Chapter 3 – Consumer Behaviour: How People Make Buying Decisions
- Understanding the many influences on the consumer behaviour.
Consumer behaviour is influenced by many things, including environmental and marketing factors, the situation, personal and psychological factors, family, and culture. Businesses try to figure out which is more important to the group of consumers they wish to target so they can reach the people most likely to buy their products in the most cost-effective way possible. Businesses often try to influence a consumer’s behaviour with things they can control such as the landing page of their website, their ranking on a search engine, the layout of a store, music, grouping and availability of products, pricing, and advertising. While some influences may be temporary and others are long lasting, different factors can affect how buyers behave. These factors may influence you to make a purchase, buy additional products, or buy nothing at all.
Have you ever been in IKEA and couldn’t find your way out? Marketing professionals take physical factors such as a store’s design and layout into account when they are designing their facilities. The longer you wander around a facility, the more you are likely to spend. However, Ikea also understands that sometimes you want to get in and out quickly so they have added in-store maps with that show you where you are in the store and shortcuts that help you navigate more quickly through the store.
Grocery stores frequently place fruits and vegetables, and cleaning products on the opposite ends of the stores because people often need both types of products. To buy both, they have to walk around an entire store, which increases the chance the consumer will see something else they want to buy. Also think about products positioned at the end of aisles or on separate displays in the middle of major aisles. ‡
Store locations also influence behaviour. Tim Hortons has done a good job in terms of locating its stores. It has over 4,000 restaurants across Canada so whether you are in downtown Toronto or driving past a small town in Springhill, Nova Scotia, you are likely to pass a Tim Hortons. You can also buy Tim Hortons coffee at airports, or any place where there is foot traffic, that is many people passing by a location. ‡
Physical factors that companies can control, such as the layout of a store, music played at stores, the lighting, temperature, and even the smells you experience are called atmospherics. Perhaps you’ve visited the office of an apartment building and noticed how great it looked and even smelled. It’s no coincidence. The managers of the building were trying to get you to stay for a while and have a look at their facilities. Research shows that “strategic fragrancing” results in customers staying in stores longer, buying more, and leaving with better impressions of the quality of stores’ services and products. Mirrors near hotel elevators are another example. Hotel operators have found that when people are looking at themselves in the mirrors, they don’t feel as if they are waiting as long for their elevators (Moore, 2008).
Not all physical factors are under a company’s control, however. Rainy weather can be great for some companies, such as umbrella manufacturers such as Totes, but a problem for others (Totes-Isotoner, n.d.). Beach resorts, outdoor concert venues, and golf courses suffer when it is raining heavily. Businesses such as automobile dealers also have fewer customers because most people don’t want to be test driving a car in the rain.
Companies often attempt to deal with physical factors such as bad weather or situations that affect consumer purchase patterns by offering price discounts or alternative ways to shop. For example, many resorts offer consumers price discounts to travel to beach locations during hurricane season. During the COVID-19 pandemic, stores moved to a Click and Collect model when customers were unable to enter the stores and the delivery capacity could not be expanded fast enough to deliver products direct to customers’ homes. Customers were able to order products online and then go to the store when the item was ready to be picked up. Employees brought the items out to the customers. ‡
Crowding is another situational factor. Have you ever not purchased anything or left the store because it was just too crowded? Some studies have shown that consumers feel better about retailers who attempt to prevent overcrowding in their stores. However, other studies have shown that to a certain extent, crowding can have a positive impact on a person’s buying experience. Herd behaviour refers to a kind of decision making where people act as a group, rather than making decisions as individuals (Gaumer & LaFief, 2005). People are naturally curious. If people are lined up to buy something, you want to know why. Should you get in line to buy it too? Black Friday Sales is a time when stores offer special deals for one day and open very early in the morning. ‡
It used to be that buying individual one-time use plastic water bottle was considered to be the healthy and safe way to consume water instead of drinking tap water. Now, the trend is toward carrying recyclable water bottles that you refill with tap water. Social norms refers to expectations what you should say or do in specific situations based on the values of the social group or society. Today, some people will judge you negatively for carrying non-recyclable plastic bottle. Thus, what others think of you might affect the product you will be seen by others in your social group. ‡
Companies like Pampered Chef that sell their products at parties understand that the social situation makes a difference. When you’re at a friend’s Pampered Chef party, you don’t want to look cheap or disappoint your friend by not buying anything. If you have drunk too much when you were out with friends because you were worried about what they thought, your consumption was affected by the people you were with (Gregory and Munch, 1997).
