Factors affecting buying behaviour

A Take- Home Assignment for
EC 50011 Market Planning in a Global Environment

In considering the development of international consumer
markets it is important to take into account factors
influencing buying behaviour

Submitted To
Dr. Sushil Mohan

University of Dundee

Submitted On
March 2012

By

Luu Thi Huong Giang 120000829
Swapnil Mali 120004897
Katharina Weber 120006194

Contents
List of figures

1. ...
2. Consumer market and consumer behaviour.....................................................................1
3. Factors influencing decision making.................................................................................2
3.1 Cultural influences....................................................................................................3
3.2 Social influences.........................................................................................................3
3.2.1 Reference groups............................................................................................3
3.2.2 Family influences............................................................................................4
3.2.3 Social class......................................................................................................4
3.3 Personal influences....................................................................................................4
3.4 Pschycological influences..........................................................................................6
3.5 Buyer...........................................................................................................................7
4. Conclusions...........................................................................................................................8
References...............................................................................................................................9
Appendix.................................................................................................................................11

List of figures

Fig. Number Name of figure Page No.

1 1

2 The consumer buying process 2

3.1 Internal and external factors in decision making 5

3.2 6

3.3 8

EC 50011 Market Planning in a Global Environment 2012

1. Introduction

When travelling through different countries, one can recognize that one and the same product
known from home sometimes appear to have different a brand name in another country. For
example, someone who is craving for ice cream during a hot summer day could experience
relief from the famous ice cream brand n the UK, India, or Vietnam. The same ice
cream would be found in Germany as Langnese, as Frigo in Spain, and as Eskimo in
Romania.

In order to understand why companies make use of different brand names we have to realize
that the core of marketing aims at satisfying the needs of customers. These needs and wants of
costumers are influenced by many factors which influence the consumer buying behaviour.

In the following we will take a deeper look at these factors and explain why they need to be
taken into account when developing international consumer markets.

Fig. 1:

2. Consumer Market and Consumer Behaviour

Consumer markets are the markets of products and services which are purchased by
individuals or households for their own consumption (Tutor To U, n.d.). The mental and
social processes to make purchase decisions are called consumer behaviour. For marketers, it
is essential to understand the needs of customers as it helps a company to develop the
marketing strategy which is advantageous over competitors who have not identified these
needs (Lancaster & Massingham, 1993). When a firm wants to expand to new countries it is
necessary that it recognises the different factors that can influence whether a customer is
interested in a product.

1
Influences on buying behaviour in international consumer markets


The consumer buying process is divided into five steps: Need Recognition, Information
Search, Evaluation of Alternatives, Purchase, and Post-Purchase Behaviour. Need
Recognition is the perceiving of the unfulfilled desire. So marketing helps customers to
recognize the imbalance between present status and preferred state. Then customers start
information search, by recalling their memory or using external sources such as internet, TV,
newspapers, friends, etc. After having acquired some alternatives, customers compare the
value and the attributes of products so that finally they come to the decision to purchase the
most attractive option they have. At this step, marketing determines which attributes are the
most important in influencing a consumer's choice. The final step is post-purchase, at which
the consumers compare the experience of using the product to their expectations of the
product's performance, or they do further purchases. It is common that the consumers can
experience concern or anxiety about their purchasing decisions. Consumers might experience
the uncomfortable psychological state of
purchase would have been preferable (Festinger, 1957). To avoid that consumers will switch to a
different brand as a result, aftersales services (ads, follow-up calls, guarantee, etc.) should be
used by marketers to convince the customers that they have made the right decision.

Information Evaluate Purchase
Problem or need Purchase Option
Search Decision

Fig. 2: The consumer buying process

3. Factors in decision making

Decision making is a process dependent on many factors which vary from person to person
and also from region to region. Consumers are living in a society which follows its own
culture and values. Personal preferences again change with age, lifestyle, income, and
psychological factors.

2


3.1 Culture influences

According to Kotler
behaviour. Brewster, Sparrow, and Vernon (2007) define

distinct way of life with common values, attitudes and behaviours that are transmitted over
time in a gradual, yet dyna
and already has a large impact on children as they grow up. People growing up in an
individualistic culture may hold different aspirations, values, and needs than people who live
in a collectivistic culture. Whereas individualistic cultures focus on achieving personal goals,
collectivistic cultures centre on family and group well-being (Hofstede, n.d.). However,
cultural values can change over time and have to be watched by marketers. One example is
the change of the role of women in most Western societies.

Simply ignoring cultural factors can be costly for firms. As for example Starbucks had to

palace because it clashed with the Chinese cultural value of protecting this nation symbol
(Reuters, 2007).

3.2 Social influences

Consumer buying behaviours are clearly affected by social influences such as reference
groups, family members, and social class.

3.2.1 Reference groups

values, opinions, attitudes, and
behaviour patterns (American Marketing Association Dictionary, 1995). They can be divided
into different forms:

Aspiration reference group: It is a group of people against whom one tends to compare
oneself (Perner, n.d.). Many international firms have chosen celebrities as their
spokespersons or performers in advertisements1.

