A fundamental understanding of consumer behaviour underpins all marketing activity and is a necessary prerequisite to organizations being marketing orientated and thus profitable. Understanding consumer behaviour is not only important for the producer but for all the other actors in the value chain. The value that the consumer puts on the goods or services limits what everyone else can get from the value chain. Engel’s four-step model can be used as a basic model for analysing a consumer purchase. Most purchases are made to satisfy a problem.
Analysis of problem recognition can be done through the ‘means-end’ chain concept. This looks at what motivates a consumer to buy products.
The search for information can be either internal or external, the latter can also be either active or passive. Consumers usually have a number of alternative solutions to choose from and, depending upon the complexity of the purchase, will either be multi-attribute decision-making or based on decision heuristics. Outcomes tend to depend upon the degree to which performance meets expectations which in turn can be influenced by a number of factors within and outside the marketer’s control. Although the model is useful, two other factors that need to be taken into account are involvement and habit formation. Involvement refers to the subjective importance of the purchase and is a function of financial and functional importance, perceived risk, emotional value and sign value.
Alternatively many decisions can be based on habit, habit formation being a prerequisite of brand loyalty. Depending on the degree of involvement and whether a habit has been formed or not, four types of buying decision emerge: complex decisions, brand loyalty, limited decisions, and inertia.

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Consumer information processing.
There are four aspects of consumer information processing; attention and