Consumer buying behaviour is the study of individuals, groups, or organizations and the processes they use 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.
Marketing success or failure of a company depends on target consumers’ individual and group reactions expressed in the form of buying patterns.
Since customer is the reason why any organization exists, it is necessary to understand the customer and study the pattern of his buying behaviour.
According to Frederick Webster- “Consumer buying behaviour is all psychological, social and physical behaviour of potential customers as they become aware of, evaluate, purchase, consume and tell other people about products and services.”
Understanding consumers’ buying behavior is one of the elements that helps in achieving marketing goals, without this understanding it makes gaining more customers difficult.
Especially in today’s competitive world. It also helps when customers will buy more from business. Their buying behavior is one of the elements which must be understood for a better view about the customer profile.
Learn about:- 1. Meaning and Definition of Consumer Buying Behaviour 2. Characteristics of Consumer Buying Behaviour 3. Importance 4. Forms 5. Factors 6. Process 7. Models 8. Influences of Personality 9. Components.
Consumer Buying Behaviour: Meaning, Definition, Characteristics, Importance, Forms, Factors, Process and Other Details
Contents:
- Meaning and Definitions of Consumer Buying Behaviour
- Characteristics of Consumer Buying Behaviour
- Importance of Consumer Buying Behaviour
- Forms of Consumer Buying Behaviour
- Factors Influencing Consumer Buying Behaviour
- Consumer Buying Behaviour Process
- Models of Consumer Buying Behaviour
- Influences of Personality on Consumer Buying Behaviour
- Components of Consumer Buying Behaviour
Consumer Buying Behaviour – Meaning and Definitions
Consumer buying behaviour is the study of individuals, groups, or organizations and the processes they use 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.
Marketing success or failure of a company depends on target consumers’ individual and group reactions expressed in the form of buying patterns. Since customer is the reason why any organization exists, it is necessary to understand the customer and study the pattern of his buying behaviour.
According to Frederick Webster- “Consumer buying behaviour is all psychological, social and physical behaviour of potential customers as they become aware of, evaluate, purchase, consume and tell other people about products and services.”
It may be viewed as an orderly process whereby the individual interacts with his environment for the purpose of making market decisions on products and services. To achieve a better understanding of the consumer behaviour, study of such disciplines like economics, sociology, psychology, and anthropology is required.
Economics explains consumer behaviour in relation to economic factors. Sociology and cultural anthropology supply explanations concerning the influences of family and group behaviour upon individual behaviour, the diffusion of new products and ideas (innovation) among various groups, and the impact of culture on its members.
Psychologists explain the motivation that underlines buying behaviour, the perceptions individuals have of themselves and the products they buy. The internal and external forces and influences interact in highly complex ways, affecting the individual’s total pattern of behaviour as well as his buying behaviour.
Consumer Buying Behaviour – Top 7 Characteristics
Following characteristics are found in their behaviour:
1. Bargaining – A trend of bargaining is often found in the behaviour of buyers. They prefer buying goods by reducing the price as told by the seller. Indian buyers too do not frame uniform price policy. The trend of bargaining is still in vogue in the Indian markets.
2. Quality vs. Price – Buyers focus on price instead of the variety of the goods. They therefore, prefer high price goods. A little bit change has come now because the consumers have now begun purchase of quality goods on higher price.
3. Brand or Trademark Consciousness – It is the characteristic of the behaviour of buyer that he appears now aware of the brand of items and considers these goods authentic and of higher quality.
4. Changing Consumption Patterns – Owing to widespread education, increase in income and standard of living as also desire of more comforts, the pattern of consumption is now being changed. The low income group and high income group are increasingly buying fridge, tape recorder, cooler, sewing machines etc.
5. Role of Women – The role of women is increasing day to day in the manner of decisions for purchase. The women do purchase of all kinds particularly in families where the husbands earn the bread.
6. Credit and Guarantee – New motives for purchase are getting their way rapidly because of having credit and guarantee facility available in the market. Such facilities are developing the trade and commerce.
7. Complaining – Buyers are gradually being aware of their rights. They have started exhibiting their complaints through media and the representations before the concerned authorities and the forums. They can lodge their complaint before consumer forum and thus, can receive the compensation against the damage/loss so sustained.
Consumer Buying Behaviour – Importance of Understanding Buyer Behaviour
Understanding consumers’ buying behavior is one of the elements that helps in achieving marketing goals, without this understanding it makes gaining more customers difficult. Especially in today’s competitive world. It also helps when customers will buy more from business. Their buying behavior is one of the elements which must be understood for a better view about the customer profile. Customers base their buying decisions on both rational and emotional reasons.
They will look at a category on a rational basis, e.g. wanting an accountants’ tax service, they then decide, especially for repeat customers on the brand. Getting customers to have an emotional attachment to a particular brand is one of the keys to keeping them loyal. As well it is one of the key factors in gaining referrals and recommendations. When businessman is looking for making a marketing strategy it makes it easier to select the best strategy when these all important aspects about the buying behavior are changed.
The following points speak out the importance of understanding buyer behaviour:
1. Customer Needs Satisfaction:
Organization should offer a marketing mix that satisfy the marketing needs. Every customer is looking for a satisfaction from a particular product or service which he is buying in exchange of certain amount of money. So buyer is always expecting something more from the supplier and hence supplier must opt for balance between ideal sale and practical aspect because ultimately every extra service provided over and above the normal practice is resulting in increase in cost of product.
Hence these factor of customer satisfaction must be cleverly handled in such a way that equally satisfies both the parties of transaction, i.e. buyer and seller.
2. Marketing Mix Development:
Customers’ response to marketing mix keeps changing. Better understanding of the factor that influence consumer helps organization development appropriate marketing mixes.
Audio CD market was very huge in India before a decade, but now, it have almost vanished like a thin air. Now many web sites have facility of listening latest songs as well as all types, genres of songs on line free of cost, so no single buyer will buy expensive audio CD’s except for some exceptions.
But general trend is important which is now rapidly declining audio CDs and moving to a new world of online music experience. Even latest TV shows and Movies are widely watched over the internet either on you tube or some other live streaming web sites. Hence before developing marketing mix thorough study must be made regarding latest updates in market.
3. New Market Opportunities:
Unsatisfied needs motivate customer to buy. By understanding buyer behavior, marketing can locate new market opportunities. Now, anyone having an internet connection can purchase any product from rupees 5 to rupees 5 lack in less than 5 minutes. So failure of local dealer in providing required service often motivate customer to look for different avenues which are very easily available.
Customer now analyze specifications, quality, and cost of product before purchasing a product. If he is unsatisfied with one seller then thousands of other seller selling same product are ready at his doorstep to fulfill his buying needs.
4. Target Market Selection:
Behavior is an importance variable for market segmentation. By understanding buyer behavior organization can effectively segment the market.
5. Efficient Resource Use:
By understanding buyer behavior organization can make efficient use of marketing resource. They can focus their marketing efforts in meaningful way so as to perform various marketing duties from overall management process with greater efficiency. If seller exactly knows the customer requirements his resources will be saved in greater extent than without knowing customer behavior and his tendency of purchasing.
Resource allocation and saving is a different topic of study but is relevant in this area where buyer behavior decides most of the sale. With the understanding of his buying pattern, resources can be effectively utilized.
It will be a self-destructive initiative for a business organization to neglect buyer behavior in deciding marketing mix for its product. Importance of buying behavior is thus beyond negligence.