The time of day, time of year, and how much time consumers feel like they have to shop affect what they buy. Researchers have even discovered whether someone is a “morning person” or “evening person” affects shopping patterns. Have you ever gone to the grocery store when you are hungry or after getting paid when you have money to spend? When you are hungry or have cash, you may purchase more than you would at other times. Seven-Eleven is a company that is extremely sensitive to time and how it affects buyers. The company’s point-of-sale systems at its checkout counters monitor what sells well and when. The goal is to get the products on the shelves when and where consumers want them. For example, Seven-Eleven Australia offers Krispy Kreme donuts, a brand of fresh donuts, in the morning. Seven-Eleven Indonesia has free internet, seats, inside and out, and live music at night. 7-Eleven, Denmark offers fast snacks and healthy food all day (Klook Team, 2020). ‡
Companies worldwide are aware of people’s lack of time and are finding ways to accommodate them. Some doctors’ offices offer drive-through shots for patients who are in a hurry and for elderly patients who find it difficult to get out of their cars. During the COVID-19 pandemic, drive through testing and vaccines were offered as a way to keep people at a distance from each other and to expedite the process. ‡ On Amazon, for example, if you know what you want to order, to speed up the ordering process, you just click on Buy Now and Amazon uses information stored about you, your default method of payment and delivery address to complete the transaction. ‡
Reason for the Purchase
The reason you are shopping also affects the amount of time you will spend shopping. Are you making an emergency purchase? Are you shopping for a gift or for a special occasion? Are you buying something to complete a task and need it quickly? In recent years, Shoppers Drug Mart locations have sprung up all over Canada. One-stop shopping is one of the key reasons. Shoppers offers a wide variety of goods and services, everything from prescribed drugs and over the counter drugs, to gifts and cards, as well as groceries. It means that you can go to one store and get everything you need. Many of these stores are open 24/7 in locations where there may not be a grocery store open. ‡
Purchasing a gift might not be an emergency situation, but you might not want to spend much time shopping for it either. Gift cards have become more popular because you don’t have to figure out what the person would like, or spend time browsing in a store or online. You can purchase gift cards for online or offline merchants at their store, online or at your local grocery or drug store.
By contrast, suppose you need to buy something expensive, such as a luxury watch. You could buy one online but you may hesitate to do that. What if the watch was fake? What if you didn’t like the way it fit your wrist and you wanted to return it?‡ You would have to consider how to ship it securely so that it gets back to the seller, making the overall purchase more complicated (Hornik & Miniero, 2009). Amazon has noticed the reluctance among consumers to buy clothing online. They offer ‘try-before-you-buy’ method for Amazon Prime members (Amazon, n.d.). You order the item, not pay for it, try it at home when it arrives, and select what you are buying on the website. You are only charged for the items you select if return the items you did not like.
Gender, Age, and Stage of Life
While demographic variables such as income, education, and marital status are important, we will look at how gender, gender orientation, stage of life and age influence purchase decisions.
It used to be a strongly held belief that those who self-identify as male or female need and buy different products (Ward & Tran, 2007). It was thought that they shopped differently and in general, had different attitudes about shopping. For some products and while many people wish it weren’t true, in a study commissioned by PEW, a research nonpartisan fact tank, women who have a male partner and children report that they are more likely to do the most of the meal preparation and grocery shopping (Schaeffer, 2019).
Recent research into many product categories suggest focusing on sexual orientation reflects an unnecessary stereotype (Eisend and Hermann, 2020). While certain products could be considered as a predominately female or male product, best practice suggests that you consider what biases you are bringing to the decision about gender. Here are some questions you should be asking not only about gender, but other potential biases about people. ‡
Are you bringing in gender or gendering the product or service when your company doesn’t need to?
