Chartered Institute of Customer Relationship Management

Student name: Maneta Linnys Dzauma (FR21001)

Course Name: Customer Communications

Programme: Post Graduate Diploma In Customer Relationship Mgnt

LECTURER: DR M. T. Nkosi

DUE DATE: 21 October 2022

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 Table of Contents

Question Description Page

1a. Connection between consumer behavior and consumer psychology 3

b. Importance of consumer psychology to marketers
c. Consumer Decision Making Process

2 a. Social factors 7
b. Cultural factors
c. Psychological factors
d. Individual factors

3 Role of research in consumer behavior 27

4 Role and relevance of customer psychology in behaviour of customer 31

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 1. (a) Explain the connection between consumer behavior and consumer psychology.

Consumer psychology is the study of the processes involved when individuals or groups select,
purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires.
The decision to consume typically is the culmination of a series of stages that include need
recognition, information search, evaluation of alternatives, purchase and post purchase
evaluation. However, in some cases (especially when involvement with the product or service to
be chosen is low), this rational sequence is short-circuited as consumers make decisions based on
‘‘shortcuts’’ called heuristics (for example, ‘‘Choose a well-known brand name’’). In other cases
(especially when involvement with the product or service to be chosen is especially high, as is
the case with extremely risky decisions or when the object carries extreme emotional
significance to the individual), subjective criteria also may cause the person’s choice to diverge
from the outcome predicted by a strictly rational perspective on behavior. One must also
recognize that the study of consumer behavior is extremely interdisciplinary. Although
psychology is one of the core disciplines that have shaped the field, many other important
perspectives from economics, sociology, and other social sciences also play a dominant role.

1. (b) What is the importance of consumer psychology to marketers?

Although most marketing professionals aren’t professionals in psychology, more are looking at
the field of consumer psychology as a way to prepare for a successful marketing career.
Marketers must use psychological principles to attract and engage customers. Consumer
behavior focuses on “the study of individuals, groups, or organizations and the processes they
use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs
and the impacts that these processes have on the consumer and society.”

Companies in the competitive and global world today need to understand their customers when
developing and marketing new products. Whereas a more traditional approach to marketing may

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have identified that a product appeals to consumers in a certain demographic, today businesses
are digging deeper to understand why consumers act in certain ways, as well as what influences
shape the way they might react to situations.

Consumer choice historically was often driven by corporate imperatives. Henry Ford once said,
“Any customer can have a car painted any color that he wants, so long as it’s black.” Today,
consumers have access to many more options than they used to, giving them more control to
demand products and services that meet their needs. Studying consumer behavior and preference
involves how customers use and dispose of products as well as how they make decisions to
purchase products. Consumer-driven psychology and marketing can alter the positioning of a
product in the marketplace and can even alter the design of the products themselves.

There are many ways to apply consumer behavior, but a few are designing effective social
marketing campaigns, development of marketing strategies, and conducting research on
consumer insights.

The tools of consumer psychology can form the basis for developing a strategic marketing plan
for a new product or company. In particular, data-driven planning that accounts for the
psychology of consumers is increasingly important in this digital and global age. For example,
modern consumers typically do not respond to negative marketing campaigns. Customers who
see a company speak negatively about the competition may reconsider whether that brand
deserves their loyalty.

Instead of spending time and resources criticizing the competition, a psychological

understanding of consumers can point to a repositioning of the marketing message. A focus on
the positives of a product or brand, such as emphasizing that it fills a high-value, different need
than others in the market, may be more productive as a strategy. Positioning a product as the top
choice without much competition takes advantage of consumer psychology and avoids engaging
in negative campaigns.

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Emotions play a major role in our lives. Appealing to them in a positive way can transform the
way you market to customers. Research shows that making someone feel important and included
is more likely to generate a better response. The Cancer Association included the phrase “even a
penny will help” in its fundraising campaigns, resulting in 50 percent of people making
donations to the cause. Campaigns that didn’t appeal as much too human emotions showed that
only 29 percent of people made donations.

Marketing strategies that are based on a solid understanding of consumer psychology will be
more effective in today’s world.

1. (c) Briefly explain the Consumer Decision Making Process.