Consumer Buying Behaviour – 4 Forms of Buying Behaviour
Four forms of purchasing or buying behaviour are normally observable among consumers:
1. Complex
2. Dissonance reducing
3. Habitual
Form # 1. Complex Behaviour:
This behaviour occurs when customers get very much involved in the purchase, and acquaint themselves with brands and quality differences.
This behaviour normally occurs in three steps:
(i) Firstly, the buyer develops beliefs about the product.
(ii) Secondly, attitudes or willingness to accept get developed in the buyer.
(iii) Thirdly a well thought out choice is made.
This applies to costly products about which not much is known to the consumer in the early stages. This is probable when a person wants to buy a PC or a Laptop. There are too many product features to consider and compare, especially if the buyer is unfamiliar with computers and their peripherals.
Marketers must quickly grasp the fact that the customer is getting highly involved.
They must try to:
(i) Support the buyer in his/her information gathering,
(ii) Support customer in the assessment actions by providing complete information on comparing product features,
(iii) Highlighting product benefits,
(iv) Promoting the firm’s reputation and
(v) Try to influence the buyer through mutual friends, previous buyer.
Retailers of products in which high involvement is normal, must understand consumer education, and the manner in which he/she gathers information on the product. Strategies to assist the buyer in helping him/her to learn about product attributes and their relative importance, and the way in which the firm’s brand fulfils the consumer’s requirements will be needed.
In such cases, personal meetings with the buyer, print media presented in a simple form, and regular projection of benefits will have to be adopted by the retailer.
Form # 2. Dissonance Reducing Behaviour:
Sometimes, in spite of high involvement, the buyer may find it difficult to differentiate between brands.
High involvement occurs when the product to be purchased is:
(i) Costly,
(ii) Needed infrequently, and
(iii) The purchase is viewed as a high risk.
The buyer will go around to collect data, but on not making much of headway with comprehending the data, will decide quite hastily based on price or customer convenience. In other words, the customer does not know much about product category.
After the purchase, the customer may experience some regret, on realizing more about the product, and its weak spots. He/she might hear about the comparative advantages of other brands. This regret is also known as ‘dissonance’, which may develop new beliefs and attitudes among customers.
If there is too much of regret, then beliefs, contrary to those earlier, may appear in the customer. Retailers have to make customers stick to their brands, and must take precautions (or dissonance reducing steps) to make sure that the information they supply will not result in a change of beliefs.
I bought an assembled computer some time ago, after prolonged discussion with friends and sellers. The decision to buy was made primarily on the basis of costs, since I was unaware of technical details. A few months later, I realized that maintaining the computer became a problem. I am now determined that I will never buy or support the purchase of an assembled computer. I am also annoyed with the salesman who sold it to me.
Form # 3. Habitual Behaviour:
For many products, we never think and apply our minds while making purchases. The best example is groceries. We have fixed brands, tried and accepted through years of purchasing experience. When we buy now we rarely get involved, and we pick the same brand from habit.
It is now known from research that the habit and low involvement emerges out of low cost and frequent purchasing. The decision sequence of belief, attitude and behaviour is avoided in such cases. Nor is extensive information seeking followed.
There are mistaken views of this type of behaviour that this is a form of brand loyalty. Brand loyalty emerges from considerable thinking and analysis of product features, which is in fact high involvement. In the case depicted above, the involvement is rather low. It is a sort of habit, which is dominant. The buying is quick and passive. The buying behaviour first starts from brand beliefs and passive learning.
Retailers use low price and promotion to create such low involvement habits. TV advertisements are very effective devices. The ‘Pizza Hut’ or ‘Lux Toilet Soap’ are common examples.
Experienced retailers have four strategies for attempting to convert low involvement products into one of high involvement:
(i) The first is to try to link the product to some involving issue. Some examples are a number of toothpastes with gum protection, a cooking oil brand with reducing cholesterol, and a detergent with complete removal of food stains.
(ii) The second strategy is to link the product to a personal issue or situation, like a cup of a certain tea with removing stress and tiredness after a session of hard work. Another example is a cream for removing backaches.
(iii) The third is often used in India. This refers to using advertisements to evoke strong emotions, like a deodorant, which attracts a long line of girls like the pied piper, or the capacity of a clothes washer to be ‘magical’ in washing stains from clothes.
(iv) The fourth is a well-used strategy, to add features to a normal good. An example is the ability to clean clothes (normal), and also soften the surface (added).
Form # 4. Variety Seeking Behaviour:
There are some products in which involvement during buying is very low, but they become significant later, during or after initial consumption. Some examples are condiments. We might shift from Bedekar to Priya to Mother’s pickles just because we need a change of taste once in a while. Or a consumer may shift toothpastes frequently for not very significant reasons. The customer is probably seeking variety.
The strategies depicted by different retailers are- reminder advertising, or significant presence on shelves, or stealing customers by price reduction or projecting special and new qualities of competing products.
Compaq Computers, a multi-national hardware firm, captured the market by drastically reducing prices, and maintaining a low price level for two years. Reducing commissions to the very minimum possible created the low prices. When they had more than 50% of the country’s market they reverted to normal prices.
The problem is that a retailer has to keep a close watch on the early behaviour of the customer to classify or categorize him/her. Once categorized, the dealing with the customer has to be according to strategies of a standard kind, derived from experience. The customer can depict complex, dissonance reducing, variety seeking and habitual behaviour.
Most groceries have very little brand differences and are bought with little involvement. Personal clothing demands some involvement, but can become habitual. The costly product will require involvement, and the buying is very carefully considered. Variety seeking is normally indicative of low involvement.
Consumer Buying Behaviour – Factors Influencing: Personal, Social, Culture and Psychological Factors (With Examples)
Buying behaviour is a process. Potential customers are subjected to various stimuli. The customer is regarded as a black box as we cannot see what is going on in his mind. He responds to the stimuli or inputs and may purchase some product or service of interest to the marketing management. The model of buyer behaviour is stimulus-response model. Response may be decision to purchase or not to purchase.
Under the systems view of buyer behaviour, we have- 1. Inputs, 2. Processing, 3. Outputs, 4. Feedback loop. The objective of the process is, of course, expected satisfaction or service.
Inputs include buying power, marketing mix and other factors. Buying power is the ability to participate in the exchange activity. Marketing mix is the marketing effort in product, price, promotion and distribution appeals. Promotion appeals are through advertising, salesmen, reference groups and sales promotion.
Other inputs are- intra-personal influences, inter-personal influences and other environmental factors. Intra-personal influences are reflected in motivation, perception, learning, attitudes and personality of buyers. Inter-personal influences are represented by family, social class, reference groups and culture. Other environmental influences are general economic conditions, pending legislation, fashion trends, and technological advances.
Outputs are buyer’s attitudes, opinions, feelings, and preferences as affected by buying process and buyer’s actions such as patronage, brand or store loyalty, positive or negative influences upon other potential buyers. Purchasing responses are- choice of product, brand, dealer, quantities, etc.
Consumer behaviour analysis is useful in estimating the potential size of a market, in market segmentation, in locating preferred trends in product development, in finding out attributes of alternative communication methods and in formulating the most favoured marketing mix to secure favourable buyer’s response in purchase and repurchase of products.