1
Recent researches have shown that there was a 20% increase on the sales of some brands
upon starting an endorsement deal and the stock of some companies has increased by 0.25%
on the day the deal was announced (Crutchfield, 2010).
3


Associative reference group: The group to which one actually belongs (a group of
friends, co-workers, a club, etc. s
linked to appropria (Wayne & Deborah, 2009)
Dissociative reference group: The group to which one maintains a distance due to
differences in values or behaviours. The store brand name Gap because
many younger people wanted to dissociate from parents and other older people
(Perner, n.d.)

3.2.2 Family influences

behaviour resulting from consumer
socialization, family life cycle and family decision making.

Consumer socialization: Family plays an essential part in the processes through which
family members acquire the skills, knowledge and attitudes necessary to their
functioning as a customer in the marketplace (Consumer behaviour, n.d.)
Family life cycle: Every individual has to go through a family life cycle. Each stage
determines different purchasing behaviours. Newly married couples show more
interest in travelling services while the full-nest households tend to be greater
interested in quality and timesaving products. (Family life cycle, 2010).
Family decision making: There are two types: spouse-dominant (decisions are made
by either wife of husband), or joint decision making (both wife and husband are
responsible for making decisions). Recently the role of children as decision-makers
has changed significantly. Many firms have tried to capture the market of which target
customers are children. It is well known that Disney has been particularly good at
interactive promotional marketing (Buyer behaviour, n.d.)

3.2.3 Social class

Social classes are determined by occupation, income, education, wealth, and other variables.
People within a given social class tend to possess the identical buying behaviours, which
make it easier for marketers to place target in specific social class. For example the consumers
in lower classes tend to be more brand loyalty than wealthier consumers (Rofianto, n.d.).

3.3 Personal influences

Every person is different and so is buying behaviour. This is because of different factors such

4


as age and sex of consumers, occupation and economic circumstances which again influence
the lifestyle of consumers. These factors can be divided as internal and external factors.
Personality is not just about what a person is, but also about what a person wants to be.

Internal
Memory
Way of thinking

External

Media, Mouth
publicity, Feedback

Fig. 3.1: Internal and external factors in decision making

. A simple example is that men purchase
different things than women. Studies proved that women tend to spend more than men (Pant,
2011). Therefore, special care should be taken when marketing women products which allow
companies to generate extra profit.

Younger generations prefer spending over saving (Mathur & Moschis, 2007) and tend to
spend more on technological products than on other things. As per life cycle, preferences do
change too. E.g. undergraduates go for casual wears over formal wears. This shows the
importance of demographic studies of the market in order to do better marketing.

The economic life cycle is another aspect to be considered. It was observed that many people
shifted to lower priced packaged food during recession. They found that the food was really
better than they expected. This made them to stick with the same product even after recovery
(Consumers and economic trends, 2011).

External factors depict the personality a consumer would like to achieve. E.g. consumers
think that cars may reflect personality. Even if a person is happy with a small car, he may opt
for a bigger one. In day to day life some decisions are taken as per the situations which are
called situational effects, the circumstances surrounding our purchases that may strongly

5


impact our decision-making process (Higgins, n. d.). When a man goes out on a date with his
partner, he will prefer to spend more and tries to make his day more luxurious than a routine
one. So in order to earn more profit, studies of these internal and external factors are
necessary.

3.4 Psychological influences

The four key psychological factors which influence consumer behaviour are motivation,
perception, learning, and memory (Kotler & Keller, 2006).
Motivation is the process that initiates, directs and sustains goal-oriented behaviours. A
motive can be defined as a drive to satisfy a need (MMC Learning, 2009). Maslow's
Hierarchy of Needs simplified suggests that we need to satisfy a lower level need before we
are motivated to satisfy a higher level need. Marketers try to understand the specific needs of
their consumers so the consumers will prefer their products over those of competitors.

Self-
actualization
needs
Esteem Needs

Social Needs

Safety Needs

Physiological Needs

Figure 3.2

Perception is the way in which people, select, organize and interpret stimuli in order to
acquire a meaningful picture (Lancaster & Massingham, 1993). What information we
perceive out of the large pool of information depends among others on our current beliefs and

Customers even distort information when they are not coherent with prior beliefs about
products and brands in order to reduce cognitive dissonance (Festinger, 1957). Support for
this effect comes from a study (Russo, Medvec, and Meloy, 1996) which found that already
the weakest form of a brand preference, i.e. a developing preference in the absence of an

6


existing preference, can result in a confirmation bias towards that brand. If for example a
foreign chocolate fabricant wants to enter the UK market, it has
established competitor which consumers might still prefer despite the better quality of the
foreign brand.
Learning occurs whenever people act. It is the change in behaviour resulting from experience
(Kotler & Ketler, 2006).
and is satisfied with it might again choose the same brand when in need of another electronic
device.
-term-
memory. The challenge for marketers is to create good experiences to establish their brand in

Even though it is costly and time intensive to study how psychological factors are influencing
the buyer behaviour, they are unavoidable for marketing success when developing
international consumer markets.