Who do you think the product or service is for, and why do you think that?
Are there other customer segments who share some characteristics with this group who might also be interested in the product or service? ‡
Surprisingly some brands still make assumptions about gendered behaviours. Making assumptions like this can be costly in a social media world where groups can target your brand and company for inappropriate communication. Here you can find some examples of ads using inappropriate gender tropes.
You have probably noticed that the things you buy have changed as you age. Think about what you wanted and how you spent five dollars when you were a child, a teenager, and an adult. When you were a child, the last thing you probably wanted as a gift was clothing. As you became a teen, however, cool clothes probably became a bigger priority. Depending on your stage of life, what you purchase will change.
If you’re single and working after graduation, you probably spend your money differently than a newly married couple. How do you think spending patterns change when someone has a young child or a teenager? Diapers and day care, tuition, electronics, regardless of the age, children affect the spending patterns of families. Once children leave home the parents spending patterns may change again. ‡
Ageism is an increasingly serious issue as more people live longer and are healthier. Like other forms of discrimination, it is important not to make assumptions about people based on age. The World Health Organization cautions that there is no ‘average’ older person. Their interests and capabilities are shaped by a variety of factors. Older doesn’t equal dependent. Adopting healthy lifestyles and with medical interventions, older Canadians will continue to participate in the workforce, in their communities and with their friends and family, longer than any previous generation. “Biological ageing is only loosely associated with person age in years. Some 80 year-olds have physical and mental capacities similar to many 20 year-olds. Other people experience declines in physical and mental capacities at much younger ages” (World Health Organization, 2020). ‡
For example, the group sixtyandme has information on their website devoted to encore career—that is, businesses and careers that women have started after they turned 60 years of age. Note that they make extensive use of social media tools and online connections (Sixty and Me, n.d.). One advantage of older consumers is that the major expenses of the middle stage of life are over. Many have more disposal money than ever and those marketers that target them may reap the benefit (Beer, 2019). ‡
Your chronological age, or actual age in years, is one thing. Your cognitive age, or how old you perceive yourself to be, is another. A person’s cognitive age affects his or her activities and sparks interests consistent with his or her perceived age (Barak & Gould, 1985). Chronological age used to be considered a significant predictor of consumer behaviours, including people’s dining out, watching television, going to bars, playing video games, and shopping (Barak & Gould, 1985). However, companies have discovered that the group known as Baby Boomers (roughly 57-75 years of age) are redefining older age and many have taken up activities traditionally only done by younger adults. ‡
Lifestyle, Activities, Interests and Opinions
If you have ever watched the reality TV shows such as the Real Housewives franchise, you can see that despite the fact the women are chosen for where they live, their lifestyles (the way in which they live and present themselves) can differ radically.
In order to understand consumers, companies may interview people about their lifestyles, activities, interests, and opinions. Consumers are asked about what they do, that is, how they spend their time and what their priorities, values, opinions, and general outlook on the world are.
Asking people directly is not only a way to understand them. During the COVID-19 pandemic, researchers used GPS data collected from cell phone carriers to view human mobility and social interactions in order to understand which groups or locations tended to increase the risk of infection. Some companies have paid people to keep a daily written or photographic journal of their activities and routines. ‡
Unilever took a very creative approach to understanding how women think of themselves as part of the Dove Real Beauty campaign. Women were asked to describe their face in detail to an FBI trained Forensic artist from behind a curtain. After the first sketch was complete they met with another person who went onto describe the women to the sketch artist. More than 80% of the women had distorted versions of themselves. You can watch the video on YouTube to see the reaction of the women and the conclusions they drew after looking at both sketches.
A number of research organizations examine lifestyle and psychographic characteristics of consumers. Psychographics combines the lifestyle traits of consumers and their personality styles with an analysis of their attitudes, activities, and values to determine groups of consumers with similar characteristics.
Have you ever felt like going shopping for fun, but other times, you weren’t interested? People’s moods temporarily affect their spending patterns. Some people enjoy shopping. They find it entertaining. Internal and external factors can affect a person’s mood.