1. Personal Factors:
The behaviour of consumers is also influenced by personal characteristics such as:
i. The buyer’s age,
ii. Occupation,
iii. Economic situation,
iv. Lifestyle,
v. Personality, and
vi. Self-concept.
i. Age:
People change the goods and services that they buy over their lifetime. Tastes in food, clothes, furniture, and recreation are often age related. Young people generally go after trendy motor cycles, expensive watches, branded shirts, designer sunglasses, sports shoes, etc.
ii. Occupation:
A person’s occupation affects the goods and services bought. Blue-collar workers tend to buy more rugged work clothes, whereas white-collar workers buy more business suits. Marketers try to identify the occupational groups that have an above-average interest in their products and services. A company can even specialize in making products needed by a given occupational group. Thus, computer software companies will design different products for brand managers, accountants, engineers, lawyers, and doctors.
iii. Economic Situation:
A person’s economic situation will affect his or her product choice. The availability of easy credit, for example, has prompted many consumers to buy homes, expensive cars, white goods, etc. Marketers of income-sensitive goods generally pay close attention to trends in personal income, savings, and interest rates. If economic indicators point to a recession, marketers can take steps to redesign, reposition, and re-price their products—all in sync with the market signals.
iv. Lifestyle:
Lifestyle is the pattern of living that is often expressed in a person’s activities, interests, and opinions. A company may choose to target a particular lifestyle group—such as college students—with a particular product offering— such as – blue jeans—and use advertising that is in sync with the values and beliefs of this group. For example, Airtel used the tagline ‘Har Friend Zaroori Hai Yaar’ trying to woo the youth of today.
v. Personality:
Each person’s distinct personality influences his or her buying behaviour. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment. Personality is usually described in terms of traits such as – self-confidence, sociability, defensiveness, adaptability, etc.
Personality can be useful in analyzing consumer behaviour for certain products or brand choices. For example, coffee marketers have discovered that heavy coffee drinkers tend to be high on sociability Thus, to attract customers, Starbucks and other coffeehouses create environments in which people can relax and socialize over a cup of steaming coffee.
vi. Self-Concept:
We generally buy goods and services that best reflect our self-image. Marketers of passenger cars, motor cycles, branded clothing, leather products, jewellery, etc., use the concept of the self to good advantage.
2. Social Factors:
Man is a social animal. His behaviour is greatly influenced by peers, relatives, neighbours, and friends. Often a product fails or succeeds in the marketplace due to the influence exercised by these people. These groups exercise a strong influence on the lifestyles and buying patterns of the members. The importance of group influence varies across products and brands. It tends to be strongest when the product is visible to others whom the buyer respects.
Manufacturers of products and brands subjected to strong group influence must figure out how to reach opinion leaders—people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert influence on others. Many marketers try to identify opinion leaders for their products and then direct their marketing efforts toward them. In other cases, advertisements can simulate opinion leadership, thereby reducing the need for consumers to seek advice from others.
Purchases of products that are bought and used privately are not much affected by group influences because neither the product nor the brand will be noticed by others. Family members can strongly influence buyer behaviour. The family is found to be the most important buying organization in society, and it has been researched extensively. Marketers are interested in the roles and influence of the husband, wife, and children on the purchase of different products and services.
Husband-wife involvement varies widely by product category. Of course, buying roles change with evolving consumer lifestyles. Children may also have a strong influence on family buying decisions such as – buying a car. In the case of expensive products and services, husbands, and wives often make joint decisions—such as – buying a home.
3. Cultural Factors:
These factors include social heritage of the society. Every consumer’s beliefs, morals, laws, customs traditions, habits etc., form part of the cultural factors. MNCs must, understand the cultural factor before setting up base in any country. For example, Mc Donnels cannot afford to sell beef burger in India.
The Indian Culture as It Stands Today:
The Indian society is known to follow conformity to traditions, spiritualism, respect for elders, education etc., but following change has been experienced in the recent past –
i. Women have joined work force in a big way.
ii. This has led to increased use of luxury and time saving gadgets etc.
iii. Health and fitness consciousness has been observed, which has led to large number of gym and fitness chains.
iv. There has been a shift from spiritualism to materialism and back to spiritualism and yoga.
v. There are more nuclear families than joint families.
4. Psychological Factors:
A person’s buying choices are further influenced by four major psychological factors:
i. Motivation,
ii. Perception,
iii. Learning, and
iv. Beliefs and attitudes.
i. Motivation:
A person has many needs at a given point of time. Some are biological needs—which compel a person to buy water, bread, biscuits, etc., to reduce discomfort arising out of hunger. Others are psychological needs—arising out of a need for recognition, respect from others, belongingness, etc. Psychologists have proposed a number of theories outlining human behaviour conditioned by powerful needs that compel a person to take appropriate actions almost immediately.
A person has many needs at any given time. According to Abraham Maslow, a person’s needs may be arranged according to a hierarchy— physiological, social, love, esteem and self-actualization needs—from the most pressing to the least pressing. A person tries to satisfy the most important need first. When that need is satisfied, it will stop being a motivator and the person will then try to satisfy the next most important need.
For example, starving people (physiological need) will not take an interest in the latest happenings in the art world (self-actualization needs), nor in how they are seen or esteemed by others (social or esteem needs), nor even in whether they are breathing clean air (safety needs). But as each important need is satisfied, the next most important need will come into play.
ii. Perception:
Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world. People can form different perceptions of the same stimulus because of three perceptual processes – selective attention, selective distortion, and selective retention. People are exposed to a great amount of stimuli every day.
For example, the average person may be exposed to more than 1,500 advertisements in a single day. It is impossible for a person to pay attention to all these stimuli. Selective attention—the tendency for people to screen out most of the information to which they are exposed—means that marketers have to work especially hard to attract the consumer’s attention.
iii. Learning:
When people act, they learn. Learning describes the changes in an individual’s behaviour arising from experience. Learning theorists say that most human behaviour is learned. An individual learns from past experiences that unbranded items do not last longer and so, decides to go after only branded goods. He may, therefore, decide to buy a Parker pen instead of a pen manufactured by local producers.
iv. Beliefs and Attitudes:
By way of doing and learning, people acquire beliefs and attitudes. These, in turn, influence their buying behaviour. A belief is a descriptive thought that a person has about something. Buying behaviour differs greatly for a tube of toothpaste, a tennis racket, an expensive camera, and a new car. Marketers have to take care of the beliefs and attitudes of customers toward products and put everything in place while trying to deliver value/satisfaction to their customers.
Consumer Buying Behaviour – 5 Steps Involved in Consumer Buying Process
Buyer behaviour involves a mental process as well as physical activity. The buying behavior and purchase decisions need to be studied thoroughly to understand, predict and analyse critical market variations. Buyer is a riddle, highly complex entity want to satisfy his innumerable needs and desires.
The five steps involved in consumer buying process are described briefly:
Step # 1. Problem Recognition:
Problem recognition results when a buyer recognizes a difference of sufficient magnitude between perceived benefits and actual benefits derived from a product or service. The buying process starts when the buyer recognizes a problem or need. The consumer began to feel a problem in the form of a certain need or desire.
The needs can be triggered either by internal stimuli like hunger, thirst etc., or by external stimulus generally referred to as a sign or cue. Depending on the intensity of the want, the person will try to fulfill the unsatisfied want.
Step # 2. Information Search:
Information is to know about a service, attributes of service, prices, and stores and so on. Search may be categorized in four categories- pre-purchase, ongoing, internal and external. An aroused buyer may or may not search for more information. If the buyers derive is strong and the desired service to satisfy the need is easily available then he or she may not search for more information.
The extent of search activity depends upon the strength of derive, the amount of information buyer already have, the ability to obtain additional information, the importance or value given to gathering additional information and the satisfaction buyers gets from information search. Buyers engage in both internal and external information search. Internal search involves the buyer identifying alternatives from his or her memory. For certain low involvement services, it is very important that marketing programs achieve “top of mind” awareness.
