1. Consumer Buying Behaviour
Lecture 2a
Chapter 2 (Sharp, 2013)

2. BHO1171 Slide 2
Definition
 “Consumer behaviour is about human responses in a
commercial world: how and why people buy and use
products, how they react to prices, advertising and
other promotional tools…”
(p2 East 1997)
 Consumer Behaviour draws from:
 Psychology
 Sociology
 Economics

3. BHO1171 Slide 3
Predicting consumer behaviour
Has proved to be notoriously difficult
 Consumers differ from one another
 Consumers have an enormous range of influences
acting upon them at any one time
Strong assumption toward attitude driving
behaviour in marketing

4. BHO1171 Slide 4
High-involvement decisions
Traditionally marketers have concentrated on
high involvement consumer decisions
Some buying decisions have greater
consequences than others, which encourages
us to be more thoughtful about them. Mostly
this occurs when:
• a consumer buys from a category for the first time
• a consumer has an intense interest in the category
• a poor decision would have substantial consequences

5. BHO1171 Slide 5
Consumer Decision Making
Assumption in marketing that consumers
make highly involved, rational decisions:
 High involvement consumer decision making
process:
Need
Recognition
Post
Purchase
Evaluation
Purchase
Decision
Evaluation
of
Alternatives
Information
Search

6. BHO1171 Slide 6
High-involvement decisions
 Some consumers might be highly involved in their
decisions
• Most won’t be
 High involvement decisions tend to be for
products with large financial consequences
• Cars
• Home loans.
 Surprisingly, even in these potentially high-
involvement categories, buyers do far less careful
research than might be expected

7. BHO1171 Slide 7
Contrary to High Involvement
Empirical evidence suggests most buying is
repeat-buying.
Usually we have bought from that category
before
 we have probably bought that particular brand before
 We’ve probably bought from that store before
Consumers don’t want to be experts
 just want to be knowledgeable enough that they
don’t waste too much money or time making really
poor choices.

8. BHO1171 Slide 8
Knowledge is power
As a marketer, many of the daily marketing
decisions you make will be based on knowing:
• Who buys?
• Where?
• When?
• How much?
 It’s important to keep track of this descriptive data for
current and potential buyers:
• what they buy, what they watch and how consumption of
your brand fits into their lives.
 The best-educated marketers interpret these data in
light of known, law-like patterns.

9. BHO1171 Slide 9
Most buying is repeat-buying
Well-researched buying decisions do
sometimes occur, but rarely.
For the majority of brand buying and store
choice, habit and convenience drives our
behaviour.
Consumers form a stable repertoire of brands
or stores and repeatedly buy from them.

10. BHO1171 Slide 10
So customers buy at random?
 Customers seldom ever buy randomly, but instead show biased
purchasing, favouring some brands over others.
 Loyalty is everywhere
 Buyers restrict their purchases to a personal repertoire of brands.
 Brand loyalty is part of every market, even in so-called ‘commodity’
categories (such as rice or flour).

11. BHO1171 Slide 11
Many decisions are low
involvement
Many consumer purchases are highly
repetitive, low involvement decisions:
 ATR Model by Ehrenberg & Goodhardt (1980):
Awareness ReinforcementTrial
Fig 4.3, Jobber (2007)

12. BHO1171 Slide 12
The evidence for low involvement
 There are a number of scientific laws in marketing that
support low involvement over high involvement
consumer decision making:
 Double Jeopardy Effect
• E.g., Ehrenberg & Goodhardt (2002)
 Duplication of Purchase Law
• E.g., Dawes (2008)
 Dirichlet Theory
• Ehrenberg, Uncles & Goodhard (2002)
These suggest most consumer buying is
habitual in nature

13. BHO1171 Slide 13
People Behave Habitually
People behave with regular patterns in many
types of day-to-day behaviour
 Peter Fader Interview

14. BHO1171 Slide 14
The evidence for habit
1. Market structures
2. Duplication of purchase law
3. Double Jeopardy Effect

15. BHO1171 Slide 15
1. Market Structure
There are two markets:
 Subscription
• You subscribe to a brand for a period of time
• E.g. banks, insurance, ISPs, telephone
 Repertoire
• You cycle through a small number of brands on an ‘as-
if’ random basis
• FMCGs, etc
 See Sharp et al (2002)

16. BHO1171 Slide 16
2. Duplication of purchases
A brand’s customers buy other brands more
often than they buy the brand itself.
“Your buyers are buyers of other brands who
occasionally buy you” - Prof Ehrenberg.

