CONSUMER BEHAVIOUR

LESSON 36: TYPES OF PURCHASE DECISION BEHAVIOUR

Introduction
Consumer buying behaviour varies with the type of buying decision. The buying decision process further varies with the type of product involved. For instance, while a decision for buying bread is almost automatic, the decision for buying a laptop is more deliberate and time consuming. Similarly, there is a great deal of difference in buying a tube of toothpaste, apparels for yourself and a Television set for your home. This will depend on how complex the decision is likely to be and the degree of involvement required from the participants. In other words, more complex the decisions, more the involvement of buying participants and more the buyer deliberation. (2) money, and (3) information reception and processing capabilities or attention. Generally there are distinct limits on the availability of each, thus requiring some careful allocation. (c). Motivation: Psychologists and marketers alike have conducted a wide variety of studies to determine what takes place when goal-directed behavour is energized and activated. Chapter 3 discusses motivation thoroughly. (d). Knowledge: Knowledge is defined as information stored in memory. It encompasses a vast array of items such as the availability and characteristics of products and services; where and when to buy; and how to use products. One main goal of advertising and selling is to provide relevant knowledge and information to consumers so as to assist them with decision-making, especially in extended problem solving. (e). Attitudes: Behaviour is strongly influenced by attitudes toward a given brand or product. An attitude is simply an overall evaluation of an alternative, ranging from positive to negative. Once formed, attitudes play a directive role on future choice and are difficult to change. Nevertheless, attitude change is a common marketing goal, as you have seen in Chapter 6. b. Environmental Influences: In addition to individual variables, the decision process behaviour of consumers is also influenced by environmental factors which include culture, social class, family, personal influence and situation (a). Culture: Culture refers to the values, ideas, artifacts, and other meaningful symbols that help individuals communicate, interpret, and evaluate as members of society. Chapter 10 provides a comprehensive overview of cultural issues from both a global as well as domestic perspective. (b). Social class: Social classes are divisions within society that comprise individuals sharing similar values, interests, and behaviours. You have also seen this discussed in chapter 9. Socioeconomic status differences may lead to differing forms of consumer behaviour, say for example, the types of beverages served, the make and style of car driven, the kind of food liked, and the styles of dress preferred (c). Family: Since the field of consumer research was founded, the family has been a focus of research. As you have learnt in earlier chapters, the family often is the primary decisionmaking unit, with a complex and varying pattern of roles and functions. Cooperation and conflict often occur simultaneously with interesting behavioural outcomes. (d). Personal influence: As consumers, those with whom we closely associate often affect our behaviours. This is referred
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Objectives
After reading this lesson, you should be able to:

Differentiate between types of buyer decision behaviour Identify and explain the factors influencing problemsolving.

1. Variables that shape the decision Process

How people make decisions continue to interest researchers and strategists because of its complexity and dynamic nature. Even with all the options available to them, people are usually quite rational and make systematic use of the information, and usually consider the implications of their actions before they decide to engage or not engage in a given behaviour. In this section, we summarize information about variables that can influence decision-making. onsumer decision making is influenced and shaped by many factors and determinants that fall into three categories: a. b. c. Individual differences Environmental influences Psychological processes.

We have already covered all these factors in depth in earlier lessons; hence we are just presenting a summary of them. a. Individual Differences There are five major categories of individual differences, which affect behaviour, viz., (a). Demographics, psychographics, values and personality: The decision processes and buying behaviour gets very much affected by how people differ. You have read about these influences earlier. These variables include what has come to be known as psychographic research to probe into those individual traits, values, beliefs, and preferred behaviour patterns that correlate with behaviour in market segments. (b). Consumer resources: Each person brings three primary resources into every decision-making situations: (1) time,

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to as personal influence. Consumers often respond to perceived pressures to conform to the norms and expectations provided by others-seeking and taking their counsel on buying choices, observing what others are doing as information about consumption choices, and comparing their decisions to those of others. (e). Situation: Behaviours change as situations change. Sometimes these changes are erratic and unpredictable, such as job layoff, and at other times, they can be predicted by research. Situation is treated as a research variable in its own right and is discussed in various chapters. c. Psychological Processes: At the end, those who wish to understand and influence consumer behaviour must have a practical grasp of three basic psychological processes: (a). Information processing: Communication is a bottomline marketing activity. Therefore, consumer researchers have long been interested in discovering how people receive, process, and make sense of marketing communications. (b). Learning: Anyone attempting to influence the consumer is trying to bring about learning, the process by which experience leads to changes in knowledge and behaviour. Learning theory is relevant, especially for those products and services bought on the basis of relatively little reflection and evaluation. (c). Attitude and behaviour change: changes in attitude and behavour are an important marketing objective that reflects basic psychological influences and have been the subject of decades of intensive research.

iii. Promotion

CONSUMER BEHAVIOUR

iv.

