Customer Behaviour: An Overview

 Introduction to Customer Behaviour

Customer behaviour can be defined as the branch of study involving persons, groups, or organisations and all activities concerning the buying, consumption, & disposal of services and products. It also studies how consumers' emotions, attitudes, and preferences influence purchasing patterns. Customer behaviour began as a sub-area of marketing during the 1950s but has evolved into a cross-disciplinary social study science that incorporates elements of sociology, psychology, social anthropology, ethnography, anthropology, marketing, & economics (behavioural economics).

To understand and analyse people's wants and consumption patterns, this branch of study formally examines individual features like personality, demographics, and lifestyles, along with behavioural variables (like usage rates, loyalty, usage occasion, brand advocacy, & willingness to give referrals). One will also investigate influencing factors on the consumers from societal groups like family members, friends, sportspeople, product attributes, and general society (brand influencers, consultants, and thought leaders).

Even professionals in the industry have discovered that predicting consumers' behaviours could be challenging; however, emerging research methodologies like ethnography, machine learning, customer neuroscience, etc., reveal new insights into how people make decisions. CRM databases have also become a valuable resource for customer behaviour analysis. The comprehensive data generated by these details allow for in-depth analysis of behavioural elements that influence customer repurchase intentions, customer retention, loyalty, & behavioural intentions like readiness to provide positive referrals and recommendations, become brand ambassadors, or indulge in activities enhancing customer behaviour. Databases can also help with market segmentation, particularly behavioural segmentation, including developing loyalty groups, which help to construct person-to-person marketing tactics that are highly targeted and personalised.

Customer behaviour in Purchase Decision making

According to customer behaviour research conducted in the past fifty years, the buying procedure of customers is generally divided into five stages:

Recognition of the problem:

This is the first step in purchase decision-making. It is also called need arousal or category need. At this stage, the customer recognises a need, often described as the gap between the customer's existing situation and their desired situation. The easiest way to understand this customer behaviour is that consumers look for a service/product that satisfies their certain wants or needs. The magnitude of the basic need drives the overall decision-making process.

Theorists distinguish three problem-solving situations that are significant to purchase decisions:

1.  Extensive problem solving (EPS): Purchases that necessitate more thought, a more thorough information search, and a comparison of alternative options. These are usually high-priced or high social presence purchases, such as fashion or automobiles.
2.  Limited problem solving (LPS): Purchases of well-known/familiar services or products, purchases made regularly, and purchases repurchases. Cheap items. Buying a second-hand TV for home is an example.
3.  Routinised problem solving (RPS): Purchases made regularly (habitual purchases). Stationery and cool drinks are examples of such purchases.

Consumers learn about a problem in various ways, such as:

• Natural Depletion or not in stock: When a person must replenish the stock of an essential item, such as milk, flour, or bread that has run out.
• Regular Purchase: The necessity to purchase an item regularly, like periodicals or newspapers.
• Dissatisfaction: If a customer is unhappy with a product or service they are currently using.
• New Wants or Needs: Lifestyle changes might lead to the discovery of new requirements and demands, like the requirement for cribs, strollers, or car seats when a baby is born.
• Related products (Additional): The buying of products can result in the demand for additional accessories, complementary services, and spare parts, such as ink cartridges if you are purchasing printers and memory cards if you are buying a DSLR.
• Marketer-induced: When a marketing campaign induces people to think that there exists a problem (persuasion marketing), generally a problem the consumers never realised they had). Consumption of traditional & social media content has a significant role in recognising consumers' needs.
• New Categories or Products: When customers become interested in new, innovative items that provide a better way to fulfil a need. 

Information search

At this phase, the customer goes through multiple steps to narrow down a litany of items or (brands) that are viable buying options. Typically, people search or perform a memory scan for relevant brand names. The evoked/recalled items consist of brands or products that consumers can recollect from memory. It is a small collection of three to five options. Consumers can increase the brands or labels in the recalled set by conducting a detailed external search, employing resources like the Internet, brand websites, product reviews, YouTube videos, peer recommendations, etc.

Even if consumers are familiar with/her favourite brand, it does not imply a probable purchase. These are mostly ruled out of the choices. Consumers may have mixed opinions about other brands. As the buyer gets closer to buying, they narrow the massive list of manufacturers to a list of choices that reflect viable purchasing options. The choice set is thus created, comprising the choices fierce competitors offer for purchase. 

Evaluating alternatives

In customer behaviour studies, evaluation is considered a separate stage. Furthermore, evaluation might take place at any time within the decision-making process. Consumers assess alternatives based upon the functional (known as utilitarian) & psycho-social (value-expressive / symbolic) advantages they offer. The tangible benefits consumers may endure, such as flavour or physical attractiveness, are functional benefits. The more intangible outcomes or personality-related features of the brand, like the social value gained by flaunting a costly suit, luxury label, or owning an expensive car, are the psycho-social advantages. Brand image is a critical psycho-social element. Consumers can hold both favourable and negative attitudes toward a certain brand. Most studies show that customers like companies with personalities like their own and that a close match can influence brand preference, choice, brand commitment, & loyalty to give positive referrals.

The customer assesses or ranks the merits and demerits of several options available when they evaluate. Consumers do not employ a universal evaluation procedure in all buying scenarios. Instead, customers develop alternative evaluation criteria depending on the specific purchase situation. In this technology era, one should also consider digital customer behaviour. Consumers also look up social media reviews on the products they seek to purchase. This allows customers to assess the pros and cons of each option and make a more informed decision about which product to purchase. And the evaluation attributes differ depending on consumers and the purchasing context.

