Consumer Behaviour Explained: Key Concepts, Market Segmentation and Cultural Influences
1. Consumer Behaviour
Consumer behaviour is the study of how consumers select, buy, use and dispose of products and services.
Significance: It helps companies understand needs, develop products, set prices, promote products and satisfy customers.
Consumer and Market
Consumer: A person who buys or uses goods and services.
Market: A group of actual and potential buyers who have a need and the ability or willingness to buy.
Difference Between Individual and Organisational Buying
Individual
- Personal use
- Smaller quantity
- Faster decision
- Emotions may influence the decision
Organisational
- Business use
- Large quantity
- Longer decision
- More rational and professional
Market Segmentation
Market segmentation is the process of dividing a market into groups with similar characteristics.
Types:
- Demographic: age, gender, income
- Lifestyle: interests, activities, values
- Usage: heavy or light users
- Benefit: the benefit wanted from the product
Product Positioning
Product positioning is the creation of a distinct image of a product in the consumer’s mind compared with competitors.
Example: Volvo is positioned around safety.
Culture
Culture refers to the shared values, beliefs, customs and traditions of a society.
Characteristics:
- Learned: People learn culture from family and society.
- Shared: Culture is shared by members of a group.
- Social: It develops through interaction with others.
- Dynamic: Culture changes over time.
- Influences behaviour: It affects consumer preferences and buying decisions.
- Passed from generation to generation: Through family, education and society.
Cross-Cultural Consumer Behaviour
Cross-cultural consumer behaviour is the study of how consumers from different cultures display different buying behaviours.
Example: McDonald’s changes its menu according to different countries.
Subculture
A subculture is a smaller cultural group within a larger culture that has its own values and customs.
Example: Regional or religious groups.
Social Groups
A social group consists of two or more people who interact and share common interests or goals.
Formation: Common interests, goals, values, interaction and support.
Reference Groups
Reference groups are groups that influence a person’s attitudes and buying behaviour.
Examples: Friends, family, celebrities, influencers.
Influence: Information, social pressure and the desire to fit in.
Social Media and Internet
Social media and the internet influence consumer behaviour through:
- Reviews and ratings
- Influencers
- Online information
- Price comparison
- Personalised ads
- Online shopping
Family Life Cycle
Stages a family goes through: Single, newly married, children, older children, empty nest, old age.
Significance: Each stage has different needs, income levels and buying patterns.
Family Purchase Decision
Five roles: Initiator, influencer, decider, buyer, user.
Example: A family buying a car: a child may suggest the purchase, parents influence and decide, a parent buys the car, and the family uses it.