Let’s say you normally work out in the morning, but you slept late and didn’t have time to fit it in. For the rest of the day, you might feel out of sorts and upset with yourselves for not getting up on time. When grocery shopping that afternoon, you may be more tempted buy snack food rather than fruits and vegetables. It is difficult for marketers to know how each consumer is feeling. However, snack food companies understand from marketing research how people are thinking about snack food. They will promote their products by connecting the product to a healthy ingredient even if the snack has high fat or sugar content. For example, Nature Valley Protein Bars come in various flavors including coconut almond. That sounds healthy so you feel as if you are having a treat but also eating healthily. ‡
Personality and Self-Concept
Personality describes a person’s disposition, helps show why people are different, and encompasses a person’s unique traits. The “Big Five” personality traits that psychologists discuss frequently include openness or how open you are to new experiences, conscientiousness or how diligent you are, extraversion or how outgoing or shy you are, agreeableness or how easy you are to get along with, and neuroticism or how prone you are to negative mental states.
Do personality traits predict people’s purchasing behaviour? Can companies successfully target certain products to people based on their personalities? How do you find out what personalities consumers have? Do extraverts really spend money and introverts only save? ‡
The link between people’s personalities and their buying behaviour is somewhat unclear to the outside observer. While there are lists of questions that can help a company understand their customers in detail, it is an expensive process and the cost of the research as well as product development may not result in a positive Return on Marketing Investment.
Marketers have had better luck linking people’s self-concepts to their buying behaviour. Your self-concept is how you see yourself, whether positive or negative. Your ideal self is how you would like to see yourself, whether it’s more attractive, more popular, more eco-conscious, and how you think others see you. Your self-concept influences your purchase behaviour. Marketing researchers believe people buy products to enhance how they feel about themselves to get themselves closer to their ideal selves. Many beauty products and cosmetic procedures are advertised in a way that’s supposed to appeal to the ideal self people seek. All of us want products that improve our lives.
Motivation is the inward drive we have to get what we need. In the mid-1900s, Abraham Maslow, an American psychologist, developed the hierarchy of needs shown in Figure 3.11 “Maslow’s Hierarchy of Needs”.
Maslow theorized that people have to fulfill their basic needs, food, water, and sleep, before they can begin fulfilling higher-level needs. Have you ever gone shopping when you were tired or hungry? Even if you were shopping for something that you really wanted you wanted to sleep or eat even more.
The need for food is recurring. Other needs, such as shelter, clothing, and safety, tend to be enduring. Still other needs arise at different points in time in a person’s life. For example, during grade school and high school, your social needs probably rose to the forefront. You wanted to have friends and get a date. Perhaps this prompted you to buy certain types of clothing or electronic devices. After high school, you began thinking about how people would view you in your “station” in life, so you decided to pay for college and get a professional degree, thereby fulfilling your need for esteem. While Maslow believed that people can attain and maintain a state of self-actualization, other researchers do not. However, the idea that people move through different motivational stages and that they affect their buying decisions has been widely tested and found to be useful in persuading people to buy products and services. ‡
Achieving self-actualization and the manifestation of each of the motivational needs will vary by culture and other external factors. Countries with a Western culture such as Canada or the United States are more strongly focused on the individual, and so these consumers will be more motivated by messages about products and services that will help them attain self-actualization. Consumers living in countries with an Eastern culture such as India or China that are more group focused, tend to more motivated by belongingness and group needs.
Perception is how you interpret the world around you and make sense of it in your brain. You do so via stimuli that affect your different senses, sight, hearing, touch, smell, and taste. How you combine these senses also makes a difference. In one study, consumers were blindfolded and asked to drink a new brand of clear beer. Most of them said the product tasted like regular beer. However, when the blindfolds came off and they drank the beer, many of them described it as “watery” tasting (Ries & Ries, 2009).
Daily, consumers receive hundreds of messages from television, radio, magazines, websites, social media and even bathroom doors. Consumers are online, watching television, and checking their smartphones simultaneously. Some, but not all, information makes it into their brains. Selecting information from all that is received is called selective exposure.