The consumer decision-making process involves five basic steps. This is the process by which
consumers evaluate making a purchasing decision. The consumer decision-making process can
seem mysterious, but all consumers go through basic steps when making a purchase to determine
what products and services will best fit their needs. Think about your own thought process when
buying something especially when it’s something big, like a car. You consider what you need,
research, and compare your options before making the decision to buy. Afterward, you often
wonder if you made the right call. If you work in sales or marketing, make more of an impact by
putting yourself in the customer’s shoes and reviewing the steps in the consumer decision-
making process. The five steps are problem recognition, information search, alternatives
evaluation, purchase decision and post-purchase evaluation

Problem Recognition
The first step of the consumer decision-making process is recognizing the need for a service or
product. Need recognition, whether prompted internally or externally, results in the same
response: a want. Once consumers recognize a want, they need to gather information to
understand how they can fulfill that want, which leads to step two. But how can you influence
consumers at this stage? Since internal stimulus comes from within and includes basic impulses
like hunger or a change in lifestyle, focus your sales and marketing efforts on external

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stimulus. Develop a comprehensive brand campaign to build brand awareness and recognition––
you want consumers to know you and trust you. Most importantly, you want them to feel like
they have a problem only you can solve.

Information Search
When researching their options, consumers again rely on internal and external factors, as well as
past interactions with a product or brand, both positive and negative. In the information stage,
they may browse through options at a physical location or consult online resources, such as
Google or customer reviews. Your job as a brand is to give the potential customer access to the
information they want, with the hopes that they decide to purchase your product or service.
Create a funnel and plan out the types of content that people will need. Present yourself as a
trustworthy source of knowledge and information. Another important strategy is word of mouth
—since consumers trust each other more than they do businesses, make sure to include
consumer-generated content, like customer reviews or video testimonials, on your website.

Alternatives Evaluation

At this point in the consumer decision-making process, prospective buyers have developed
criteria for what they want in a product. Now they weigh their prospective choices against
comparable alternatives. Alternatives may present themselves in the form of lower prices,
additional product benefits, product availability, or something as personal as color or style
options. Your marketing material should be geared towards convincing consumers that your
product is superior to other alternatives. Be ready to overcome objections, for example, in sales
calls, know your competitors so you can answer questions and compare benefits.

Purchase Decision
This is the moment the consumer has been waiting for: the purchase. Once they have gathered
all the facts, including feedback from previous customers, consumers should arrive at a logical
conclusion on the product or service to purchase. If you’ve done your job correctly, the
consumer will recognize that your product is the best option and decide to purchase it

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 Post-purchase evaluation
This part of the consumer decision-making process involves reflection from both the consumer
and the seller. As a seller, you should try to gauge the following:
 Did the purchase meet the need the consumer identified?
 Is the customer happy with the purchase?
 How can you continue to engage with this customer?
Remember, it’s your job to ensure your customer continues to have a positive experience with
your product. Post-purchase engagement could include follow-up emails, discount coupons, and
newsletters to entice the customer to make an additional purchase. You want to gain life-long
customers, and in an age where anyone can leave an online review, it’s more important than ever
to keep customers happy

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 2. Explain, how each of the following affect consumer behavior:
(a) Social factors

Social factors that influence consumer purchasing include family, peers, roles and status. Family
members such as a spouse, children and parents can exert strong influence on the consumer’s
purchasing behavior. Peer pressure is also a strong factor that determines a consumer’s
purchasing choices. Everyone belongs to a group of some sort, from friends to neighbors and
coworkers. Rather than get left out, people purchase products that make them fit in. A person’s
role in life, for example, as a manager and the status that comes with the position, determine
certain purchasing choices (Jonathan, 2013:2). A consumer’s behavior is also influenced by
social factors, such as the consumer’s reference group, family, and social roles and statuses
(Pandey and Dixit, 2011: 24).
A reference group is a group which an individual uses as a base while forming his/her values and
manners and very important with regards to consumer behaviors. They give information to their
group members about special products and brands and provide individuals with the opportunity
of comparing the manners and attitudes of the group with their own thoughts. They affect
individuals in accordance with the norms of the group (Schiffman and Kanuk, 2010: 351).
Reference groups especially determines the desired and undesired products (Makgose and
Mohube, 2007: 64). Moreover, they are inclined to affect choice of products, information
process, form of manner and shopping behaviors of consumers (Lanchance and Beaudoin. 2003:

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27). Marketing managers feel a need for defining reference groups along with consumers in the
target markets which they have determined. Because reference groups have the power of
affecting lifestyles, manners and self-expressions of consumers. Reference groups usually have
opinion leaders. These leaders have an important role in reference groups. For example, they are
definitely invited opening nights of touristic facilities or anniversary celebrations. (Hayta. 2008:
44).

Family can be defined as social group which consists of two or more people living together as a
result of marriage or kindred ship (Odabaşı and Barış. 2011: 245). A person is affected form
his/her environment whiles/he is growing up and family members have a big influence on
buyers. We can classify this influence as opinion givers, decision makers, influencers, buyers
and users (Arslan. 2001: 92). Impact of family is an important matter and a sociological factor in
terms of consumer behavior. Family is the smallest unit of a society. Family structure, culture
and roles of the family members vary from country to country. In every stage of buying, family
members are affected by each other. In some families, father is at the forefront, his role is
important in the process of decision-making. While in others mother and children have priority
(Maksudunov, 2008: 63).

Activities and behaviors which determine the position of an individual is called ‘role’ (Demet,
2008: 18). Positions of individuals when they attend to foundations, clubs or institutions can be
dealed with in terms of role and status. For example; a women plays the role of a daughter to her
parents but in her workplace her role is the one of product manager. Each of these roles has an
effect on the behaviors of consumers. Every role has a status in the society. Products’ can
function as a symbol of statutes according to social classes, geographical conditions and time.
Contractors’ using Mercedes is one of the best examples of this in Turkey (Abıcılar, 2006: 25).

(b) Cultural factors

Culture is the complex of beliefs of human societies, their roles, their behavior, their values,
traditions, customs and traditions. Culture is an extremely important concept to understand
consumer behavior and that needs to be examined. Culture is the sum of a shared purpose among

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members of society, customs, norms and traditions. The basic reason of person’s desire or
determination is culture. Cultural differences among consumers in the country, compared with
consumers outside the country is usually less. Cultural differences about consumer behavior
between countries are quite big.

International marketers believe that consumers would increasingly resemble each other and that
they will eat the same food, wear same clothes and watch the same television programs to an
increasing proportion. But the reality is very different, therefore, to trade in international
markets, man must overcome the large cultural and economic boundaries. Not only improve the
worldwide competition in the market also different traditional beliefs, preferences, habits,
customs are needed to be understood. Culture involves society's thoughts, words, their traditions,
language, materials, attitudes and feelings. One of the elements that makes culture is beliefs.
Beliefs of the people in a community can show similarities. For example, four and four times in
Japan are seen as unlucky, because of that most products are sold in groups of five leads.
Another element of culture, tradition, is related with non-verbal behavior of individuals. In
France the men use more cosmetic products than the women, which shows the self-conscious
tradition of the French men. As a result, learning of cultural properties in the analysis of
consumer behavior has been an important variable in marketing, especially in market
segmentation, target market and product positioning

Geographical regions and religions are essential in the formation of sub-culture. The preference
of individuals who live very close to each other can be different. Individuals belonging to
different have different subculture values, attitudes and social structures of the members of other
sub-culture. These differences, subcultural segmentation of the market activity has made an
important variable. It is important to know the characteristics of the sub-culture in creating the
marketing mix price, brand name identification, promotional activities and product positioning

(c) Psychological factors

Successful businesses understand how to leverage the different factors that influence consumer
buying behavior to effectively market their products and maximize sales. Studies show that there

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are generally four main factors that play a role in the consumer's buying behavior. These factors
include cultural factors, social factors, personal factors and psychological factors. The
psychological factors that influence an individual's decision to make a purchase are further
categorized into the individual's motivations, perceptions, learning and his beliefs and attitudes
(Callwood, 2013).

