Introducing Perception and Customer behavior

This week we were talking about buying decisions process, possibly the most challenging concept in marketing deals, why customers do what they do. In this part I will explore how we make consumption decisions and how many influences exerted by others in this process. But first..We can distinguish five roles which people play in a buying decision:

- INITIATOR The person who first suggest the idea of buying the product or service.

-INFLUENCER The person whose view or advice influences the decision.

-DECIDER The person decides on any component of a buying decision: whether to buy, what to buy, how to buy, or where to buy.

-BUYER The person who makes actual purchase.

-USER The person who consumes or uses the product or service.

Kotler’s decision-making process

Figure shows that the buyer decision process consists of five stages: need recognition, information search, evaluation of alternatives, purchase decision, post-purchase behaviour. Clearly buying decision process starts long before the actual purchase and continues long after. Marketers need to focus on the entire buying process rather then on just purchase decision.

The figure suggests that consumers pass through for all five stages with every purchase. But in more routine purchases, consumers often skip or reverse some of these stages. A female buying her regular brand of shampoo will recognise the need and go right to the purchase decision skipping information search and evaluation. However model shows all considerations that arise when consumer faces a new and complex purchase situation.

How valid is that perspective? While consumers do follow there decision-making steps when making some purchases, such as process is not an accurate portrayal of many of out decisions. Consumers simply do not go through this elaborate sequence every time they buy something. If they did, their entire lives would be spent making such decisions, leaving them every little time to enjoy the things they eventually decide to buy.

Some of our consumption behaviours simply don’t seem ‘rational’ because they don’t always seem to serve a logical purpose ( eg people who break to law to collect eggs of rare bird in Scotland called and osprey even though the eggs have no monetary value); other purchase behaviours are done with virtually no advance planning at all (e.g. impulsively grabbing that temting bar of chocolate at the checkout till while waiting to pay for the groceries). Still other actions are actually contrary to those predicted by rational models. For example, purchase momentum occurs when these initial impulses actually increase the likelihood that we buy even more (instead of less as our needs are satisfied) , almost as if we get caught up in a spending spree.

The Engel, Blackwell and Miniard model

The decision-making process is affected by number of other more complex influences, as can be seen on the chart. Some of these influences relate to the wider marketing environment in which the decision is being made. Others, however, relate to the individual purchaser and therefore will consider those influences emanating from within the individual such as personality, attitudes, and learning. Similarly, will look at how the individual’s decisions are affected by their social context, especially family and cultural groupings.

There have been many attempts to create models of consumer decision-making process of greater or lesser complexity and detail that try to capture the richness of the experience.

Perceived risk

In 1960 Raymond Bauer argued in what is now a classic paper that a large part of consumers’ behaviour could be understood as risk-taking behaviour. Specifically, Bauer argued that associated with any brand choice is the possibility of loss, e.g. financial, social, physical, and that “Consumers characteristically develop strategies and ways of reducing risk that enable them to act with relative confidence and ease in situations where their information is inadequate and the consequences of their actions are in some meaningful sense incalculable. Bauer’s paper was a stimulus for a decade of coordinated research at the Harvard Business School. This line of research, which has been labeled perceived risk, is one of the very few research traditions.

As a rule, purchase decisions that involve extensive search also entail some kind of perceived risk, or the belief that the product has potentially negative consequences. Perceived risk may be present if the product is expensive or is complex and difficult to understand, or if the product is unfamiliar. Mood effects on consumers’ attitudes and perceptions (link) about risk are stronger when brands are unfamiliar. Perceived risk can also be a factor when product choice is visible to others and we run the risk of embarrassment if the wrong choice is made. Here is excellent example of an advert

Perceptual set theory

Perceptual set theory stresses the idea of perception as an active process involving selection, inference and interpretation. Perceptual set is a bias or readiness to perceive certain aspects of available sensory data and to ignore others.

Set can be influenced by Expectation and Context

Minturn and Bruner(1951) showed the middle figure would be more likely to be perceived as a letter if presented amongst other letters and a number if presented amongst other numbers

12
A 3 C

14

Sources:

The structure of perceived risk: Some further progress

	Journal of the Academy of Marketing Science
	Thursday, October 25, 2007

Harvard Business Review