Companies spend money on a variety of communication channels to be sure that you are aware of their message and that you remember it. Have you ever read or thought about something and then started noticing ads and information about it popping up everywhere? Facebook and Google make use of our information when we access their platform to create search results and advertisers use that information to make sure their brand is the one you see. ‡
In addition, when you are interested in a product or service, you become more aware or attuned to information about it. We are not aware of everything we are exposed. Selective attention is the process of filtering out information based on how relevant it is to you. At other times, people ignore or forget information and this is called selective retention. We may be busy or stressed or the information contradicts ourbeliefs is more likely to be ignored or forgotten. For example, cigarette smokers may ignore or not even notice the anti-smoking warnings on a package of cigarettes. ‡
Another potential problem that consumers may experience is selective distortion or misinterpretation of the intended message. Promotions for weight loss products show models that look slim and trim after using their products, and consumers may believe they will look like the model if they use the product. The company makes use of this misinterpretation by the way the present the model before and after, the lighting used or even the clothing worn. Sometimes the misinterpretation is not created by the company, but instead by the way in which consumers use the product or service. On many Ikea products, there is a symbol to indicate that for the furniture to be used safely, it should be attached to the wall to prevent it falling if full, the drawers open and a child climbs on it.
Learning refers to the process by which consumers change their behaviour after they gain information and is also called experience. It’s the reason you don’t buy a bad product twice. Learning doesn’t just affect what you buy; it affects how you shop. People with limited experience about a product or brand generally seek out more information than people who have used a product before.
Companies try to get consumers to learn about their products in different ways. Car dealerships offer test drives. Food companies give free samples. To promote its coffee, McDonald’s gave customers a free cup of coffee. Have you ever eaten the food samples in a grocery store? While sampling is an expensive strategy, it allows consumers to try the product with no risk. Often after trying, consumers buy the product.
Another kind of learning is operant or instrumental conditioning. Learning occurs through repetitive behaviour that has positive or negative consequences. Companies engage in operant conditioning by rewarding consumers with incentives, which cause consumers to want to repeat their purchasing behaviours. Some examples are toys that come in McDonald’s Happy Meals, free tans offered with gym memberships and a free sandwich after a certain number are purchased.
Another learning process called classical conditioning occurs by associating a conditioned stimulus (CS) with an unconditioned stimulus (US) to get a particular response. The more frequently the CS is linked with the US, the faster learning occurs and this is what advertisers and businesses try to do. How does this operate?
Think about the last time you were at a restaurant to celebrate your birthday. You had a great time with your friends and you remember that the food and service was great. It could be that classical conditioning occurred. That is, the event, celebrating your birthday with good friends made you feel happy. You associate the feelings about the event and your friends with the food you ate and the service you received. The next time you are thinking about a restaurant, you will have good thoughts about the place you celebrated your birthday, regardless of the whether the food and service was actually as good as you remember it. To take advantage of associating conditioned stimulus with an unconditioned stimulus, when promoting their restaurants, many chains show people having a good time rather than highlighting the food they offer. ‡
Attitudes are “mental positions” or emotional feelings, favorable or unfavorable evaluations, and action tendencies people have about products, services, companies, ideas, issues, or institutions. Attitudes tend to be enduring, and because they are based on people’s values and beliefs, they are hard to change. Companies want people to have positive feelings about their offerings. A few years ago, KFC, a fast food restaurant chain, began running ads to the effect that fried chicken was healthy, until the government department that regulates advertising received a complaint and after an investigation, told the company to stop. Wendy’s slogan is that its products are “way better than fast food” is another example. Some people think fast food doesn’t taste good but for many there are times when fast food is what they want. In using this slogan, Wendy’s is trying to get consumers to think about its offerings as being better than their competitors when consumers are in the mood for fast food.
Societal factors such as culture, subculture, reference groups and opinion leaders, and family are external but may have far-reaching influence on consumer’s attitudes, beliefs and behaviour.