Place (distribution)

v.

Kindly repeat this activity for a service of your choice such as banking product.

Activity 1
A company is planning to introduce a Business daily in the Indian Market. As a marketing consultant to this company, what motivational, perception and attitudinal characteristics will you consider for devising the four Ps for this product. i. Product

2. Types of decision behaviour

Sometimes consumers undertake a complex decision process requiring substantial amounts of time and energy. In situations in which consumers are making a decision for the first time, actions must be based on some form of problem solving. When this process is very complex, it is called extended problem solving (EPS). Limited problem solving (LPS), however, represents a lower degree of complexity. At the lowest end of the continuum stands what is known as routinised response behaviour (RRB) 1.1 Initial Purchase We will now distinguish these three major types of buying behaviour: (1) Routinised response behavior (RRB)/ Habitualbuying behavior: This is the simplest type of behaviour. This occurs when the consumer already has some experience of buying and using the product. Usually, this kind of behaviour is adopted for the purchase of low cost, frequently used items. In such cases the buyers do not give much thought, or search and also do not take a lot of time to make the purchase. Most of the time the buyer is familiar with the various brands available and the attributes of each and has a well-established criteria for selecting their own brand. The buyers are well aware of the product class, know the brands and also have a clear preference among the

i i . P r i c e

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brands. The degree of involvement in buying such products is low. In such a case, the marketer has to ensure two tasks: (a) The marketer must continue to provide satisfaction to the existing customers by maintaining quality, service and value. (b) He must try to attract new customers by making use of sales promotion techniques like points of purchase displays, off-price offers, etc., and also introduce new features to the products. (2) Limited problem solving (LPS)/ Dissonance reducing buying behavior: In this type of buying behavior, the consumer is familiar with the product and various brands available, but has no established brand preference. Here the buyer is more complex as compared to routine buying behavior because the consumer is confronted with an unfamiliar brand in a familiar product class. The consumer would like to gather additional information about the brands to arrive at his brand decision. For instance, a housewife buys refined vegetable oils for her cooking and she may be familiar with the concept of vegetable oil, vanaspati and ghee. She may also know that Dhara, Dalda and Sundrop are some of the leading brands available. But to establish her choice of brand, she would like to check with her friends and regular store about the attributes of each. This buying behavior as described limited problem solving because the buyers are in a situation where they are fully aware of the product class but not familiar with all the brands and their features. Limited problem solving also takes place when a consumer encounters an unfamiliar or new brand in a known product category. The housewife, who buys refined vegetable oil, on her next visit to the market, sees a new brand of oil, Saffola. Apart from buying a new brand, this brand of oil also claims the unique attribute of being low in cholesterol. To arrive at a decision, whether or not to buy this brand, the housewife needs to gather information about the new brand, which will allow her to compare it with the known brands. Here the marketers job is to design a communication programme, which will help the buyer to gather more information, increase his brand comprehension and gain confidence in the brand. (3) Extensive problem solving (EPS)/Complex buying behavior: This buying is referred to as a complex buying behavior because the consumer is in an unfamiliar product class and is not clear about what criteria to consider for buying. Extensive problem solving occurs when the consumer is encountering a new product category. He needs information on both the product category as well as the various brands available in it. This kind of decision is the most complex type. For instance, you may become interested in purchasing a Color Television set to replace the existing black and white one. You may have heard of the various brand names like BPL, Akai, etc. but lack clear brand concepts. You do not know what product attributes or features to consider while choosing a good television set. So yours is an extensive problem solving. The marketing strategy for such buying behavior must be such that it facilitates the consumers information gathering and

learning process about the product category and his own brand. The marketer must understand the information gathering and evaluation activities of the prospective consumers. They have to educate the prospective buyers to learn about the attributes of the product class, their relative importance and the high standing of the marketers brand on the more important brand attributes. The marketer must be able to provide his consumer with a very specific and unique set of positive attributes regarding his own brand, so that the purchase decision is made in his favour. N other words, the marketing communications should be aimed at supplying information and help the consumer to evaluate and feel good about his/her brand choice. The concept of EPS is most applicable to new products. The product may be new at the generic level e.g., Good Knight Mosquito repellant mats or it may be an established product concept but new for a particular consumer. IN case of a new product concept like ready to cook instant snack, the entire consumer universe is unfamiliar with the product. The marketer has to spend large amounts of money in educating the consumers about his product. The consumer in turn need a great deal of information before they can take a decision; and the decision process takes a longer time. On the other hand, you may have the situation where the product concept is well understood by a majority of the consumers, but it is being bought or used by a particular consumer for the first time. To take a very simple example, a tribal who is exposed to the concept of toothpaste for the first time in his life will seek a lot of information and take a long time to decide. Because fro him, buying a toothpaste is an EPS behaviour, whereas for most of us it is simply Routinised response behaviour. 1.2 Repeat Purchases Most purchases are repeated over time. When repeat purchases occur, there are two possibilities: (a) repeated problem solving, and (b) habitual decision-making. (a) Repeated Problem solving: Repeat purchases often require continued problem solving. Several factors including dissatisfaction with a previous purchase resulting in a brand switch or retail stock outs when the retailer doesnt have product available can lead to this outcome. (b) Habitual decision making: Habitual takes different forms, depending on the decision process followed in the initial purchases:

CONSUMER BEHAVIOUR

Brand loyalty/Company loyalty: Consumers have certain expectations about the products they buy and the retailers from whom they buy. The satisfaction that consumers experience when their expectations are met or exceeded often results in loyalty to that product or retailer. For the most part, consumers want to reward these companies with continued use over timethat is, brand or company loyalty, which can be highly resistant to change. Inertia: There are certain categories of products in which there is limited brand loyalty, for instance toothpaste. Where any degree of loyalty does not exist, it mostly consists of several brands, all of which are about equal. Buying habits of this type are based on inertia and are unstable. Although there is no incentive to switch, this
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may occur quite when prices are lowered with a coupon or another brand is promoted as offering something new. 1.3 Impulse Buying Impulse purchases are the least complex form of LPS but differs in some forms important ways. This kind of buying may be explained as an unplanned, spur-of-the-moment action triggered by product display or point-of-sale promotion. The main characteristics of Impulse buying are:

In the case of bread, the only decision variables may be which brand, quantity and retail outlet. But in the case of buying a sofa set the decision variables are far more in number. These may be:

CONSUMER BEHAVIOUR

Ready-made or made to order From a furniture shop or to be built at home Type of material for frame: wood, steel, aluminum Type of material for cushion: cloth, rexine, leather Design: with or without armrests, height, depth of seat, seating capacity, loose or fixed cushion.

A sudden and spontaneous desire to act accompanied by urgency. A state of psychological disequilibrium in which a person can feel temporarily out of control. The onset of conflict and struggle that is resolved by an immediate action. Minimal objective evaluation exists-emotional considerations dominate. A lack of regard for consequences.

Thus, depending on the type of decision being made, the degree and strength of active reasoning will vary. There are three factors, which influence the degree of active reasoning that is undertaken by the consumer in his process of decision-making. These are: i. ii. i. Involvement Alternative differentiation, and Involvement: The degree of personal involvement is a key factor in shaping the type of decision process that consumers will be followed. Involvement is the level of perceived personal importance and/or interest evoked by a stimulus within a specific situation. When a product is perceived to be of great importance to the customer, such as personal clothing, or its purchase involves a great deal of money or risk such as jeweler, car, house, company shares, the level of involvement in making the decision is likely to be very high. The consumer is likely to spend a great deal of time before arriving at the final decision. In contrast, when buying items which do not reflect much on the consumers personality or their purchase involves small amounts of money or the risks associated with them is not high, the degree of involvement of the consumer is likely to be low. Products such as shoes, polish, toilet soap, toothpaste, biscuits etc. would fall in this category. Several factors exist that determine the degree of involvement consumers have in making a decision. Some of them are as under: (i). Personal factors: The degree of involvement tends to be higher when the outcome of the decision affects the person directly. Personal factors include self-image, health, beauty, or physical condition. Without activation of need and drive, there will be no involvement, and it is strongest when the product or service is perceived as enhancing selfimage. When that is the case, involvement is likely to be enduring and no function as a stable trait, as opposed to being situational or temporary. For example, the purchase of the wedding trousseau, tends to be a high involvement decision because your wedding is a special occasion and it also affects directly your self-image and looks. A consumers physical handicap may also affect how involved he or she is in buying a home. Are there steps leading up to the house? Is there a bedroom on the first floor, and are doorways wide enough to accommodate a wheel chair?

Although there is an absence of the careful reasoning of EPS, there is not the indifference that accompanies LPS. A high sense of emotional involvement and urgency, in effect, short-circuits the reasoning process and motivates immediate action. 1.4 Variety Seeking Consumers often express satisfaction with their present brand but still engage in brand switching. The motive is variety seeking, which occurs most often when there are many similar alternatives, frequent brand shifts, and high purchase frequency. It can occur simply because someone is bored with his or her current brand choice, or it can be prompted by external cues as store stock outs or coupons that promote switching.
Number of Brands Purchased in a given time period SINGLE MULTIPLE Consumer HIGH Brand Variety commitment Loyalty Seeking LOW Repeat Derived Purchase varied behaviour behaviour

iii. Time pressure

Fig 13.1 Categories of purchase behaviors Fig 13.1 shows four categories of purchasing patterns, ranging from brand loyalty to variety seeking. It incorporates factors such as consumer commitment or loyalty to brands and the number of brands purchased in a particular time period. Factors influencing the extent of problem solving Each decision you make involves an elaborate mental thought process, a degree of active reasoning, though on the surface it may not always seem to be so. This may be because over a period of time you have taken certain decisions so many times that they now seem to be made almost automatically but that is not true at all. Even your daily decision of buying a loaf of bread involves the element of active reasoning as buying a new sofa set for your drawing room. However, in the former case, the extent and intensity of active reasoning may be much less as compared to the latter case.