For high involvement services, buyers are more likely to use an external search. A compensatory decision involves the buyers “trading off” good and bad attributes of a service. The amount of fort a buyer puts into searching depends on a number of factors such as the market, number of competitors, differences between brands, service characteristics, important of services and situational characteristics.
Step # 3. Evaluation of Alternatives:
Evaluation involves those activities undertaken by the buyer to compare alternatives carefully on the basis of certain criteria, alternative solutions to market related problems etc. The marketers are interested in knowing how the buyer processes information to arrive at brand choice. There is no single evaluation process used by the buyers or even one consumer in all purchase decisions.
Categories of Evaluation of Alternatives in Product/Services:
The first concept is we assume buyers views a product/service based on certain attributes.
Second concept is the buyer likely to have a predetermined notion or a set of brand beliefs about where each brand stands on each attributes. The marketers must not conclude that the salient attributes are the most important ones. Some of them may be salient because the buyer has just been exposed to a commercial message mentioning them or has had a problem involving them, hence making these attributes “top of the mind”. Furthermore, non-salient attributes might include some that the buyer forgot, but their importance would be recognized when mentioned.
Third, the buyer is likely to develop a set of brand beliefs about where each brand stands or each attribute. The set belief held about a particular brand is known as the brand image.
Fourth, the “buyer is assumed to have a utility function for each attribute. The utility function describes how the buyer expects service satisfaction to vary with different levels of each attributes.
Fifth, the consumer arrives at attitude (judgment, preferences) towards the brand alternatives through some evaluation procedures.
Buyers have been found to apply different evaluation procedures to make a choice among multi- attribute objects. Some alternative decision process used by buyers to evaluate alternatives are- Expectancy model, Ideal brand model, Conjunctive model, Disjunctive model, Lexicographic model, Determinance model etc.
Step # 4. Purchase Decisions:
Purchase decision is a consumer commitment for a product. It is the terminal stage in the buying decision process that completes a transaction. In case a consumer is buying a product for the first time, then from the behavioural view point it may be regarded as a trial. The consumer will repeat the purchase only where he is satisfied with its performance.
Actual purchasing process of buyer seeking to build a better understanding of how buyers make their purchases. In the decision evaluation stage, the consumer forms preferences among the brands in the choice set. The consumer may also form a purchase intention and lean towards buying the most preferred brand. However factors can intervene between the purchase intention and the purchase decision.
There are certain factors which may come in the way of his/her purchase intention and purchase decision:
(a) The attitude of others – By other we mean people who are close to the buyer and their reaction or attitude towards the purchase intention of the prospect.
(b) The unanticipated situational factors – These factors may influence the purchase intention such as transfer to another place, priority given to another purchase etc. The more intense the other person negativism and the closer the other person are to the policyholder, the more the consumer will revise downward his/her purchase intention. The purchase intention is also influenced by unanticipated situational factors. The buyer forms a purchase intention on the basis of such factors as expected family income, expected benefits from the service.
When the buyer is about to act, unanticipated situational factors may erupt to change the purchase intention. Thus preferences and even purchase intentions are completely reliable predictions of purchase behaviour. Many purchases involve certain risks taking. A buyer develops certain routines for reducing risk such as decision avoidance, information gathering from friends and preferences for national brand names and warranties.
A buyer who decides to execute a purchase intention will be making up to five purchase decisions- brand decision, vendor decision, quantity decision, timing decision and payment-method decision.
Step # 5. Post Purchase Behaviour:
It refers to the behaviour of a consumer after the purchase and use of products; it originates out of consumer experience regarding the use of the product and is indicated in terms of satisfaction. This behaviour is reflected in repeat purchases or discontinuation from further purchase. If product use experience indicates satisfaction, they repeat purchases will occur, otherwise not.
Once the buyer makes a decision to purchase a product or service there can be several types of additional behaviour associated with that decision such as decisions on service uses and decision on services related to the item purchased. The marketer’s job continues even after the service is bought especially since he has to learn a lot from the post purchase behaviour undertaken by the buyer. This will be indicative of whether the buyer is experiencing post purchase satisfaction or not.
Post Purchase satisfaction- The level of satisfaction experienced by the buyer after his purchase will depend on the relationship between his expectations about the service and performance of the service. After purchase of a service a buyer may detect a few. Some buyers will not want the flawed services whereas others will be indifferent to the flaw and some may even see the flaw as increased cost of the service. The buyers post purchase actions will provide necessary feedback to the marketers as to whether he/she is satisfied or dissatisfied with the product or service acquired.
A satisfied buyer will act as an informal word of mouth for the firm whereas a dissatisfied buyer will react in an entirely different manner.
Post purchase action- The satisfaction or dissatisfaction with the service will determine subsequent performance of the service in the market. If the buyer is satisfied then he will exhibit a higher probability of repeat purchase of the service. The satisfied buyer will also tend to say good words about the service. Whereas a highly dissatisfied buyer will not buy the service again and spread negative words about service and company.
Consumer Buying Behaviour – Top 5 Models
The seller was able by virtue of his experience with the buyer behaviour during old days. However, owing to rapid growth of population and countless things in the market, it has now become difficult to know the buyer behaviour.
Several data and the theories pertaining to behaviour are therefore, resorted and it requires time and money both. It is easy to know that when, how, what and where from the buyer does purchase but why does he buy is difficult to know. Different models or theories have been developed so as to know the motive of buyer for any particular item.
Some important models are as under:
1. Economic Model:
A renowned economist Marshall has propounded this model. It presumes that man is an economic and rational person and does act under self-motive. He wants maximum satisfaction by putting at stake his minimum means. He therefore, wants to buy in competitive price, such item easy to operate, durable, beautiful, well designed and of good quality.
A number of items exist before a man and he has to select one or several items out of them. Hence, solution of problem through rational approach is expected. This principle is based on – (i) A man does efforts to gain more satisfaction from the limited means (ii) He is known to the optional sources and – (iii) He does expenses rationally.
The sellers have not recognised this principle. As per their opinion, it is based on imaginations and does not describe broadly the buyer behaviour. However, this principle has not lost of significance. Industrial buyers always follow this principle.
Secondly, this model or principle is normative and not descriptive at all. It explains that – (i) Sale will increase in proportion to the price is reduced, (ii) Reduction in the price of substitutes will sub-due the price of goods proportionately, (iii) It will be considered that along with increase in real income, the sale of concerned good will enhance provided that the item is not of inferior quality and (iv) Sale will rise with the efforts of promotion made for the same.
However, the quantum of sale is not affected merely by the economic elements. This principle does not tell about priority of the items and their brands. Further, the habits of consumer, his tendencies, thinking etc., has no place in this principle. It is therefore, said that this principle is appropriate only for a particular field and it has no application for all other fields alike.
2. Learning Model:
This principle is based on psychology and Pavlovian, a Russian Psychologist had laid down it. It is based on the concept that human behaviour at the most is influenced by the learning. Pavlovian has explained this model after experiments made on a dog.
He used to call his dog by switching on a bell while offering food. A long practice had made thorough change in the habit of dog and he would come with ringing of a bell irrespective of food given or not. Subsequently, this very experiment was made on other animals and ultimately, man was chosen for it. Stimulus response model was then developed and represented.
This model is based on four concepts:
(i) Motive – It is called necessity or motive. It rises from within and inspires to act.
(ii) Stimulus is meant by those weak passions that rise from within or from the atmosphere and build when, why, and where.
(iii) Response is meant by the human reaction against the stimulus. This reaction does not find uniform in a man always and these are felt on the basis of his previous experience.