Motivation is an activated internal need state leading to goal-directed behavior to satisfy that
need. Accordingly motives can be defined as relatively enduring, strong, and persistent internal
stimuli that arouse and direct behavior toward certain goals (Trehan, 2009). The starting point in
the buying process is recognition of need. A need may be defined as lack of something useful. A
person can be motivated to buy a product for convenience, for style, for prestige, for self-pride or
being at par with others (Khan, 2007). If the marketers know what creates motivation, they may
be able to develop marketing tactics to influence consumers’ motivation to think about, be
involved with, and/or process information about their brand or ad (Smoke, 2009).

Perception is called as the energy which makes us aware of the world around us and attaches a
meaning to it after a sensing process. Each human being in the world sees his/her surroundings
differently. Several people have the same ideas about a specific event. No one can see or feel the
100% of all things. Ever wonder why people buy certain products? It is all about perception.
Perception is how consumers understand the world around them based on information received
through their senses. In response to stimuli, consumers subconsciously evaluate their needs,
values and expectations, and then they use that evaluation to select, organize and interpret the
stimuli (Connolly, 2010). The marketplace’s perception of a brand or industry is extremely
important, which is why big brands work so hard to ensure that the general perception
surrounding them and their industry is as positive as possible. As a result, companies like
Gillette, will pay David Beckham to ‘model’ their products. By aligning the way people feel
about Beckham, with the Gillette brand, Gillette can improve the perception of their brand or
reinforce what’s already positive about it (Taylor, 2006).

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Learning describes changes in an individual’s behavior arising from experience. In every
circumstance our perception is conditioned by our prior experience, for it is this which
constitutes our preparatory set or expectations and the framework into which we seek to place
and organize new stimuli. In other words, we have learned from our earlier experience and seek
to maintain balance or consistency by relating to and interpreting new stimuli in terms of past or
learned stimuli (Blythe, 2008). The practical significance of learning theory of marketers is that
they can build demand for a product by associating it with strong drives, using motivating cues,
and to the same drives as competitors and providing similar cues because buyers are more likely
to transfer loyalty to similar brands then to dissimilar ones (Lamb, 2010).

Kotler defines belief as “descriptive thought that a person holds about something” and attitude as
“a person’s enduring favorable or unfavorable cognitive evaluations, emotional feelings, and
action tendencies toward some object or idea”. Individuals can have specific beliefs and attitudes
about specific products and services (Sarangapani, 2009). Marketers are interested in the beliefs
that people formulate about specific products and services because these beliefs make up product
and brand images that affect buying behavior. If some of the beliefs are wrong and prevent
purchase, the marketer has to launch a campaign to correct them. A consumer may believe that
Sony’s Cyber-shot camera takes the best HD video, is easiest to use, and is the most reasonably
priced. These beliefs may be based on knowledge, faith, or hearsay. Consumers tend to develop a
set of beliefs about a product’s attributes and then, through these beliefs, form a brand image-a
set of beliefs about a particular brand (Lee, 2007). People have attitudes regarding religion,
politics, clothes, music, food, etc. Attitude of consumer also influences the consumer behavior. If
consumer’s attitude towards a product is favorable, then it will have positive effect on consumer
behavior. The marketers discover prevailing attitude towards their product and try to make it
positive, and if it is already positive, then try to maintain it (Hoyer & Deborah, 2008).

(d) Individual factors

The personal factors are the individual factors to the consumers that strongly influences their
buying behaviors. These factors vary from person to person that results in a different set of

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perceptions, attitudes and behavior towards certain goods and services. Some of the important
personal factors are age, income, occupation and lifestyle.

The consumer buying behavior is greatly influenced by his age, that is, the life cycle stage in
which he falls. The people buy different products in different stages of the life cycle. Such as the
purchase of confectionaries, chocolates is more when an individual is a child and as he grows his
preferences for the products also changes.

The income of the person influences his buying patterns. The income decides the purchasing
power of an individual and thus, the more the personal income, the more will be the expenditure
on other items and vice-versa.

The occupation of the individual also influences his buying behavior. The people tend to buy
those products and services that advocate their profession and role in the society. For example,
the buying patterns of the lawyer will be different from the other groups of people such as
doctor, teacher and businessman.

