists, sociologists and researchers have come up with
different models and theories about different kinds of buyers.

One research theory proposes eight characteristic buyers:

Perfectionist: the customer looks for the best quality of product.

Brand-aware: the customer prefers brands and designer labels.

Hedonist: the customer treats shopping as a form of enjoyment.

Price-aware: the customer seeks low prices, sales, or discounts.

Fashion-aware: the customer likes to be up-to-date and seeks variety.

Impulsive: the customer is prone to spontaneous purchases.

Confused: the customer experiences too much information or choice.

Habitual: the customer is loyal to brands and follows a routine.

Another model looks at adoption rates of new products, grouping customers into five kinds of
consumers based on how they respond to new products and the time it takes for uptake.

Innovators 2.5%

Early Adopters 13.5%

Early Majority 34%

Late Majority 34%

Laggards 16%

Most consumers will only buy a new product once it has become mainstream, so to make a product
mainstream, businesses need to focus their early marketing efforts on getting the innovators and early
adopters on board.

Analysing Buyer Behaviour

data analysisThere are various ways to analyse buyer behaviour, however these questions from London
School of Business and Finance are a great place to start:

Who purchases your products and services? Get a clear idea of your target audience with market
research.

Who makes the decision to purchase your products and services? The purchaser might be different to
the actual person making the decision, e.g. a painter and decorator will buy paint chosen by their
customer.

Who influences the decision to purchase the products? Parents might be the shoppers but they are
influenced by their children.

How is the purchase decision made? A person employing a gardener for the first time might be told
what specific products to buy by the gardener.

Why does the consumer buy a product? The rationale behind the purchase. For example, a person on a
long commute might buy a thick milkshake because it lasts a long time and will keep them occupied
during the drive.
Why does a consumer prefer one brand over another? Factors include cost, quality, customer service,
previous experience, brand reputation and packaging etc.

Where do customers purchase the product? Physical shops, online, face-to-face, via a third party etc.

When do consumers buy a product? Specific occasions, for example Valentine’s Day or looking for a new
gas and electric provider at new premises.

What is the consumer’s opinion of the product? Do they view it as value for money, cheap or expensive;
is it cool or functional; is it a throwaway item or do they expect it to be around for years etc.

What is the role of consumers’ lifestyle in their buying behaviour? Fitness fans will be more interested in
purchasing technical clothes for exercise, whereas those who love movies might be inclined to purchase
a movie streaming subscription.

How Consumer Buying Habits Have Changed

buying habitsConsumer buying habits are continually evolving, and the ways that businesses think about
them have changed too. Initially, it was believed that consumers were rational and behaved in
consistent ways. However, as time progressed and more sophisticated studies were conducted, it
became apparent that consumers often behave irrationally with numerous factors determining
decisions and buying habits.

Consumers were then segmented, and user experiences were analysed to understand how they shaped
buying habits. The post-purchase activity and habits were also studied so a customer journey could be
mapped out from first decision, through to consideration, purchase and post-purchase satisfaction.

It’s important to look at trends, for example eating habits have changed dramatically from ‘meat and
two veg’ to an appetite for cuisines from around the world. More people are becoming vegan, and
there’s been an increase in demand for plant-based foods.

Payment methods and buying preferences have also evolved. Most people are happy to buy online,
however this was risky back in 1995 when the internet was new and Amazon first launched.

Consumers are now purchasing SaaS services and subscription boxes, streaming movies rather than
going to a shop to rent a DVD. And buying their groceries online without ever having to step foot inside
a grocery store.
Putting Consumer Behaviour Theory into Practice

putting it into actionUnderstanding the different types of buying decision and mapping these against
your target audience and buyer personas will help you to craft compelling marketing messages, eye-
catching packaging, the right pricing models, deals and discounts and other benefits to hook in your
consumer.

Assessing trends and watching the changes in consumer buying patterns will also ensure you not only
sell a product or service that people want, but that you can keep up with demand. You’ll be able to
make predictions and plan the best times for launches and special offers.

It’s important to understand that there are numerous variables and that not every consumer is the
same. Map out different scenarios, and attempt to put yourself in the mind of your shopper. For
example, a person who is usually an extensive researcher and is forced to make an impulse decision
might appreciate a 30-day cooling off period, allowing them to return the purchase if it turns out not to
be suitable.

Spending time getting this right will see you experience a rush from consumers to buy your new product
or service, an increase in fast and retention and be able to create the right environments to encourage a
purchase.

Consumer Behavior Concepts

Marketers may spend significant time trying to parse the thoughts, patterns, and behaviors of
consumers. The better they understand their target audience, the more they can cater to that
audience’s wants and needs. Over the years, many people have invented theories to try and streamline
what they believe explains these behaviors.

1. Theory of Reasoned Action

Martin Fishbein and Icek Ajzen originally conceived the theory of reasoned action: a consumer behavior
theory that focuses on the relationship between marketing and the preexisting attitudes consumers
bring to their purchasing decisions.

According to the theory of reasoned action, consumers act on behaviors that they believe will create or
receive a particular outcome, familiar or otherwise. As such, rational decision-making is the chief
element of what drives consumers to make purchases.
This consumer behavior concept leans on the significance of specificity over obtuseness. In other words,
a consumer may only take a specific action when given a reason to believe there’ll be a specific desired
result. From the time the consumer decides to move forward with a decision to the moment the action
is finished, the consumer can change their mind or select a different course of action.