(iv) Re-Stimulus – If the response is proper, a trend of repetition found when the same stimulus is appeared. For example, housewives buy each time the same brand of tea leaves until their stimulus changes.
This principle is not perfect in itself but lucrative when applied in the marketing. It explains the necessity of quality in goods so that stimulus as to re-buy the brand is retained.
3. Psychoanalytic Model:
This principle is also based on psychology and propounded by Fried. He says that every child comes in the world with certain natural necessities. For example, passion for copulation. If he cannot satiate his passion and begins to consider himself alone in the world but still he depends on the world.
He develops other means for the satisfaction of his needs but puts a check on his motives owing to guilty conscious and shame so that, nothing could happen wrong to the social assumptions. However, the basic needs still remain within him. This friction and fatigue makes his behaviour more complex. Owing to these stimulus, a man sometimes do an eccentric behave but he himself even remains unknown to the reason for such behaviour.
This theory or model of Fried has been slightly modified by his followers and cultural as also bio conscious was added with it. Thus, a man comes in the world not only to meet sex related needs but several other basic needs also. Power, being sovereign, safety etc., are the main needs out of them.
This principle is an important principle for marketing. It tells that the real motives of man inspires him for buying an item and from a particular shop. Motive can render good concepts for exploration, advertisement and packaging.
The appeals based on fear, dreams and hopes can be utilised in the form of purchase appeals.
4. Socio-Psychological Model:
This model is based on socio-psychology and propounded by Weblon. He says that a major part of economic consumption does not inspire from usual necessities or satisfactions and it is motivated by the honour in society as man is the social being. His necessities and behaviour are changed according to the existing members in a group.
Weblon says that a section of society prefers comfort and this class is followed by others. For example, if a neighbour buys a T.V., his next dweller also buys the same however after some days.
This model is important when we analyse it from the angle of marketing. It tells that the culture, sub-culture, and section of society and a particular community have a great influence on human beings. In order to frame a proper programme for marketing, it is must for a seller to know the demand effective levels of society for the concerned items.
5. Organizational Model:
This model rests on organization and propounded by Hobbes. It is therefore, called an organisational model of Hobbes. The buyer of an organization does not buy the item for his use but for re-production or distribution and seldom buy beyond their organization.
There are two concepts in vogue about the manner of decision making by the buyers-(i) Some sellers buy the best item under influence of the cost, type, service and quality on the basis of their rational motive. While, (ii) Certain sellers buy the items on the basis of their personal motive.
Such buyer actually makes purchase under both influences. He says that a man is naturally proceeds to maintain his interests and for increasing the same. However, this trend may wage a war resulting enmity of a man with another. Every person joins others due to the fear of such war and looks after the interests of his own and that of the organization.
This model actually works on the basis of rational selection while sending goods, rendering service, fixing price etc. Personal motives are given less importance in it.
Consumer Buying Behaviour – Influences of Personality on Consumer Buying Behaviour (With Traits)
Marketers are interested in knowing how personality can influence consumption behaviour. Availability of this information will enable them to go for suitable market segmentation and then target these consumers with appropriate communication programmes. There are certain specific personality traits which influence consumer acceptance of new products and services.
Especially while trying to analyse the likely market response for new innovations, marketers are interested in knowing the personality traits which can be useful in differentiating between consumer innovators and non-innovators.
Schiffman and Kanuk have referred to the personality behaviour as:
1. Consumer Innovativeness:
Innovation always has an element of risk, because will be easy accepters of the new products and services only if both the marketers and consumers are to equally gain from the right innovation. Consumer researchers have developed various measurement instruments to understand the level of consumer innovativeness, specifically the personality trait which provide insights into the nature and boundaries of a consumer’: willingness to innovate.
Recent researches have indicated about the positive relationship that exist between purchasers of online products and the innovative use of the internet. The personality of internet users can be described as people who are confident about themselves and in their ability to control their own future and in using the internet to seek out information, enjoy change and are not afraid of uncertainty.
2. Dogmatism:
Dogmatism is the personality trait which will indicate the degree of rigidity individuals display when confronted with something which is unfamiliar to them or towards information which is contrary to their own established beliefs.
The person who is high on dogmatism will approach the unfamiliar defensively and decide on the worthiness of the products or services. On the other hand, those who are low on dogmatism will willingly consider unfamiliar or opposing beliefs.
Consumers with low dogmatism (open minded) display more acceptance of innovative products than to established or traditional alternatives. Whereas, highly dogmatic (close-minded) consumers display preference for established rather than innovative product alternatives.
3. Optimum Stimulation Level:
Consumer researchers have examined the relationship between personality traits and differences in the stimulation which, in turn, may be related to consumer behaviour. Researches have indicated high optimum stimulation levels (OSLS) with consumers who display more willingness to take risks, try new products, be innovative etc.
It is also suggested OSL reflects a person’s desire for the level of lifestyle stimulation. Accordingly, if consumer’s actual lifestyles are equivalent to their OSL scores, then they are likely to be quite satisfied. Whereas if their OSL is more than their current reality, they are likely to be restless or bored, while if their (lifestyles) or OSL is below their current reality, they are likely to seek relief.
This conveys that consumers will make their choice of products or services depending on the OSL. An over stimulated person is likely to seek for rest in a quiet, isolated place or holiday (Examples can be of various Resorts/Vacation halts etc. which seem to be invitations for over stimulated persons).
For instance, S Kumar’s Nation Wide (SKNL) has used cine star Sushmita Sen to endorse its new brand Carmichael House. This brand offers total solutions in the home textile segment including bed linen, table linen, kitchen linen, curtains and upholstery.
The brand offers unique and latest trends for the home and the personality of the brand endorser (Sushmita Sen.) as an icon, stands for international styling. Research had indicated that women, who will be the primary market segment look up to her on style issues. While men, who comprise the secondary audience admire her style. Thus, the brand is trying to appeal to customers whose lifestyles will match their OSL scores.
4. Variety or Novelty Seeking:
As the term itself indicates there are certain types of customers seeking variety or novelty in their consumption behaviour.
This variety seeking behaviour can be:
i. Exploratory purchase behaviour (exploring newer brands).
ii. Vicarious exploration (consumer obtains information about new alternatives and contemplates about the new option) with caution and reservation.
iii. Use innovativeness (Already using a product in a new or novel way)
The use innovativeness trait is more relevant to products which are technological or electronic products such as home appliances (home stereo system, washing machine etc.) In case of such products there could be certain product models with additional functions or features while some other models with only the essential features.
Consumers who are high on variety seeking are more likely to be attracted to product brands which offer novel features or have multiple applications, unlike consumers who score low on variety seeking, who may not do so.
5. Social Character:
The personality trait depicting social character is closely related to socio-cultural environment or sociological research. Here the reference is of two types of personality traits -inner directedness (consumers who rely on their ‘own’ intuition or standards or values while evaluating new products) and other directedness (These are consumers who look to others for directions or guidance, especially in case of new products). The former category of consumers are more likely to be innovators.
The inner-directed consumers have a preference for ads which stress product features and personal benefits thus enabling them to self-evaluate and use the product in an innovative or novel way. Whereas, other directed people prefer ads which convey social acceptance and this can influence their purchase decisions.
One must have come across people who seek to be unique. Such people do not like to be in conformity to other’s expectations or standards either in appearance or in terms of possessions. In a study undertaken to explore the circumstances under which persons who are high on the Need For Uniqueness make (or do not make) unconventional choices, it was revealed that these individuals were more open to making unique choices when they were not concerned about being criticized. So, it would help marketers to carry out researches to measure this trait in the context of consumer behaviour, while introducing new products in the market.
