By Venkatesh Umashankar
The study of consumer behaviour is largely to understand what makes a customer tick, be it a retail customer – buying things for ‘personal’ consumption or institutional buyers buying products and services for production purposes.
As a subject, consumer behavior has been taught in B-Schools since long and there is a well-developed corpus of research around a variety of topics spanning across the stages of the customers’ journey. This includes – how buyers perceive the need to buy; the factors affecting consumer choices, including psychological, social, emotional and situational variables; how buyers gather and process information regarding any purchase; how they come to a buy (or not to buy) decision; what happens the during post purchase phase; the different buying types and how that shapes the customer journey etc.
The key marketing tasks are two-fold – first, to identify which customer the organization should serve; and secondly, how does one serve them better than the competition. The answer to the first question is one of targeting and the second one is one of curating/customizing a value proposition that delivers upon the specific aspirations of the target customer, given a positioning gambit visualized by the marketer.
The answer to the question – why someone buys something – requires one to understand the needs, wants and value aspirations of the target group. Maslow’s ‘hierarchy of needs’ is a good place to start with to create a nuanced understanding of various types of human needs.
However, to focus on consumption-oriented needs one may want to consider that buying motives, as posited by William McGuire, could be firstly, Cognitive or Affective in nature, secondly it could be Growth versus Preservation oriented. Thirdly, a buying motive could be actively initiated or may be a representation of a consumer’s passive response to a circumstance. Finally, a consumer’s motive may be to fulfil a new internal state of mind or a manifest a new external relationship to the environment. These four dichotomies give rise to sixteen types of buying motives and provides an astute marketer the insights needed to uncover and precisely target a specific need-type or customer segment with an appropriately customised value proposition addressing a tightly focused and nuanced brand positioning.
The act of buying itself needs to be seen on a bipolar continuum anchored by low and high degree of customer involvement. Within this continuum, we can have Habitual buying behavior where customers exert least amount of effort in coming to a buying decision, followed by Limited Problem Solving and Extensive Problem Solving types of buying. This is an outcome of how ‘new’ the customer is to that product/situation or vice versa, which predicates the degree of involvement and hence the effort/time she spends in coming to a buying decision.
Then there is the phenomena of impulse buying, which is characterized as a – ‘sudden, often powerful and persistent urge to buy something immediately, with no pre-shopping intentions to buy a product category or fulfil a buying task. It is considered as a hedonically complex act, which often creates emotional conflict in the buyers. This kind of buying behavior is of great significance in retail purchase of FMCG and lifestyle goods, as research indicates that such unplanned purchasing accounts for 27 to 62 percent of all purchases in departmental stores.
Impulse buying is triggered by a variety of internal psychological factors along with external, market-related stimuli. Its antecedents include – Motives, such as hedonic versus utilitarian; Traits, such as sensation seeking, impulse buying tendency and self-identity; Consumer Resources such as time and money available; and Marketing Stimuli. Additionally, consumers’ self-control and mood states mediate and explain the affective and cognitive psychological processes associated with impulse buying.
Another aspect relevant to understanding the consumer behavior is the evaluation criteria and process used by a chosen target group to select among available alternatives. This obviously needs to be seen through the prism of consumer involvement in a given product category for a given segment.
The science around choice heuristics in consumer decision making posits rules that explain exactly the different alternative equations customers use to choose one out of many alternatives under consideration while making a purchase decision. Customers adopt either a compensatory decision making strategy or one of many non-compensatory strategies to select one amongst many product options.
In the compensatory choice strategy, the customer weighs the positive and negative attributes of the alternatives being compared, while allowing the positive attributes to compensate for the negative ones. Whereas in the non-compensatory strategy she eliminates alternatives that do not meet a particular criterion. Product category and purchase typology wise data on choice heuristics will provide insights that can really help in designing products and constructing go-to-market strategies.
Thus, based upon the above brief discussion, there are clear implications for marketers to make it an imperative to invest in in-depth consumer research on a regular basis, which can then be used by them to underpin their product-market choice and the ensuing marketing mix-decisions. Insights on customer personas that one targets and ensuing customer journeys are the critical building blocks of articulating and implementing effective and successful marketing strategies and plans.
The author is professor, director, Center for Online Learning at the Great Lakes Institute of Management, Gurgaon.