The consumer buying behavior is also influenced by his lifestyle. The lifestyle means
individual’s interest, values, opinions and activities that reflect the manner in which he lives in
the society. Such as, if the person has a healthy lifestyle then he will avoid the junk food and
consume more of organic products, vegetables and white meat.

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 3. With the use of practical examples, explain the role of research in consumer
behavior.

Consumer research is a part of market research in which inclination, motivation and purchase
behavior of the targeted customers are identified. Consumer research helps businesses or
organizations understand customer psychology and create detailed purchasing behavior profiles.
Consumer behavior is constantly changing in response to digitization, market trends, social
factors, psychological factors and more. The advent of social media, for example, has
transformed how people engage with their favorite brands. Companies worldwide are trying to
keep up with these changes and drive innovation to remain competitive. The role of consumer
research is to help organizations identify their customers' needs, attitudes, preferences and
buying behavior. Grant Canyon University notes that consumer research can also keep small

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businesses from making costly mistakes, such as developing products that nobody wants or
needs. At the same time, it enables them to understand and predict customer behavior in the
marketplace. This information allows them to define and segment their target markets, create
buyer personas and maximize their advertising dollars.

When a brand is developing a new product, consumer research is conducted to understand what
consumers want or need in a product, what attributes are missing and what are they looking for?
An efficient survey software really makes it easy for organizations to conduct efficient research.
Consumer research is conducted to improve brand equity. A brand needs to know what
consumers think when buying a product or service offered by a brand. Every good business idea
needs efficient consumer research for it to be successful. Consumer insights are essential to
determine brand positioning among consumers. Consumer research is conducted to boost sales.
The objective of consumer research is to look into various territories of consumer psychology
and understand their buying pattern, what kind of packaging they like and other similar attributes
that help brands to sell their products and services better. For example, queues has always been a
nightmare at any service point, hence, trying to minimise or reduce number of clients queueing
for a service most service providers like banks has introduced mobile banking applications, food
outlets has introduced drive through outlets or dial delivery services.

Consumer research techniques to provide systematic information about what customers need.
Using this information brands can make changes in their products and services, making them
more customer-centric thereby increasing customer satisfaction. This will in turn help to boost
business. An organization that has an in-depth understanding about the customer decision-
making process, is most likely to design a product, put a certain price tag to it, establish
distribution centers and promote a product based on consumer research insights such that it
produces increased consumer interest and purchases. For example, a consumer Union Hardware
wants to understand, thought process of a consumer when purchasing an electronic device, which
can help a company to launch new products, manage the supply of the stock, etc. Carrying out a
Consumer electronics survey can be useful to understand the market demand, understand the
flaws in their product and also find out issues in the various processes that influence the purchase

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of their goods. A consumer electronics survey can be helpful to gather information about the
shopping experiences of consumers when purchasing electronics. Which can enable a company
to make well-informed and wise decisions regarding their products and services.

The process of consumer research started as an extension of the process of market research. As
the findings of market research is used to improve the decision-making capacity of an
organization or business, similar is with consumer research. The consumer research process can
be broken down into the following steps:
Develop research objectives: The first step to the consumer research process is to clearly define
the research objective, the purpose of research, why is the research being conducted, to
understand what? A clear statement of purpose can help emphasize the purpose.
Collect Secondary data: Collect secondary data first, it helps in understanding if research has
been conducted earlier and if there are any pieces of evidence related to the subject matter that
can be used by an organization to make informed decisions regarding consumers.
Primary Research: In primary research organizations or businesses collect their own data or
employ a third party to collect data on their behalf. This research makes use of various data
collection methods (qualitative and quantitative) that helps researchers collect data first hand.
Collect and analyze data: Data is collected and analyzed and inference is drawn to understand
consumer behavior and purchase pattern.
Prepare report: Finally, a report is prepared for all the findings by analyzing data collected so
that organizations are able to make informed decisions and think of all probabilities related to
consumer behavior. By putting the study into practice, organizations can become customer-
centric and manufacture products or render services that will help them achieve excellent
customer satisfaction.

