The core function of the marketing department is to understand and satisfy consumer need, wants and desire. Consumer behaviour captures all the aspect of purchase, utility and disposal of products and services. In groups and organization are considered within the framework of consumer. Failing to understand consumer behaviour is the recipe for disaster as some companies have found it the hard way. For example, Wal-Mart launched operations in Latin-America with store design replicating that of US markets. However, Latin America consumer differs to US consumer in every aspect. Wal-Mart suffered consequences and failed to create impact.
Social, cultural, individual and emotional forces play a big part in defining consumer buying behaviour. Cultural, sub-culture and social class play an important is finalizing consumer behaviour. For example, consumer growing up in US is exposed to individualism, freedom, achievement, choice, etc. On sub-culture level influence of religion, race, geographic location and ethnicity define consumer behaviour. Social class consists of consumer with the same level of income, education, taste, feeling of superiority and inferiority. Over time consumer can move from one social level to another.
Culture alone cannot define consumer behaviour; social forces also play an important role. Social forces consist of family, friends, peer groups, status and role in society. Groups which have direct or indirect influence on consumer are referred to as reference groups. Primary groups consist of friends, family and peers with whom consumer has direct contact for considerable time. Secondary groups are association where interaction is at formal level and time devoted is less.
Consumer buying behaviour is influenced by individuals own personality traits. These personality traits do not remain the same but change with the life cycle. The choice of occupation and corresponding income level also play part in determining consumer behaviour. A doctor and software engineer both would have different buying pattern in apparel, food automobile etc. Consumers from similar background, occupation and income levels may show a different lifestyle pattern.
An individual buying behaviour is influenced by motivation, perception, learning, beliefs and attitude. These factors affect consumer at a psychological level and determine her overall buying behaviour. Maslows hierarchy, Herzberg Theory and Freud Theory try and explain people different motivational level in undertaking a buying decision. Perception is what consumer understands about a product through their senses. Marketers have to pay attention to consumers perception about a brand rather than true offering of the product. Learning comes from experience; consumer may respond to stimuli and purchase a product. A favorable purchase will generate positive experience resulting in pleasant learning. Belief is the pre-conceived notion a consumer has towards a brand. It is kind of influence a brand exerts on consumer. For example, there is a strong belief product coming through German engineering are quality products. Companies may take advantage of this belief and route their production through Germany.
Companies need to think beyond buying behaviour and analyze the actual buying process. Complex buying behaviour requires high involvement of buyers, as it is infrequent in nature, expensive, and they are significant differences among the available choice e.g. automobile. Grocery buying is referred to as habitual buying, which requires less involvement as few differences among brands, frequent and inexpensive. Buying process involves purchase need, decision makers, information search, alternatives evaluation, purchase decision and post purchase behaviour. Companies try hard to understand consumer experience and expectation at every stage of buying process. Marketers need to figure the right combinations which will initiate purchase need e.g. marketing programs. Companies should ensure consumer have readily available information to take the decision e.g. internet, friends. Consumers evaluate alternatives based on their brand perception and belief. Companies need to work hard to develop products, which match this perception and belief every time. Final purchase decision is taken looking others perception of the brand. Post purchase if expectations meet actual performance consumer is satisfied and more likely to repurchase or recommend the brand to others.
Consumer markets are defined by various geographical, social and cultural factors. Furthermore, consumer behaviour is influenced by psychological, personality, reference groups and demographic reasons. Finally actual buying process involves complex process and cycle. Companies have to keep a tab on all three factors in formulating strategy.