Thus having knowledge of various personality traits and differences is essential for the marketer to design suitable market segmentation and other promotional strategies for their product or service.
Consumer researchers are also keen to understand the role played by cognitive personality factors in influencing various aspects of consumer behaviour. Here the discussion will be related to two cognitive personality traits.
i. Visualizers versus Verbalizers
ii. Need for cognition.
i. Visualizers vs Verbalizers:
Cognitive personality researchers have classified consumers into visualizers and verbalizers. Visualizers – who stress cm the visual information and visual products, for example membership of a CD/DVD cassette shop. Verbalizers – are those (consumers) who prefer verbal information on products.
For example membership in books or magazines shop. The privilege card issued by Sapna Book House (Bangalore) is a written information. Thus marketers try to attract their target market by categorising them as above.
The ad (A) Cancer patients aid association speaks on a unique and refreshing way of looking at it for smokers. In ad (B) for The Indian Association for promotion of Adoption and Child Welfare the transparent sheet in the middle with the child’s picture was conveying about how changing some one’s life could be as easy as turning a page. Both these ads communicate a lot visually and makes one think hard as the truth jolts you.
In case of the Cadbury Dairy Milk, it works as a verbalizer because the central idea of the ad revolved around ‘Celebrate the joy of Pappu passing the exams with a Dairy Milk. This message was further, appropriated at the precise moment when Pappu passed and he was given a congratulatory message from Cadbury Dairy Milk. In fact, this message was flashed out 39 million times in a span of three months and was also well received by the target audience.
ii. Need for Cognition:
Need for cognition (NC) is another cognitive personality characteristic which is related to the individual’s thinking process and measures a person’s craving for something. The information on consumers’ need for cognition will enable the advertiser to decide on the creation of advertising messages with the right combination of colour mix.
Researches have shown that consumers who are high on the ‘need for cognition’ will be more receptive to an ad giving, such rich product related information. While those consumers seeking less need for cognition will be more attracted to the peripheral background or model or the celebrity endorsing the product in the advertisement.
Long back the ad of Maruti 1000 cc car had evoked some strange and yet irresistible attraction, echoes of which linger in the haunting melody of Monalisa. The ad had shown a car with a celestial aura with a heading “The lady with the mystic smile”. This ad is an example of an appeal to those consumers who are less on the need for cognition.
A similar intriguing charm was built up in the series of ads for the ‘Taj’ group of hotels and is an example of an ad which will appeal to consumers who are high on need for cognition. The setting of the ad (both in print as well as on television) takes the form of a lady moving about ethereally and purposefully in a grand manner.
When the commercial was first revealed it had an element of mystery evolved around it with the viewer puzzled as to what the advertiser had in mind. The voice over could be heard saying things like. “She plays a host to celebrities. She receives you just as graciously. She is not your business manager, your secretary, your this and that but she values efficiency”.
The puzzle is solved when it is announced “She is the Taj”, she runs luxury hotels that has epitomize, elegance and a whole lot virtues. The closing line says “Nobody cares so much”.
Sony Entertainment Television (SET) had before the launch of its popular serial ‘Jassi Jaissi Koi Nahin’ tried to create hype and a need for cognition among the target audience about its launch.
The primary objective was to fuel curiosity about Jassi and build endearment for her as a character by giving the TV viewers different facets of personality -all without revealing her. During the pre-launch period of Jassi, the consumers (audience) were fed pieces of (bits of) information on Jassi’s persona even allowing the viewer to create a personal image such that this character (Jassi) sounded real and identifiable.
The campaign messages and various elements were used so as to fuel the curiosity around and after the launch. The media mix included host of unconventional media vehicles such as sms, flash mobs, airport placards, leaflets designed specially for traffic junctions, shop trains etc., apart from the conventional T.V radio, outdoor and print media. At the media launch, SET presented the entire cast of the show (except Jassi) further increasing the curiosity and intrigue among the media.
The communication strategy started with building attributes which personified Jassi. The next step involved anonymous people talking about Jassi, then the campaign moved on to characters from the show talking about Jassi (her parents, her boss and her peers) in their inimitable ways.
Once sufficient momentum was generated and the initial feedback from critics, media and viewers was very positive, the next place of communication the Shaher Shaher Mein Charcha campaign was launched, which had people from all walks of life voicing their opinion about Jassi. This move continued to fuel the buzz on T.V and billboards, when the channel embarked on another unusual activity-it created a Jassis Pals Club.
The purpose of the club was to help in the creation of a community of Jassi fans who would become apostles and advocates for the show. Simultaneously Jassi merchandise was now being made available- the first in a series of items to be launched was the ring tone download.
All the efforts and initiatives were taken by the channel to maintain the interest, of the audience and build viewer affinity to Jassi and the show. In the final place, since Jassi had been kept hidden all the while, it was decided that the time was right to get the viewers interact with the Jassi character and further drive up the connect and emphathy.
All efforts had been made up to build up the consumers’ (audience) need cognition around Jassi. Finally, the channel took Jassi to Delhi where she became the talk of the town. She was interviewed live in the studios of Aaj Tak and the FM. There was a lot of excitement on seeing her, which is similar to that reserved for film personalities.
In fact, what started as a buzz turned into a roar, with the Jassimania taking the country by storm. The serial went on to command very high TPR ratings during the primary viewing time, winning many T.V awards and was even hailed by all (media, critics and audiences) as the new refreshing and popular face of Indian Television.
Certain Inter-Related Consumption and Possession Personality Traits:
Consumer researchers have identified certain consumption and possession traits which influence consumer behaviour.
They are as follows:
i. Consumer Materialism:
‘Materialism’ refers to the attachment people have towards (material) possessions. When considering materialism as a personality like trait, it differentiates between person’s who identify themselves and others on the basis of the material goods possessed by them As against this there are certain people for whom possession of material goods is secondary.
Researchers have made the following characteristic observation about materialistic people:
1. They give undue importance to acquiring and displaying their worldly possessions.
2. They crave for possessing ‘lots of things’.
3. They are usually self-centered and selfish.
4. They like to possess things irrespective of whether they derive greater happiness or satisfaction from possessing the same.
ii. Fixated Consumption Behaviour:
Lying between being materialistic and addictive regarding buying or possessing objects is the fixated consumption behaviour. Fixated consumers not only are interested in purchasing objects or things but also enjoy displaying them and are known for their involvement with others who share a similar interest.
The characteristics profile of fixated consumers are as follows:
1. A very deep interest displayed for a particular object or a product category.
2. A dedicated search for additional examples of the object or the particular product category.
3. Willingness to spend a considerable amount of their discretionary time and money in searching for the product or object.
Under this category, we can put the various people who are vigorously involved in collecting (or have a hobby) various objects like stamps, coins, antique articles etc. These fixated consumers become totally involved in the process of acquiring the object.
iii. Compulsive Consumption Behaviour:
Compulsive consumption is abnormal behaviour. Consumers who display this type of behaviour are sometimes said to be having abnormal behaviour. Their compulsive actions reveal an addiction, whereby their actions are out of control and could result in causing harm to themselves or to those around them.
Some of the problems associated with this type of behaviour are: uncontrollable consumption of liquor, gambling, drug addiction and so on. Such problems can be handled by going for clinical therapy treatment.
Some research studies have indicated that certain actions such as self-gifting, impulse buying etc. are compulsive actions adopted by few consumers to manage their moods, which may indicate “I am feeling down, so I will go and purchase something, then I will feel better”.