Once you have been able to successfully carry out the consumer research process, investigate
and break paradigms. What consumers need should be a part of market research and should be
carried out regularly. Consumer research provides more in-depth information about the needs,
wants, expectations and behavior analytics of clients. By identifying this information
successfully, strategies that are used to attract consumers can be made better and businesses can

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 make a profit by knowing what consumers want exactly. It is also important to understand and
know thoroughly the buying behavior of consumers to know their attitude towards brands and
products. The identification of consumer needs, as well as their preferences, allows a business to
adapt to new business and develop a detailed marketing plan that will surely work. The following
pointers can help. Completing this process will help you:
 Attract more customers
 Set the best price for your products
 Create the right marketing message
 Increase the quantity that satisfies the demand of its clients
 Increase the frequency of visits to their clients
 Increase your sales
 Reduce costs
 Refine your approach to customer service.

Launching a product or offering new services can be quite an exciting time for a brand.
However, there are a lot of aspects that need to be taken into consideration while a brand has
something new to offer to consumers. Here is where consumer research plays a pivotal role. The
importance of consumer research cannot be emphasized more.

 To understand market readiness: However good a product or service may be,

consumers have to be ready to accept it. Creating a product requires investments which in
return expect Return On Investment from product or service purchases. However, if a
market is mature enough to accept this utility, it has a low chance of succeeding by
tapping into market potential. Therefore, before launching a product or service,
organizations need to conduct consumer research, to understand if people are ready to
spend on the utility it provides.
 Identify target consumers: By conducting consumer research, brands and organizations
can understand their target market based on geographic segmentation and know who
exactly is interested in buying their products. According to the data or feedback received
from the consumer, research brands can even customize their marketing and branding
approach to better appeal to the specific consumer segment.
 Product/Service updates through feedback: Conducting consumer research, provides
valuable feedback from consumers about the attributes and features of products and
services. This feedback enables organizations to understand consumer perception and
provide a more suitable solution based on actual market needs which helps them tweak
their offering to perfection.

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Consumers are the reason for a business to run and flourish. Gathering enough information about
consumers is never going to hurt any business, in fact, it will only add up to the information a
business would need to associate with its consumers and manufacture products that will help
their business refine and grow.

4. Using practical examples, explain the role and relevance of customer psychology in
understanding the behavior of customers.

Consumer Psychology is the study of human behavior, regarding their buying patterns, customs
and preferences, in relation to consumer products, including their reactions and preferences to
advertising, packaging and marketing of those products. Consumer behavior is the study of
consumers and the processes they use to choose, use (consume), and dispose of products and
services, including consumers’ emotional, mental, and behavioral responses. Consumer
psychology is a field of study drawing on many disciplines, including social psychology,
marketing, behavioral economics, and other areas to assist with understanding consumers.
Consumer psychology concepts aim to evaluate and understand consumers and the decision-
making process. Psychological factors influencing consumer behavior such as demographics,
personality, lifestyles, and behavioral variables like usage rates, usage occasion, loyalty, brand
advocacy, and willingness to provide referrals are all studied in market research. Psychological
determinants of consumer behavior include motives, the manner of attitude perception, learning,
habits and manners, personality, tendency to risk, and lifestyle.

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Much of the connection between psychology and consumerism is attributed to Walter Dill Scott
and his studies in the early 1900s. As director of the Psychological Laboratory at Northwestern,
Scott was approached by an advertising executive looking to improve his marketing efforts. Scott
first wrote about the conjoined subject in 1903 with his book The Psychology of Advertising in
Theory and Practice, and continued to focus on the application of scientific knowledge in
business problems. Scott devoted the latter part of his career in researching methods of social
control and human motivation.

Consumer behavior and psychology continued to emerge in the 1940s and 50s as a distinct sub-
discipline in the marketing area. At the end of the 1950s, two important reports criticized
marketing for its lack of methodological rigor, especially the failure to adopt mathematically-
oriented behavioral science research methods. From the 1950s, mainstream marketing began to
shift its reliance away from economics and towards other disciplines. This notably included the
behavioral sciences, including sociology, anthropology and clinical psychology. This
combination brought about a new emphasis on the customer as a unit of analysis. As a result,
new substantive knowledge was added to the marketing discipline. This included such ideas as
opinion leadership, reference groups, and brand loyalty.

