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Analyzing Consumer Buying Behavior

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Marketing Management 571

Analyzing Consumer Buying Behavior

Factors that influence consumer decision making
Consumer buying decision process
Techniques of analyzing consumer buying behavior

The aim of marketing is to meet and satisfy target customers' needs and wants better than competitors. Marketers must have a thorough understanding of how consumers think, feel, and act and offer clear value to each and every target consumer. Successful marketing requires that companies fully connect with their customers. Adopting a holistic marketing orientation means understanding customers – gaining a 360 degree view of both their daily lives and the changes that occur during their lifetimes so that the right products are always marketed to the right customers in the right way. The product must bring a benefit to the customer in order for the company to maximize its profit.

Consumer decision-making processes are undertaken by consumers in regard to potential market transaction before, during, and after the purchase of a product or service. A consumer's buying behavior is influenced by cultural, social, and personal factors. Cultural factor carries the most impact on consumer buying decision-making. Culture is the fundamental determinant of a person's wants and behavior. Two children growing up in different countries would have significantly different beliefs and values in life. Therefore their buying decision-making will not be the same. Marketers have to be fully aware and knowledgable about the culture, where the product or service is delivered. Each culture consists of smaller subcultures (nationalities, religions, racial groups, and geographic regions), which leads marketers more specifically to their target consumer. Also social stratification in form of social classes influences consumer decision-making. For example there are seven social classes in United States: - lower lowers - upper lowers - working class - middle class - upper middle class - lower upper class - upper upper class In addition to cultural factors, social factors such as reference groups, family, and social roles and statuses affect our buying behavior. Reference groups are all the groups that have direct or indirect influence on person's attitude or behavior (family, friends, coworkers, neighbors). They expose an individual to new behaviors and lifestyles, they influence attitudes and self-concept, and they create pressures for conformity that may affect product and brand choices. Family is the most important consumer buying organization in society, and family members constitute the most influential primary reference group. There are two families in the buyer's life: family of orientation and family of procreation. Family of orientation consists of parents and siblings, who influence your orientation toward religion, politics, and economics and a sense of personal ambition, self-worth, and love. Family of procreation consists of person's spouse and children. For example a study held in United States has shown that children age 13 – 21 tend to influence their parents' buying decision of video and electronics products in average of $120 billion per year.
Roles and status. A role consists of the activities a person is expected to perform. Hence having a role in life delivers a status accordingly. People choose products that reflect and communicate their role and their actual or desired status in society.
Another key factor is age and stage in the life cycle. Consumer needs and desires change with age. Age and lifecycle categories are child, young adult, adult, and older adult.
Psychological factors include motivation, beliefs and attitudes, learning, and perception.
Chart below describes full variety of factors that influence consumer decision making.

2. In addition to understanding how these factors influence consumers, marketers must identify and understand:
The stages in the buying process
Who makes the buying decision
The buying decision process consists of five stages:
Problem recognition > Information Search > Evaluation of alternatives > Purchase decision > Post-purchase behavior
There are different types of buying roles that include initiator, influencer, decider, buyer, and user. The initiator is the person who first suggests or thinks of the idea of buying the particular product. For example, publisher of a book initiates the professor to ask the students of his class to purchase the book. Here publisher is the initiator, the first person to initiate the buying process. Influencer is a person who explicitly or implicitly has some influence on the final buying decision of others. Students are influenced by the advice of their professor while taking a decision to purchase a book. Here professor is the influencer. The decider is a person who ultimately determines any part or whole of the buying decision. Children are the deciders for buying the toys, house lady for kitchen provisions, and head of the family for durable or luxury items. The buyer is the person who actually makes the purchase. Buyer may be the decider or he may be some other person. Children are the deciders for purchasing the toys, but purchases are made by their parents. User is the person who actually uses or consumes the services or products.
3. There are different techniques which help marketers to understand and analyze consumer buying behavior.
- Experience and knowledge technique: buyers behavior is estimated on basis of experience and knowledge gained by the marketing executives because of their close association with the customers. Relying on their experience, marketers come to know what are the main buying motives for their products and why.
- Traditional or questionnaire technique: a questionnaire is prepared by the marketer with the help of psychologists. Questionnaires sent to consumers > filled in by consumers > returned back to company > responds are analyzed and results are extracted about buyers' motives and behavior.
- Depth interview technique. It is time consuming technique and requires considerable patience. No direct question is asked by the interviewer but the interviewer talks with the consumer in free atmosphere so that the interviewee may express their views intensively. It is possible for the skilled interviewer to go deep and uncover information buried below the conscious mind.
- Data mining. It is Internet era technique that allows marketers collect sophisticated information about the consumers' behavior, such as demographics (home address, age, income, home ownership), personality attributes, history of purchases, response to advertising, preference information, feedback.

Summary
Consumer's behavior is influenced by cultural, social, personal, and psychological factors. Research into these factors can provide clues to reach and serve consumers more effectively. Analyzing and understanding consumer buying behavior is very complex and complicated process, that involves a lot of knowledge about the consumer itself, his or her personal background, cultural background, social class relatedness etc. There are number of techniques that marketers use these days, that help identify consumers' buying behavior. It ranges from face to face interview to Internet data mining. Marketers have to remember that consumer is the king, therefore it is crucial to stay up to date with technology, create alternative methods of consumer research in order to benefit their companies.

References:
Marketing Management, Philip Kotler & Kevin Lane Keller, (Prentice Hall, 14th edition), 2011 http://www.freeworldacademy.com/newbizzadviser/fw13.htm http://en.wikipedia.org/wiki/Buyer_decision_processes http://www.seanmcpheat.com/sales/prospecting/the-five-main-buying-roles http://internetmarketingengine.com/data-mining.html

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