Running Head: CONSUMER BEHAVIOR 1

Consumer Behavior and Consumer Buying Process

Literature Review

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CONSUMER BEHAVIOR 2

Contents
1. Literature Review........................................................................................................................3
1.1 Overview...............................................................................................................................3
2. Different Types of Consumer Decision Making Process..............................................................4
2.1 Initial Purchases....................................................................................................................4
3. Stages Involved in the Consumer Buying Process.......................................................................5
3.1 Problem Identification..........................................................................................................5
3.2 Alternative Evaluation...........................................................................................................6
3.3 Alternatives Evaluation.........................................................................................................9
a. The expectancy value model.............................................................................................10
b. Consumer choice according to non-compensatory models..............................................10
3.4 The Final Purchase Decision................................................................................................11
a. The influence of social group............................................................................................12
b. The varying situational factors..........................................................................................12
3.5 Post Purchase Behavior.......................................................................................................13
a. Satisfaction level at the post purchase stage.....................................................................13
b. Actions at the post purchase stage...................................................................................14
4. Factors Influencing the Consumer Buying Behavior..................................................................14
4.1 Direct factors and Deductible Influences...........................................................................15
a. Motivation.........................................................................................................................15
b. Perception.........................................................................................................................15
c. Attitude.............................................................................................................................16
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1. Literature Review
1.1 Overview
The buying behavior of customers is said to be highly complex and it has been

seen that although the buying process seems so dimple but there is a complex psychology

behind the consumer’s buying behavior and their purchase decisions. There are various

factors behind the motivation of consumers for making a buying decision. These factors

including perception, motivation, learning, memory, attitude and personality play an

important role in the five stage process of consumer buying behavior. The consumer

buying process is consisted of several stages including problem identification,

information search, alternatives evaluation, purchase decision and post purchase decision

(Tanner & Raymond, 2010).

It has been seen that one of the biggest challenge for sales people and marketers is

to develop effective strategies for customers so that these customers would have long

term and sustainable relationship with the company. It is important to understand the

realized and unrealized needs of the customers so that the effective strategies can be

developed for targeting these people (Grewal, Cline, & Davies, 2003). The customers

these days have greater power and authority because they have an easy access to the

latest information as well as they can get instant updates before buying a product or

service.

Because of greater developments in the technology it has become easy for the

customers to analyze and evaluate the information instantly and also they can make easy

price comparisons. Also they have greater choice in every segment of commerce. For

developing an effective consumer strategy it is important that the marketers should

identify first whether the product is business to business or its business to customers.
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Also it is important for the marketers that they must develop an effective customer

strategy by identifying the needs of the customers and also it can be done effectively by

offering them value added solutions. Moreover, it is important to treat different

consumers differently such as it has been proposed by various researchers that a same

strategy for the business customers and household customers would not work.

The buying behavior of business consumers is different from the household

customers because these customers buy products for further using them in the

manufacturing of other goods and services. These business customers have developed

their own buying centers and these buying centers are consisted of cross functional teams

who represent various departments of the company, buying materials for further reusing.

There are different types of business buying situations and these situations include new

task buy, straight rebuy, habitual buying decision, variety seeking buying decision, and

complex buying decision (Payne, Bettman, & Johnson, 1991). The roles and behavior of

the consumers change with a change in the buying situation in which these customers are

making purchases.

2. Different Types of Consumer Decision Making Process

There are different types of consumer decision making process and these types are

briefly explained below

2.1 Initial Purchases

During initial purchases there are different types of the decision making processes

and these processes include extended, mid-range and limited decision making? The

extended decision making is said to be another name of high involvement purchases such

as before buying a product, the consumers make an extensive level of internal and
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external buying research and they are highly involved with the purchase of a product.

The extended decision making occurs when the consumers do not have sufficient

information before making a purchase decision and they want to make extensive research

before buying a product.

As far as mid-range decision making is concerned, the researchers have proposed

that the mid-range decision making lies between the extended and limited decision

making. In amid range decision making process there is a greater number of alternatives

available and but the consumers have limited information regarding the purchase of

products and services (MUNTHIU, 2009). Hence a limited time is needed to make a

decision and the most appropriate alternative is selected from the number of alternatives

available, because the consumers have limited time and they have limited information.

The limited decision making is also said to be low involvement because the

customers have limited information and they also have a limited time to evaluate the

alternatives and to spend a huge amount of time before making purchase decision. The

complexity of the buying process can be removed by the customers as they conduct a

limited research before making a purchase decision. The limited decision making is the

simplest form of consumer buying behavior.