This has led marketers to several insights, the first being how they must associate a purchase with a
specific positive result. For example, AXE markets its body spray products in such a way that all who use
them might believe they have improved desirability with women. The theory then emphasizes the
importance of moving consumers through the sales pipeline, rather than keeping them idle, where they
might have an opportunity to talk themselves out of a purchase or decide to spend their money on a
competing brand.

2. Engel Kollat Blackwell Model

The Engel Kollat Blackwell (EKB) Model is a natural evolution of the ideas found in the theory of
reasoned action. This theory of buyer behavior operates on a four-phase process that influences how
consumers make purchasing decisions: input, processing information, decision stages, and variables in
the decision-making process.

Input is the first phase, which is simply the stage when consumers take in the most marketing materials
either through billboards, online advertisements, or in-person displays. Through the data collected in
these materials, they graduate to information processing, during which they combine that input with
experience and expectations to make the best decision for their current circumstances. Rational insight
leads them to the next step, which is where they actually make a purchasing decision based on the
information they collected.

The decision process also has five phases: recognition of need, information searching, evaluating
alternatives, purchasing (or choosing), and post-purchase outcomes.

During the initial information stage of the EKB model of consumer behavior theory, input is the most
valuable. Consumers receive enough information about the product or service to easily recall or turn to
the company’s products for future needs, and again during the external influence phase. One industry
that has a good grasp of this sequence is the lifestyle industry, where brands know exactly how to
market their products to trigger a desire in the consumer, usually so they look, smell, or feel better than
they would if they used competing brands.

3. Motivation-Need Theory

In 1943, the broader psychological community felt the impact of Abraham Maslow’s hierarchy of needs:
a theory that insists that individuals act to satisfy and fulfill their needs based on a system of five
priorities of increasing importance — physiological survival, safety, love, esteem, and self-actualization.

Maslow’s theory was used across business and marketing classes to explain why consumer-tailored
marketing messages were critical to sales success. By appealing to consumers in a way that relates to
their level of need, marketing campaigns could prioritize purchases that instill significance and urgency.

Marketers with a strong understanding of motivation-need consumer behavior theory can effectively
craft campaigns and advertisements around an artificial need that they control within the consumer. A
common modern example comes in the form of luxury carmakers that emphasize the safety and security
features within their vehicles over the aesthetic, convincing consumers that spending their money on an
expensive luxury car is acceptable because it fulfills the need to provide physiological safety for oneself
and family.

4. Hawkins Stern Impulse Buying

In contrast to the focus on rational action found in most other theories of consumer behavior, Hawkins
Stern put its focus on impulse behavior. It’s Stern’s argument that the impulse to purchase was only
one-half of average consumer behavior, fitting neatly beside tendencies toward more rational
purchasing decisions. These impulse decisions are influenced mostly by external stimuli like walking past
a convincing advertisement and possess very little relationship to traditional decision-making habits.

Impulse buying exists on four levels of the Stern philosophy. The first level is the quick, pure impulse
purchase, like making a last-minute purchase on the way out of a grocery or hardware store. The second
level is known as the “reminded” impulse purchase, which makes associations between one product and
another. For example, placing chips and salsa in the same aisle, so if you’re planning to buy one, you’re
reminded you may want the other.
The third level is the suggested impulse purchase, such as tacking on a warranty offer as you purchase
electronics or power tools. The fourth level is the planned impulse decision, which is deliberate in that
consumers know they want to buy a type of product, but just aren’t sure of the specifics.

Marketers have spent years trying to master the power of impulse purchases. From the art of packaging
to the arrangement of a product on store shelves, everything has an impact on the target audience’s
impulse control.

5. Theory of Buyer Behavior

The core concept present in the theory of buyer behavior is that purchasing behavior is, generally
speaking, reliably repetitive and prone to establishing a familiar purchasing routine to save time and
simplify the decision-making process. In answer to this, the theory seeks to identify the elements of that
decision process and note any changes that occur, and whether those things grew out of a commercial
and social environment that any given brand could influence.

According to this consumer behavior theory, a buyer’s preferred choice of brand is informed by motives;
alternative choices, or courses of action; and any decision mediators that match the motives with those
alternatives, such as whether the buyer thinks coffee is better in the morning or the evening. Through
understanding these mediators, the alternative brands on the market, and the brands the consumer is
aware of, there’s room to find a gap and make something that fills that gap.

In addition, there’s an opportunity when a new buyer is in the market to purchase a new type of product
(product class), but lacks experience or knowledge of the product needed. The information the buyer
seeks or accidentally receives from a third party is processed through the lens of what’s needed and
how well that product might fulfill that need.

It may also be compared to previous types of products and use a similar process in making the new
decision. For example, according to the theory of buyer behavior, a buyer may generalize the experience
of purchasing a refrigerator and use that experience to inform the purchase of a new dishwasher.

Regardless of the source, the one making the purchase develops the decision mediators needed to
reliably choose that brand in the future based on what seems to have the best potential for satisfying
the purchaser’s motives.
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