This term is used to measure the consumer responses to foreign made products. Under this, there can be two types of consumers – consumers who are highly ethnocentric and who feel it is inappropriate to purchase foreign made goods. In India, sometimes the term ‘swadeshi goods’ is used If such individuals are in reality highly ethnocentric, they would exclusively go for the purchase of ‘Indian made’ products – like khadi clothes etc.
In contrast, those consumers who are low on ethnocentrism may have more attachment or affinity for made in U.S.A., Japan, etc., labelled products. This could probably be one of the reason’s for the flourishing of the so called “Burma Bazar’s, China Bazar’s and so forth in many cities, where many imitation products manufacturers sell similar goods by affixing false labels like made in U.S.A., made in Taiwan etc. on them.
v. Self-Concept or Self-image:
Individuals have a specific perception and image of themselves. These self-concept or self-images are closely connected to the personality of the products or services patronised by them. This means that consumers tend to purchase goods or services, which according to them have symbolic image closely related to their self-image.
Researchers have proposed that instead of considering an individual as a ‘single self’, it would be more appropriate to think of the consumer in terms of a multiple self. This is because the behaviour of an individual at a particular time will be dependent on the person with whom he is interacting and the social setting or social role which was prominent at that time. From this the marketer must infer that they have to market their product and services to suit the context of the ‘consumer’s self-image’.
Self-Image:
Each individual has an image of himself or herself as that of being a certain kind of person, with certain personality traits, habits, possessions, behaviour and so on. Each individual’s self-image will be a unique one based on his or her background and experience, and knowledge gained from various persons’ over a period of time.
According to various researchers, an individual can possess any of these self-images:
1. Actual self-image (how they actually see themselves).
2. Ideal self-image (how they would like to see themselves).
3. Social self-image (how they feel the society sees them).
4. Ideal social self-image (how they would like the society to see them)
5. Expected self-image (Their expectation of how they see themselves at some specified future time).
All the above self-images will be useful for the marketer’s. But the ‘ideal self-image’ and ‘expected self-image’ will be of more relevance to the marketer. This is because consumers may be induced to purchase goods or services to improve their actual self-image i.e., to reach their ‘ideal self-image’.
And expected self-image conveys that consumers may look out for opportunity to change their self. This can be used by marketers to manufacture products projecting the above opportunity for consumers.
Consumers have a preference for those products and services which match their personal images. Thus a knowledge of the various types of self-images of consumers, will enable marketers, work out marketing strategy programmes.
For instance, the marketer can work on market segmentation programmes on the basis of the relevant consumer self-image and then position their products or services to match the consumer social status and lifestyle, in various product categories.
Researchers are convinced of the relationship between consumers ownership of goods (or possessions) to their self-images. If a young son were to receive a stylish high priced wrist watch from his father, after faring well in the examination, the gift will serve as an enrichment to the son’s self-image. The son will feel enriched and see himself as a more hardworking, confident and successful and ‘include’ the stylish wrist watch to his inventory of self-enhancing possessions.
This only goes to show that human emotions are related to valued possessions.
Researchers have identified possessions which can extend the self in a number of ways such as:
1. Motivate the individual to do things; which otherwise would have been difficult (.For example, buying a personal computer to add to the status, may force the housewife to learn to operate the PC).
2. Through symbolic representation, make the person feel better and bigger. The contestant receiving cine star Shah Rukh Khan’s wrist watch on not earning much on the KBC reality show.
3. By conferring status or rank (For instance, M.F. Hussian being given a unique status by art lovers because of masterminding and possessing a unique masterpiece of painting).
4. By bestowing upon someone close, and handing over a priced possession.
5. By perceiving the receipt of a ‘gift’ from someone as a ‘good luck charm’ for you.
Going by human psychology of wishing to change themselves to enrich oneself with an ‘improved self-image’, marketers of various products and services are working at this. Consumers have the desire to project a new self, or maintain the present self, or extend the self – all with the intention of expressing their individualism or uniqueness.
Firms marketing products or services related to clothes, cosmetics, jewellery, hair styles, membership to certain clubs, other personal care products, beauty salons etc. are working out marketing plans so as to help the consumer gain an inflated and enhanced view of their physical appearance or self-image.
Jewellery brand marketers are working at innovative ways to woo the consumers and induce them to alter their self-image. Well-known brands are associating themselves with Bollywood films where they are endorsed by celebrities shown using signature jewellery ranges. For instance, the audience are exposed to seeing Aishwarya Rai show off Nakshatra Diamonds in Guru, the large star cast of Salaam-e-Ishq sparkle with Ira diamond jewellery, Woh Lamhe film featured a fashion show of Orrq and in Vivah, Amrita Rao is shown wearing D’damas diamonds. Later on D’damas came out with a Vivah range of jewellery and Bollywood Gold (a range of contemporary Indian jewellery).
Keeping in mind the emergence of the new, modern, multi-tasking women of today with disposable cash to indulge herself in, marketers are making attempts to come out with suitable products to match their altered self-image.
For example, Electrolux came out with a premium brand range called “affirmation of the self. Idea Cellular launched the first ever women’s card available on both prepaid and postpaid connections packed with value add ones such as tips on beauty, fashion, health and safety alerts to near and dear ones.
Consumer Buying Behaviour – 2 Components: Negotiation and Buyer Concerns
Negotiations are a part and parcel of life. We exploit our negotiating skills in our personal as well as professional life. Buyer objections and dealing with them – this was a topic of discussion in sales literature. Such an approach assumed that there is a win-lose situation in buyer-seller relationship. It all amounted to outsmarting the buyer. It was smacked of manipulation. These days buyer-seller relationship are based on a win-win situation. Negotiations are thus aimed at mutually satisfactory agreement to both the buyer and the seller. It is not a one shot affair. It should pave the way for long time. The salesperson becomes an advisor. All salespersons must possess the skill of negotiations.
There are two components here:
1. Negotiations and
2. Buyer concerns
1. Negotiations:
Negotiations happen in the entire sales process. Initially, they pertain to the venue, the person who will undertake the presentation and the duration of the sales call. Early concessions are given to strengthen the relationship. This may prove expensive later.
For instance, one can concede to a shorter demonstration, whereas the proper demonstration takes longer. Thus, the concessions in this fashion affect negatively. A salesperson can establish a strategic alliance with the buyer. This calls for lengthy negotiations extending up to several months. Later, after establishing an alliance, negotiations are carried out to resolve the concerns.
There is an inherent resistance to buy and salespeople should be prepared to overcome this by meeting the concerns voiced by the buyer during the sales call.
Most of the buyer concerns are related to:
i. Need,
ii. Product,
iii. Source,
iv. Price and
v. Time.
A prospect’s need must be recognized by doing the proper homework. Still, it is not uncommon to get the stereotype answer ‘I do not need your product, say a credit card now.’ It could be a conditioned response which is an excuse not to buy. The real reason of not buying may be non-affordability, no-time to assess the proposal or some other reason.
An advanced version of a washing machine has many advantages but it makes the existing machine obsolete. A buyer resists, and is likely to say ‘my present machine is quite OK’. Potential customers might say ‘Even without this advanced version we are not worse off.’ There is an indifference related to need.
This is a great challenge as the resistance is genuine. Why should a customer be dumped with a product that does not provide him any real benefits? We then have to think in terms of making him aware of the need for a better product, or else it is difficult to close the sale.