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(ii). Product factors: Products or brands also become involving if there is some perceived risk in purchasing and using them. Many types of perceived risks have been identified, including physical (risk of bodily harm), psychological (especially, a negative effect on self-image), performance (fear that the product will not perform as expected), and financial (risk that outcomes will lead to loss of earnings). As is logical, the greater the perceived risk, the greater the likelihood of high involvement. When perceived risk becomes unacceptably high, there is motivation either to avoid purchase and use altogether or to minimize risk through the search and pre-purchase alternative evaluation stages in extended problem solving. For example, we may become highly involved in the choice of a doctor, especially when surgery is required, because of the high-perceived risk. (iii). Situational factors: Situational or instrumental involvement includes factors such as whether the product is purchased for personal use or as a gift, and whether it is consumed alone or with others. Situational involvement changes over time: it may be strong on a temporary basis and wanes once purchasing outcomes are resolved. This is usually the case with fads such as trendy clothing items in which involvement is high initially but quickly diminishes once the item is worn and fashions begin to change. There also are times when an otherwise uninvolving product takes on a different degree of relevance because ii. Differentiation: When the consumer perceives that the various alternatives which are available are very different from one another in terms of their features and benefits offered, he is likely to spend more time in gathering information about and evaluating these different features. On the other hand, in case of products which are not very different from one another either in terms of their features or benefits offered, the consumer is bound to perceive them as being almost the same and buy the first available product/brand which satisfies his minimum expectation. He will not like to spend much time in evaluating the various alternatives. The various brands of washing powder available in the market today are an excellent example of low level of differentiation with the consumer perceiving the different brands to be offering almost identical benefit. All the brands such as surf, Ariel, Tide, Rin, Nirma, etc., look similar with identical packing and carry almost the same price tag. Till a few years ago the branded shoes was highly undifferentiated with Bata offering standard options to consumers in terms of styles of shoes. Then came the different players in this market like Woodlands, Liberty, Action, and a host of other multinational brands creating on the way a multitude of segments in the otherwise staid shoes market like formal, casual, sports shoes etc. iii. Time pressure: When you are under pressure to make a decision, you cannot afford to spend a long time finding out about the various products or brands. You would
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probably buy whatever is readily available. While traveling your car tyre busts and you dont have a spare and hence you need to buy a new one. At that time you would buy the brand that is available at whatever price without giving it too much thought. But under a different situation, when you need to buy new tyres, you would certainly like to find the features of nylon and radial tyres and evaluate various brands e.g., Modi, MRF, Dunlop and Apollo etc. on their individual advantages and disadvantages.

CONSUMER BEHAVIOUR

Activiity 1
a. For each of the product/service given below, identify whether the purchase decision involves a high or low degree of involvement under normal circumstances: i. Car tyre ii. A pair of sneakers iii. Restaurant iv. Toothpaste v. Motorcycle vi. Microwave vii. Sweater viii. VCD Player ix. A bottler of Pepsi x. Book Shelf a. In respect of the above products, record which differentiated alternatives (brands) are available in the market?

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Key Terms

CONSUMER BEHAVIOUR

Individual differences Environmental influences Psychological processes. Demographics Psychographics Values Personality Consumer resources Involvement Alternative differentiation Time pressure Variety Seeking Impulse Buying Habitual decision making Repeated Problem solving Repeat Purchases Psychological processes Extended problem solving (EPS) Limited problem solving (LPS) Routinised response behavior (RRB) Habitual-buying behavior Dissonance reducing buying behavior Complex buying behavior

Individual differences
Demographics, psychographics, values and personality : Consumer resources Motivation Knowledge Attitudes

Points To Remember

Variables shaping the decision Process

Individual differences

Environmental influences
Culture Social class Family Personal influence Situation

Environmental influences

Psychological processes

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CONSUMER BEHAVIOUR

Psychological processes
Information processing Learning Attitude and behaviour change

Factors influencing the extent of problem solving

i. ii. iii. Involvement Alternative differentiation, and Time pressure

Types of decision behaviour

Initial Purchase
Routinised response behavior (RRB) Limited problem solving (LPS) Extensive problem solving (EPS)

Involvement
Personal factors Product factors Situational factors

Repeat Purchases
Repeated Problem solving Habitual decision making

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