3. Stages Involved in the Consumer Buying Process

The consumer buying process is said to be consisted of various stages and these stages

are helpful for the marketers to understand the consumers buying patterns, so the

strategies can be developed accordingly. The consumer buying behavior is consisted of

several stages and these stages are described in detail in the following section.
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3.1 Problem Identification

The first step in the consumer buying behavior is the problem identification and

it has been seen that in this stage the customers identify the need and also they identify

the problem for which they have a need to make a purchase decision (Solomon, 2014).

The problem identification is one of the important phase of the consumer buying decision

making process because the consumers find a huge difference between the actual level of

satisfaction and the present level of satisfaction. There are internal and external factors

that have a strong influence on the need recognition of the consumers, and the internal

factors are based on the Maslow’s hierarchy of needs theory.

In most of the cases the basis needs trigger the internal stimuli whereas the

external stimuli is triggered by the advertisements and the promotional campaigns of the

products and service as well as by the influence of social circle. There are various factors

behind the generation of need recognition stage and these factors include, the wearing

and the consumption of the product being stocked by the customer, a change in the

existing needs of the customers as well as the appearance and the transformation, and an

extensive marketing campaign by the firms after the release of new products and

services. The phase of problem recognition also occurs because of the emergence of new

technologies and people need latest technologies and equipment to satisfy their needs.

Also the problem recognition is done because of a change in the economic status or the

demographical status of the customers.

3.2 Alternative Evaluation

The next stage after the problem recognition is the evaluation of alternatives and it is

seen that the after recognizing the unsatisfied needs, the consumers look for alternatives

so that they can make an appropriate buying process. The alternatives are identified by
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collecting the information from different sources so that a large number of alternatives

can be identified and they must have a capacity to satisfy the needs of the customers. At

this stage the information gathering is the most important part because the useful

alternatives can be identified only if the authentic and valid information is collected from

different sources. The accuracy and the quantity of the information is based on the two

factors including

 The products to be purchased

 The customers

At this stage the high involvement and the low involvement product decisions play a

significant role as the high involvement products that are not purchased frequently, needs

a highly researched information and this information is collected through different

sources, whereas the low involvement products do not need to search extensive

information and also a less number of alternatives are required for low involvement

products. The consumers look for alternatives and for an extensive information based on

their previous experiences and also on the satisfaction level of their products.

The researchers also proposed that the aroused customers look for extensive

alternatives and information and these customers, make their decisions based on the prior

experience as well as on the information collected through different sources. There are

two basic types of arousals, the customer’s experience. The first type of arousal is

heightened attention and the second types of the arousal is active information search. At

the time of heightened attention, the consumers are highly receptive to the information

about the product or service they want to buy. Whereas in the active information phase,

the customers look for the reading material, search information through the internet and
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also they believe on the information obtained through their social circle including friends

and family. And also during the active information phase the customers collect data from

the advertising and promotional campaigns of the company.

Figure 1: stages in consumer buying process

A different type of research is undertaken by the customers before making a

buying decision and before evaluating alternatives. The two broad categories include

internal research and external research. The internal research includes the mental process

of the customers, as how quickly they are able to recall the information stocked in their

memory, and also this information provide the basis of the consumer buying process. On

the other hand, the external research includes the information collected through different

sources and these sources are consisted of some major factors including experiential

factors, commercial factors, personal and public factors.

It has been revealed by the researchers in several research studies that the

influence of such factors may vary from different product categories, and for each

product category these factors are perceived differently. The consumers obtain a large

amount of information from the commercial sources and these sources are helpful in

evaluating the alternatives and also in providing the authentic information to the

customers. Moreover the advertising sources are also effective influencing the behavior
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of the customers because these factors provide an extensive information regarding the

website of the company and use social media platforms to reach the customers.

3.3 Alternatives Evaluation

After collecting enough information regarding the products from different

sources, the next step in the consumer buying process is the evaluation of the alternatives.

The alternatives are evaluated by the consumers in their mind, and these alternatives are

evaluated on the basis of different factors. At this stage, all the information collected in

the first stage is processed by the customers to make the most appropriate choice for a set

of the brands, and on the basis of this information, alternatives are evaluated. Here the

most important point to note is that the buying process does not remain the same for all

types of products but the complexity of buying process varies with a change in the level

of products. The evaluation process is changed with the complexity of the different

factors and these factors are stated as follows

 The experience of the consumers.

 The importance of the product or service to be purchased

 The opportunity cost in case a decision proved to be a wrong decision

 The complexity of the alternatives

 The available time needed to make a decision and to evaluate the alternatives.

The most significant factor behind the identification of alternatives is related to the

evaluation of the attributes, so that the product features can be evaluated for the purpose

of making the most appropriate decision. The second phase of the evaluation of

alternatives is related to the beliefs and attitudes of the consumers. The belief can be

defined as a descriptive thought of a person related to a particular product or service.