3.5 Buyer

Whereas some day to day buying decisions are done within seconds, other decisions like
buying a car take a lot of time. These behaviours can be classified as high and low risk
decisions (see Appendix, Table1: Purchasing situation and buyers decisions).
All the above mentioned factors affect buying behaviour. From the marketing point of view,
firms must consider all these aspects and try to market their product accordingly. On the basis
of research conclusions, marketing strategy is formed by the firm. But at the end of the day it
is the consumer who is going to react in his unique way to these factors and decides what to
buy and what not.

7


Perception Marketing Research Inforamtion

Culture Strategy Choices

Beliefs Preferences

Consumer
Society Communication

Personality

Fig.3.3: Influencing factors in buyers/ consumers decisions

4. Conclusions

Each person has his / her own behaviour towards the purchasing process; however they are
influenced by certain factors. Those influences can be environmental influences (cultural,
social influences) or individual influences (personal, psychological influences). The cultural
values are shared between people in a society and affect them gradually over time. Besides,
the society has
one belongs. Each individual also has their own effects varying from age and sex or the
process of perceiving, learning, motivating and memorizing. Those factors affect the
consumer buying decision so they should be considered. The buyers themselves are the
decision makers and the most important factors in the consumer market. When a firm wants to
enter a foreign market, the local customer behaviour is probably different from the customer
behaviour they are dealing with in the home country. As a result, it is important for the
marketing manager to take into account all those factors, helping them to develop the
marketing campaign in the international market and to improve the product to fully satisfy
customers which ultimately leads an increase in sales.

8


References

American Marketing Association Dictionary, 1995, viewed 18 March 2012,<http://www.
marketingpower.com/layouts/Dictionary.aspx?dLetter=R>

Brewster C., Sparrow P., & Vernon G. (2007), International Human Resource Management
(2nd ed.). In, The impact of national cultures (pp.13-38).

Buyer behaviour - case study: influence of children on buyer behaviour, viewed 18 March
2012, <http://tutor2u.net/business/marketing/casestudy_%20buyers_children.asp>

Consumer behavior, viewed 18 March 2012, <http://www-rohan.sdsu.edu/~renglish/370/
notes/chapt05/>.

Consumers and economic trends, January 2011, Consumer spending habits and thrift in an
uncertain global economy, Viewed 19 March 2012, <http://blog.euromonitor.com/2011/01
/qa-the-thrift-lifestyle.html>

Crutchfield, D., 2010, Celebrity Endorsements Still Push Product, media release, 22
Setemper, viewed 18 March 2012, <http://adage.com/article/cmo-strategy/marketing-
celebrity-endorsements-push-product/146023/>

Family life cycle, 2010, media release, 29 January, viewed 18 March 2012, <http://american-
business.org/347-family-life-cycle.html>

Festinger L., 1957, A theory of Cognitive Dissonance Theory, Evanston, IL: Row and
Peterson

Higgins, n.d., Principles of marketing: An applied, collaborative learning approach, viewed
19 March 2012, <http://www.principlesofmarketing.com/Full.htm>

Hofstede G.(n.d.), National culture dimensions. Countries, viewed 19 March 2012
<http://geert-hofstede.com/national-culture.html>

Kotler P. & Keller K.L., 2006, Marketing Management 12e, Chapter 6, Pearson Prentice Hall.

9


Lancaster G & Massingham L., (1993), Essentials of Marketing, Second Edition, McGraw-
Hill Book Company

Mathur A.,Moschis G., 2007, Baby boomers and their parents, Page 110, viewed 19 March
2012

MMC Learning, 2009, Multi Media Marketing, Buyer Behaviour, Viewed 19 March 2012,
<http://www.multimediamarketing.com/mkc/buyerbehaviour/>

Pant P., July 2011, Women Trail in Budgeting and Saving, viewed 19 March 2012,
< http://budgeting.about.com/b/2011/07/19/women-trail-in-budgeting-and-saving.htm>

Perner L., n.d., Consumer behavior: The psychology of marketing, viewed 18 March 2012,
<http://www.consumerpsychologist.com/>

Reuters, 2007, Starbucks finds imperial palace a forbidding market, Viewed 19 March 2012,
<http://www.reuters.com/article/2007/07/14/us-china-starbucks-idUSPEK13229420070714>

Rofianto W., n.d., Social class, culture and consumer behavior, viewed 19 March 2012,
<http://rofianto.files.wordpress.com/2010/05/cb_week_09_social-class-culture-and-
consumer-behavior.pdf>

Sproul s.,1991,A buyer behaviour framework for the development and design of software
agents in e-commerce, viewed 19 March 2012,
<http://www.emeraldinsight.com/journals.htm?articleid=863689&show=html>.

Tutor To U, n.d., Types of Markets, viewed 19 March 2012,
<http://tutor2u.net/business/marketing/market_types.asp>

Wayne D., Deborah J., 2009, Consumer Behavior, viewed 18 March 2012.

10


Appendix

Table 1: Purchasing situation and buyers decisions

New Purchase Frequent purchase
High Risk Unstructured process, trying Structured process, risk
out new things, extensive reduction by opting familiar
information needed brands
Low risk Unstructured process, Very structured process with
minimum information long decision time, all
needed, generally go with feedbacks taken into account
others or market trends

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