Culture refers to the shared beliefs, customs, behaviours, and attitudes that characterize a society. Culture is communicated between people, and other actors in the society, and even by the products and services available. It is often considered the broadest influence on a consumer’s behaviour. Your culture prescribes the way in which you should live and can have a strong effect on the things you purchase.
When we think about a concept called modest fashion, we may think first about the hijab which is worn by Muslim women. However, other religious faiths also have female head coverings. In some cases, these are prescribed by law and in other cases, prescribed by a particular religion. Other traditions such as a national holiday such as Canada Day reflect the way the pride citizens have in their country.
The way in which culture manifests itself in these holidays might be emphasis on military capability versus music, food and drink and parades. Defender of the Fatherland Day in Russia is celebrated with parades and processions in honor of veterans. Women give small gifts to men in their lives. July 1st is celebrated as the founding of Canada with festivities ranging from fireworks, parades and concerts to more casual family gatherings and barbecues. ‡
A subculture is a group of people within a culture who are different from the dominant culture but have something in common with one another such as common interests, vocations or jobs, religions, ethnic backgrounds, and geographic locations. Marketing products based on the ethnicity of consumers is useful but may become harder to do in the future because the boundaries between ethnic groups are blurring. According to Statistics Canada this is ethnic breakdown of Canada in 2016: Canadian, English, Scottish, French, Irish, German, Chinese, Italian, First Nations, East India, plus others.
Subcultures may be created out of people’s interests, similarities, and behaviours. Marketing professionals may design specific products for them. You have may have heard of Cosplay which is an activity and performance art in which people wear costumes to represent a specific character. ‡
Increasingly there is disagreement about the usefulness of social class for marketers’ understanding of their customers. There is tremendous variation between countries due to the role of government in providing income and health security such as in Canada. Moreover, social class is a constructed term with some research focusing on income levels, some on the education level achieved and some on the activities, mindset and power associated with the group (Reeves, Guyot & Krause, 2018). Consumers in the same social class are purported to exhibit similar behaviour. One study that examined the rates of smoking, linked it to low socioeconomic status (Parnia and Siddiqi, 2017). ‡
Reference Groups and Opinion Leaders
Reference groups are groups (social groups, work groups, family, or close friends) a consumer identifies with and may want to join. They influence consumers’ attitudes and behaviour. If you have ever dreamed of being a professional player of basketball or another sport, you have an aspirational reference group. For example, Nike hires pro-athletes such as Serena Williams to promote the company’s products. There may also be dissociative groups or groups with whom a consumer does not want to associate.
Opinion leaders are people with expertise in certain areas. Consumers respect these people and often ask their opinions before they buy goods and services. A person dressed as a doctor may be used in a pharmaceutical ad. Doctors are considered by many to be a trusted source of information, therefore their appearance in the advertisement will increase the chances of you paying attention to the information or brand. People whose opinion you trust will also influence you. If you are on Facebook, and someone whom you know has expertise about a product or service, and recommends it to you, this also may influence you.
Most marketing researchers consider a person’s family to be one of the most important influences on their buying behaviour. Like it or not, you are more like your parents than you think, at least in terms of your consumption patterns. Many of the things you buy and don’t buy are a result of what your parents bought when you were growing up. Products such as the brand of soap and toothpaste your parents bought and used, and even the “brand” of politics they leaned toward (Conservative, Liberal, NDP or Green Party) ‡ are examples of the products you may favor as an adult.
Companies are interested in which family members have the most influence over certain purchases. Children have a great deal of influence over many household purchases. In a 2016 survey, 44 percent of parents said they give their kids more of a say in family decisions than they had as a child, while 45 percent said they are more generous with their kids than their parents were with them (Wong-Li, 2016). ‡
IKEA used this knowledge to design their showrooms. The children’s bedrooms feature fun beds with appealing comforters so children will be prompted to identify and ask for what they want.
Marketing to children has come under increasing scrutiny. Some critics accuse companies of promoting their products to children during children’s television programs or movies to motivate them to ask their parents to buy the product. Some television programs or movies are only created in order to promote the characters in them as toys. The first Lego movie came out in 2014 and not only was the movie a financial success, it sold even more Lego. ‡