Market segmentation, especially demographic segmentation based on the socioeconomic status

index and household life-cycle, also became fashionable. With the addition of consumer
behavior and psychology, the marketing discipline exhibited increasing scientific sophistication
concerning the development and testing procedures of consumer psychology theories. More
recently, scholars have added a new set of tools like ethnography, photo-elicitation techniques
and phenomenological interviewing. Today, consumer behavior is regarded as an important
discipline within marketing and is included as a unit of study in almost all entry-level marketing
programs.

Understanding psychological factors affecting consumer behavior is a key challenge for

marketers and business owners. Research on consumer behavior is concerned with understanding

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how purchase decisions are made, who buys certain products, and how products or services are
consumed or experienced. Research has shown that psychology’s role in consumer culture may
be difficult to predict, even for experts in the field. However, new research methods such as
ethnography and consumer neuroscience are shedding fresh light on how consumers make
decisions, especially in assessing the intention-action gap, that is, the difference between what
consumers say and what they actually do.

Social Marketing, Customized Marketing, brand-name shopping, and the consumer’s perception
of the price of the commodity (directly expressed as the consumer’s sensitivity to price), are all
main factors for understanding consumer attitudes and help explain the reaction of market
demand to price changes. Furthermore, developing a good relationship with the target audience
is essential for brand management. Tangible elements of brand management, include the product
or service itself, its look, price, and packaging. The intangible elements are experiences that
consumers share with the brand, and also the relationships they have with the brand’s products or
services. This market research can help brand managers design the most effective and positive
brand and advertising strategy.

Psychological determinants of consumer behavior or the consumer’s underlying motivation drive

consumer action. This process can include information search and the purchase decision. The
consumer’s attitude to a brand (or brand preference) is described as a link between the brand and
a purchase motivation. Consumer behavior psychology motivations may be negative: that is to
avoid pain or unpleasantness. Motivations can also be positive: that is to achieve some type of
reward such as sensory gratification.

One approach to understanding both types of motivations was developed by Abraham Maslow.
Maslow’s hierarchy of needs describes five levels of needs based on the level of importance.
Maslow’s approach is a generalized model for understanding human motivations in a wide
variety of contexts. The application of Maslow’s model to this field shows the close connection
between social psychology and theories of consumer culture. Another approach proposes eight
purchase motivations, including five negative motives and three positive ones.

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In marketing literature, the consumer’s motivation to search for information and engagement in
the purchase decision-making process is sometimes known as ‘involvement.’ Purchase decisions
are classified as ‘low involvement’ when consumers suffer a small psycho-social loss if they
make a poor decision. A purchase decision is classified as high involvement when psycho-social
risks are perceived to be relatively high. The consumer’s level of involvement depends on
several factors. These can include the perceived risk of negative consequences in the event of a
poor decision, the product category, the social visibility of the product, and the consumer’s prior
experience with the category.

Some theorists have argued that certain fundamental decision-making styles can be
identified. Sproles and Kendall (1986) developed a consumer psychology theory consisting of
eight factors in the decision-making process. These factors include price-sensitivity, quality-
consciousness, brand-consciousness, novelty-seeking, fashion-consciousness, and habit. Based
on these factors, the authors developed a typology of eight distinct decision-making styles. These
include the ‘Quality conscious or Perfectionist’ style, the ‘Brand-conscious’ style, the
‘Recreation-conscious or Hedonistic’ style, and the ‘Price-conscious’ style. Also included are the
‘Novelty or fashion-conscious’ style, the ‘Impulsive’ style, the ‘Confused (by too many choices)’
style, and the ‘Habitual or brand loyal’ decision-making style.

Market research into the psychological factors affecting consumer behavior can inform how
marketers and brand managers invest their time and money. Brand managers create strategies to
convert a suspect to prospect, prospect to buyer, buyer to customer, and customer to brand
advocates. Brand management aims to create an emotional connection between the company, its
products and services, and their customers and constituents. Brand managers and marketing
managers may try to control the brand image, and understanding the importance of consumer
psychology can help with these decisions.

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CICRM Customer Psychology Module

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