CONSUMER BEHAVIOR 10

Also the consumer buying decision is affected and influenced by the beliefs of the

customers regarding the attributes and features of the products.

As far as the attitude is concerned, it is stated that the attitude is the emotional

attachment of the consumers regarding the products and services, and also the attitude is

inked to the favorable and unfavorable perception of the customers regarding a particular

product or service. On the basis of alternative evaluation the customers make several

types of decisions and these decisions are briefly explained below

a. The expectancy value model

In this type of decision, the customers develop an attitude regarding the various

features and attributes of the products, and these decisions are based on the values and

beliefs of the customers(Hausman, 2000). The negative and positive set of beliefs is

developed and designed by the customers and these beliefs are helpful in evaluating the

product alternatives. Also such set of beliefs is helpful in identifying and evaluating the

most appropriate products for meeting customer’s demands and needs.

b. Consumer choice according to non-compensatory models

The non-compensatory models are also helpful to understand the alternative

evaluation of the products and the customers do use these models before making a buying

decision. This model is different and opposite to the expectancy model and instead of

comparing the positive and negative attributes of the products, the customers make their

buying decision in isolation. Also the non-compensatory models make the decision

making of the customers easy and with the help of these models, the customers can

evaluate the products and services without going in extensive details. The non-

compensatory models are consisted of the following activities.

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The conjunctive heuristics

In this situation, the minimum standard set by the customers are used to evaluate the

alternatives, and they accept the alternative product, which fulfils the minimum criteria.

And the customers do not go for the extensive evaluation of the attribute and these

customers also evaluate that if the brand does not fulfil the minimum criteria, such a

brand is not added in the process of alternative evaluation.

The disjunctive heuristic

In the disjunctive heuristics the consumers do not add all the features and attributes in the

minimum criteria, but only the major attributes are added in the evaluation process. If the

major attributes are fulfilled the customers do not go for evaluating the rest of the

attributes.

The elimination by aspects heuristics

The consumers select an attribute on the basis of the probability of the attribute and it is

seen that the probability of selecting this attribute is related to the importance of that

attribute for the customers (Hausman, 2000). The customers exclude those brands from

the alternative evaluation process if they find the product not meeting the minimum

criteria of the acceptable products.

The lexicographic heuristics

Here in this stage the attributes of products and services are arranged in a manner of their

importance and the customers chooses these brands if they meet the minimum criteria.

3.4 The Final Purchase Decision

After the most important and extensive alternative evaluation stage, the customers

make final purchase decision, and this purchase decision is based on the facts and the

importance of the rank of the products. So it is commonly observed that when the

alternatives are evaluated, the customers go for the products that lie between the purchase
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intentions and the purchase decisions. If the consumers find that the evaluated brands

meet at least two factors of the minimum selected criteria, they would go for buying that

product. The researchers have found that in the final stage of making a buying decision,

there is a stringer influence of consumer buying behavior, and these two factors are

discussed below

a. The influence of social group

The research studies have revealed the fact that the perception of others is also

associated with and have a strong influence on the consumer buying behavior. In case of

high involvement products the influence of social circle is strong, as the consumers

consider the experiences, beliefs and attitudes of their social group highly valuable. And

these beliefs and attitudes affect the decision making of the customers.

b. The varying situational factors

The unexpected situational factors also influence the consumers buying behavior

as it has been seen that the customers make their buying decision based on the expected

product benefit and expected price. But there are certain unexpected situational factors

that have a high influence on the consumer buying behavior (Mihart, 2012). These

unexpected profits include a downturn in the economy affecting the buying power of the

customers, and sometimes a drop in the prices of the products by the competitors, and the

consumer might change their decision of buying a specific brand, which they have

decided to buy earlier.

Also it has been revealed in the various research studies that during the buying

process, the decision of the consumers is highly dependent on the decisional behavior and

it includes decisions such as decision related to the purchase of the product or the service,

or the decision of not buying the product or service. Also it includes the decision of
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replacing the product, or postponing the product or the decision of buying the product

after evaluating further alternatives.

3.5 Post Purchase Behavior

The final buying decision is not the last and final stage of the buying process,

rather after making the final buying decision, the customers go for the post purchase

behavior. The post purchase behavior is related to the satisfaction level of the customers

after buying a product or service. Once the consumers make a final decision and they buy

a product, these customers make evaluation regarding their decision of buying a product

or service. This post purchase buying behavior is associated with the perceived

performance of the product or service and the customer’s expectations before buying that

product.

a. Satisfaction level at the post purchase stage

The satisfaction level after making a purchase decision and after buying a product

or service, occurs when such product or service meets the expectation level of customers.