In business selling, one can emphasize that the product being promoted is a good investment. It should be pointed out how the product in the long run is economical. An office equipment can reduce operating costs, e.g., a better printer. A POS installed at cash counter can improve sales by accepting card payments. A trader may have an expensive product line in stock. One can impress upon him to have another line to cater to the customers of moderate means.
There can be a genuine problem, say the problem of overstocking. It can be suggested to have clearance sale to move the stock. He can be given the product being promoted on consignment basis. If the company policy permits, his present inventory can be purchased at negotiated price, and a suitable credit can be given to him against his maiden order. All this requires creative problem-solving.
Buyer in some cases resists the product itself. In this situation, we have to understand what the objections of the buyer are towards the product. People are risk-averse. They want reliable products. Buyers can be assured about the product’s quality through test reports and endorsements from satisfied buyers. Buyers may feel that the product awareness is poor and the product is unknown.
One can convince the buyer about the product being in stock with other suppliers. He should also be assured that promotional support would result into an increased demand for the product. Buyer may say that users known to him are not satisfied with the product. This is a very valid concern. One has to know the reasons for being unsatisfied. We have to collect information.
If there is misinformation, one can supply the right information. Buyer may be using a product right now which has not given him any reason to switch over. It is necessary to build a greater amount of desire in the buyer’s mind. One has to focus on the superiority of the product over the existing product he is using. The product can be configured better to suit the buyer’s changed needs.
Customers develop loyalty to their existing supplier. It then becomes difficult to overcome this. In such a situation, it is better to avoid direct criticism of the present source of supply. The presentation should be focused on the problems of the customers and their solution.
Loyalty objection can be handled by:
(i) Identifying the problems faced by the customer and offering to solve them
(ii) Suggest a second line, in addition to the existing line.
(iii) Indicate superiority of your product.
(iv) Asking customer to put a trial order to judge the merits.
(v) Keep in touch with the prospect
There may be some perceptions about the salesperson’s company in the prospect’s mind. If they are not accurate, they can be dealt with.
This is the commonest concern in personal selling. It requires careful negotiation. A high price pretext can be used to point out that I am not open to buying your product. However, price may not be a major barrier to sale, though it is important. It bothers many buyers. A professional buyer seeks the best possible bargain. A successful sales is based upon getting the right price-quality equation.
Dealing with Professional Buyers:
Professional buyers always point out a budget limitation. It may be real, or just a play to test the price. The salesperson addresses this by omitting certain features of the product, say cars without stereos, to meet the budget. A professional buyer can adopt a ‘take-it or leave-it’ technique by putting a monetary ceiling on the order. Here the option can be a price concession. Alternatively, product superiority can be impressed upon the buyer. If the buyer sticks to his price offer, negotiations can be halted. There is then room for face saving for the buyer by making a fresh offer. Sometimes, a buyer’s price offer is acceptable, but sometimes it is not. In such a case, a salesperson can make a counter offer.
A salesperson must be clear as what is acceptable and what is not.
Dealing with Low Price Strategy:
As a marketing policy, the products might be sold in large volumes by putting a low price on them. Such organizations allow salesperson to negotiate on the price by offering various discounts. Sometimes, companies can authorize the salespersons to match the competitor’s price.
A product is a bundle or a package and customers seek the whole package. Price alone may not matter. The customer tends to look at price alone. His attention should be directed to the other features of the whole package. Price should not be the focus of a sales presentation. It should not be discussed at an early stage. Price should be negotiated at the end, along with delivery date, support services or volume purchases. A salesperson should not be apologetic while quoting a price. The relationship between price and quality must be pointed out. A long lasting product costs less than a short-lasting one, even though it is priced higher initially. Price concessions should be given systematically and reluctantly.
A prospect asking time to think over is expressing time-related concern. It is called a “Stall”. A prospect wavers between having a product and experiencing anxiety and uncertainty while doing so. A stall means the buyer does not feel there are some advantages in immediately buying the product. A stall is a mixture of the positive and negative. We can ferret out what bothers the prospect by pointed questions.
A buyer should be persuaded about the benefits of buying immediately. A possible price increase should be indicated. The non-availability of the product or the scheme accompanying it can be pointed out. However, a salesperson must be truthful while dealing with this concern. He should not distort the picture unnecessarily.
The general negotiating strategies are based on the understanding of the buyer behaviour. First of all, the buyer concerns must be anticipated to deal with them effectively. A salesperson must be clear about the value proposition being offered to the buyer. A salesperson must do enough homework to meet the buyer objections. He should understand the buyer’s problem so that there is clarity about the negotiation.
It should be confirmed from the buyer by restating the problem. An alternative solution then can be offered. Areas of agreement must be identified so that points of disagreement can be negotiated. It is not advisable to lose your cool while dealing with true buyer concerns.
Methods of Addressing Buyer Concerns:
Buyer concerns are addressed by specific methods.
It consists of outright denial of a belief or opinion held by the prospect. Though risky, it can be used carefully. A buyer resents being told that he is wrong. Even when this is not far from the truth, it is unpalatable. At times the buyer’s opinion is not valid, and disagreement must be expressed. This is true when there is misinformation. A prospect may question product quality. He should be taken head on by substantiating the quality with facts and figures. Effective salespeople counter inaccuracies from the prospect’s side directly and promptly.
Our approach should be firm but fair. But it should not be offensive.
At times, the prospect has fully valid objections. At times, they are valid to a large extent. Here partial agreement is voiced. It calls for indirect denial. Products do have shortcomings. Prospects have every right to express their opinions. They should feel that they have worthwhile views. A newspaper ad, the prospect may feel, may be lost in the clutter. The space selling salesperson agrees, but suggests that a specially designed ad can stand, above the clutter. The approach is ‘yes, I agree………to’ reduce the impact of the denial.
A ‘feel-felt-found’ approach is effective for those prospects who have misgivings about mastering the handling of the product. A neuro-fuzzy washing machine, a customer may state, is difficult to operate. The salesperson points out that what he feels is valid, and many others have felt the same way, but when they actually used the washing machine, they found that is it quite easy to operate.
A problem can be converted into a question. A car owner wants to exchange his present car for a new better car, but is not satisfied by the exchange price offered. A salesman asks whether he agrees that though the exchange price for the old car is slightly lower than expectations but will be offset by fuel economy, extra service and dependability of the new car. Such questions are thought provoking. Objections can be anticipated. Suitable questions are framed.
A customer may raise a valid objection which cannot be dismissed. A photocopier may not have an automatic feed mechanism. Manual feeds consume operator’s time. But it can be explained to him that manual feeds are more reliable. Auto feeds may become inconvenient and expensive because of higher downtime. It should be proved that the equipment saves downtime and has a superior benefit.
It is easier to use a demo when the salesperson is fully conversant with the product on hand and the competitive products. A salesperson knows the competitive edge and exploits it. Demos are very effective in reducing buyer resistance. One demo may not be enough. A second demo can then be arranged. It provides substantiation.
A product can be given for trial to the prospect without any commitment on his part to buy it. This is popular with the new products.
Buyer resistance can be met squarely by offering a favourable third party testimony.
Several methods can be tried simultaneously to meet buyer resistance.
A good salesperson anticipates the objection. Sometimes, people just want to articulate their views. Their objection can be ignored in such cases. If the prospect is not feeling strongly about something, we can delay the resistance to dilute the strength of the objection. A prospect can be asked to elaborate objection.
His own distinction makes it easier for the salesperson to handle it. A salesperson can isolate an objection. It could be his principal objection, and meeting it could lead to a sale. A salesperson should not interrupt when an objection is being raised. He should listen to it carefully.