Buying decisions

The decision to buy is the fourth step of the customer decision-making procedure. It is at this stage that the purchase is made. Consumers may buy the most desired brand after weighing all the options during this phase. The customer must make the following decisions at this stage: 

• From which brand they should purchase. This could be swayed by price, brand value, terms of sale, return policy, etc.
• One determines when and where to purchase by the store atmosphere, time demands and limits, sales, and the customer experience.

According to Philip Kotler and Jha, two factors can influence the ultimate purchasing decision:

Negative comments from others and our urge to comply with or accept them. For instance, one may decide to buy a Nikon D3500 DSLR camera after getting through the recognition of the problem, information search, & alternative evaluation steps; however, a good photographer mate may provide negative comments, which could substantially impact personal preference.

Post-Purchase customer behaviour (evaluation)

The last phase of the customer decision procedure is post-purchase behaviour, wherein the customers evaluate whether they are happy or unhappy with the purchase. Purchase & post-purchase behaviours of consumers provide valuable feedback to brands and marketers. Post-purchase feedback, according to Foxall, is important since it impacts future purchase choices and patterns of consumption. Cognitive dissonance, a sort of customer regret, is common in this phase. The buyer may experience psychological strain or anxiety as a purchase outcome. The customer, for example, may feel pressured to evaluate if he has made the best decision possible. One might introduce them to advertisements for rival brands or products, which might doubt the purchased product. Customers might also change their minds and feel they no longer need the product. 

Some businesses are now using post-purchase communication strategies to influence the customers' feelings towards their purchases & future purchases. Offering cash-back assurances and guarantees also help to expand and improve the manufacturer's post-purchase relationships with its customers. Other strategies include VIP invitations and offering to join a club or exclusive group of customers who buy specific products. Another strategy is asking customers their contact details during purchase to contact them later with a survey on customer satisfaction.

Things that influence customer behaviour

 Emotions and Motivations

Customer behaviour drives customer activities like information search & buying decisions. The customer's preference for the brand is largely influenced by purchase motivation. The motivations can be negative (such as avoiding pain or discomfort) or positive (such as obtaining a reward). 

Abraham Maslow established one framework for understanding motivations. He developed a need hierarchy divided into five levels based on importance.

1.  Physiological needs: These are biological needs like food, water, shelter, clothes, etc. According to Maslow, physiological requirements remain essential because all other needs are supplementary until one achieves these.
2.  Safety needs: Once the physiological needs are met, safety and security come second. In their daily lives, people seek order, predictability, & control. These requirements can be met by the parents and society (e.g. police, business, schools, & medical care). 
3.  Love and belongingness needs: The third degree is social, which includes feelings of belonging. An emotional need for social relations, affiliating, and togetherness is belongingness.
4.  Esteem needs: Self-worth, accomplishment, and respect comprise the fourth level of Maslow's hierarchy needs. Maslow divided esteem needs into two categories: self-esteem (dignity, accomplishment, leadership, independence) & reputation from others (for example, status, prestige)
5.  Self-actualisation: The highest level in Maslow's hierarchy, self-actualisation needs, include the realisation of a person's ability, personal growth, self-fulfil and peak experiences. 

Perception

 Individuals receive, organise, and analyse information for purchase. Sensing information, collecting information, & interpreting information are the three processes involved in perception. The sensation directly connects to sensory responses that create a reaction to brands, advertising, and packaging. Perception is a personal procedure, and it is dependent on various internal and external elements, including experiences, hopes, needs, and money.

Prior Experience

Recent research in customer behaviour in marketing management suggests that previous experience with brands, categories, or products could significantly impact purchase decisions. Consumers with more experience are more intelligent; they're more skilled information searchers, refer to wider sources, and evaluate purchasing alternatives using complex heuristics. However, Novice customers are poor information seekers, and, due to their lack of familiarity, they experience higher risk. Consumers with prior experience are less motivated to seek information, don't spend more time searching for information and absorb new information quickly.

Culture

An abstract external factor affecting customer behaviour, culture impacts almost all aspects of a purchase. It affects core psychological dimensions, including self-identity & motivation. This can also influence how someone understands information and interprets advertisements. Marketers who want to expand globally are keen to learn about cross-cultural distinctions in purchase and consumption. For example, Ferrari discovered that Chinese buyers differ considerably from those in the West. Whereas customers in the United States, the United Kingdom, or Australia might wait a year for a custom-built Ferrari, Chinese buyers choose to drive their favourite car right out of the showroom.

Social Class

 Social class is one of the factors influencing customer behaviour and purchasing habits. The extent of disposable income of each socioeconomic class is perhaps the most visible influence. The wealthy can generally afford to purchase more and more customer articles of superior quality than those with lower income. In addition, we can find a distinction in the purchased items. The upper class, for example, is the principal purchaser of expensive jewellery and frequently shops at exclusive stores. The lower class is more preoccupied with merely getting by; they may emphasise essential needs more.

Opinion leaders

 Customers always seek the opinion of competent friends or colleagues who can supply information, offer advice, or make the final decision. Professional thought leaders will easily identify certain product categories, such as car mechanics, stockbrokers, beauticians, and physicians. Inside their areas of expertise, all these professionals can influence customer decisions. These influencers may be individuals or groups called reference groups.

Conclusion

 Today the market is active and vibrant with various customer behaviours. To run a successful business, one must understand different types of customer behaviour. So, for success, one must understand customer behaviour in marketing. 

Customer behaviour is not a stationary phenomenon. So, one must adapt to changing customer behaviour models. But, the basics remain the same. As a result, the five buying procedures discussed above remain the same. And understanding it would help you get an idea about customer behaviour in marketing.