Also the satisfaction level of customers is high when the bought product or service

exceeds the satisfaction level of employees it make them delighted, hence increasing the

satisfaction level of employees. Similarly, if the product is unable to meet the

expectations of consumers, there will be a highly level of disappointment among these

customers.

But on the other hand the market researchers have also revealed the fact that there

exists a cognitive dissonance in every purchase decision (Mihart, 2012). The consumers

face a discomfort if they are unable to find the satisfaction within the purchased product,

and also if there is a conflict at the time of purchase decision. Also it has been discussed

in the various research studies that if the product or service being bought provides
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customers with high level of satisfaction there would be a high level of satisfaction for

such products at the post purchase behavior. But it is also observed that the customers

may become highly dissatisfied with the disadvantages of the bought product, and this

stage increases the cognitive dissonance among customers. And also the research studies

shows that the customers are not easy about the products or service them quit, once they

realized the benefits of those products. Hence it is stated that post purchase dissonance

occurs in every purchase.

b. Actions at the post purchase stage

The post purchase actions are associated with the customer experience of using a

product or service. It has also been seen that the normally if the customers are satisfied

with the product or service, there is a greater probability that these customers would buy

the product or service in the near future. And this will, increase the customer loyalty with

the brand and a strong relationship with the brand. Also it has been observed that if the

customers are not satisfied with the product or service bought, they will not buy the

product in the near future, and there are greater chances that these customers would shift

to another brand.

4. Factors Influencing the Consumer Buying Behavior

After analyzing the consumer buying process, it is important to analyze the

factors that affect the consumer buying behavior. These factors, as stated above shows the

basic needs have a higher influence on the consumer decision making process. And the

other factors have been analyzed by studying the Maslow’s hierarchy of needs theory the

researchers have proposed that there are different factors that have a strong influence on

the consumer buying process (Wind, Thomas, & Sheth, 2014). The two main broad

categories include direct factors, and the deductible influences.

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4.1 Direct factors and Deductible Influences

The direct factors influencing the consumer buying process includes the economic

factors, demographic factors, situational factors and marketing mix factors. These factors

directly influence the buying pattern and buying decisions of the customers. Moreover

the research studies show that these factors enable the customers to evaluate the factors

before making purchases and these factors also have a strong influence on the post

purchase behavior of the customers. On the other hand the deductible influences include

attitude, learning, motivation, behavior, perception and learning. These influences are

directly linked to the understanding and the personal attitude of the customers towards

the products. And the marketers consider all these influences while managing the

products and developing the marketing strategies.

Besides these factors there are some psychological factors that have a strong influence on

the consumer buying behavior and process. Some of these factors are discussed below

a. Motivation
The Maslow’s hierarchy states the fact that consumers go to buy those products if they

have motivation of buying the products. And such motivation is derived by the need of

that product or service to use the product in order to fulfil the basic needs of the

customers.

b. Perception
The customer’s perception of different products and services also influence the buying

decision of these customers. Moreover, if the customers have a positive perception about

a product or service, there is a greater probability that such products will be preferred by

the customers, and if the customers have negative perception about a product or service,

they will not go for buying that product.

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c. Attitude
The researchers proposed that the attitudes of the customers are shaped by their prior

experience or by the social influence. So the attitudes of customers also have a strong

influence on the consumer buying behavior, as well as these attitudes effect on the long

term buying behavior of the customers. Also it has been seen that such attitudes of the

customers also influence the buying behavior of their social circle and it is essential for

the marketers to understand the behavior and attitudes of customers towards the product

or services.
CONSUMER BEHAVIOR 17

References

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Consumer Psychology, 13(3), 187-197.
Hausman, A. (2000). A multi-method investigation of consumer motivations in impulse buying
behavior. Journal of consumer marketing, 17(5), 403-426.
Mihart, C. (2012). Impact of integrated marketing communication on consumer behaviour:
effects on consumer decision–making process. International Journal of Marketing
Studies, 4(2), 121.
MUNTHIU, M.-C. (2009). The buying decision process and types of buying decision behaviour.
Sibiu Alma Mater University Journals, 2(4), 27-33.
Payne, J., Bettman, J., & Johnson, E. (1991). Consumer decision making. Handbook of consumer
behaviour, 50-84.
Solomon, M. R. (2014). Consumer behavior: Buying, having, and being (Vol. 10): Prentice Hall
Upper Saddle River, NJ.
Tanner, J., & Raymond, M. A. (2010). Consumer Behavior: How People Make Buying Decisions:
Flat World Knowledge.
Wind, Y., Thomas, R. J., & Sheth, J. N. (2014). Organizational buying behavior: SAGE Publications.