17. BHO1171 Slide 17
2. Duplication of Purchase Law
 Duplication of purchase refers to the % of buyers of one
brand who purchase another brand.
 E.g 26% of Maxwell House instant coffee buyers also
bought Nescafe
 48% of Nescafe buyers also bought Maxwell House
 8% of Nescafe buyers also bought Maxim instant coffee
Consider your own purchases:
 Think about the last 5 fast food purchases you made
• It is very likely that most of you bought from more than one
fast food outlet.

18. BHO1171 Slide 18
The Leaky Bucket
New
category
buyers
Switching from
other brands
Defectors

19. BHO1171 Slide 19
3. Double Jeopardy effect

20. BHO1171 Slide 20
Natural loyalty
Loyalty without differentiation
 There is a notion that loyalty occurs because each
customer finds the brand that suits their needs
best and so then buys this rather than the other
options. This turns out to be an exaggeration, and
one that ignores the natural tendency for
customers to be loyal.

21. BHO1171 Slide 21
Prosaic, not passionate, loyalty
Why do buyers have such a strong tendency to
be loyal? And why is this loyalty polygamous?
 Consumers adopt brand loyalty as a strategy to
simplify their lives.
 Consumers don’t care about most of the many
brands that they buy.
 The big decision is whether or not to buy from that
product category.
 Consumers use loyalty to reduce their thinking, time,
effort and risk, usually without even realising they are
doing it.

22. BHO1171 Slide 22
Prosaic, not passionate, loyalty
Most of customers buy very infrequently.
 The brand is a small part of those customers’ lives
because they buy it so rarely.
Buying rates follow a known statistical
distribution, the negative binomial
distribution (NBD), which is typically very
skewed, so there are a few heavy buyers of
the brand and many, many light (occasional
buyers).

23. BHO1171 Slide 23
Prosaic, not passionate, loyalty

24. BHO1171 Slide 24
Prosaic, not passionate, loyalty
There are two reasons why most of a brand’s
customers are light:
Product categories have a lot of light buyers
• For example, most people travel on planes but only
once every few years (or decades), while a few people
travel very often.
Polygamous loyalty

25. BHO1171 Slide 25
Prosaic, not passionate, loyalty

26. BHO1171 Slide 26
The importance of memory
 Our buying relies heavily on our memory.
 Some brands embed themselves better in our memories
 They have a richer more relevant web of associations
 So they are easier to recall, recognise and even notice.
 Some choice situations depend heavily on recall, in
that we have to bring products or brands to mind
along with information on their features and suitability
for our needs at that moment.
 A brand that is not recalled has no chance of being
purchased, no matter how good it is.

27. BHO1171 Slide 27
How to build and refresh memory
Using existing memory associations
• Effective advertising often taps into existing memory
structures consumers have concerning the product category.
Linking verbal information with visual cues
• This is one reason why brands have characters (e.g. ‘Snap’,
‘Crackle’, and ‘Pop’ for Kellogg’s Rice Bubbles/Rice Krispies)
Making the information relevant to the person or
current situation

28. BHO1171 Slide 28
Why do consumers forget about
us?
Our marketing and our brand is ignored and
forgotten by most people most days.
 Even the mental availability we have built erodes
 competitive memory interference—consumer’s lives,
and the advertising of competitors, get in the way and
make it harder for consumers to retrieve memories of
our brands.
 When a brand stops advertising, it starts sinking in
memory. So there is an ongoing marketing task to
maintain mental availability, especially if competitors
advertise.

29. BHO1171 Slide 29
Broadbent (1989)
“Sales of a brand are like the height at which
an airplane flies. Advertising spend is like its
engines: while its engines are running
everything is fine, but when the engines
stop, the descent eventually starts”

30. BHO1171 Slide 30
Consumer motivations
 The ultimate reason why consumers buy a brand is
because it is a route to the benefits provided by the
product or service category overall.
 People buy Fords, Toyotas and Renaults because they
have a need for transportation: personal, convenient,
relatively safe, comfortable, affordable transportation.
 An extremely important part of marketing is
understanding consumers’ needs, and therefore the
benefits they seek.
 Buyers are seeking benefits not features. Marketers
have to point out clearly how their product’s features
deliver benefits.

31. BHO1171 Slide 31
Do our buyers like us?
 Marketing’s attitude problem
 Marketers very easily fall into the trap of seeing their
job as trying to change buyer’s attitudes. They can be
so conditioned to believe that behaviours will follow
attitudes that they forget their direct goal of changing
behaviours.
 Why behaviours don’t follow attitudes
 Brand attitudes reflect past buying behaviour
 Intentions reflect past buying behaviour
 Brand attitudes are probabilistic

32. BHO1171 Slide 32
So is the job of a marketer…
To try and change attitudes to change
consumer behaviour?
To try and reinforce consumer habits?

33. BHO1171 Slide 33
Classical & Operant Conditioning
 Marketers can use Classical
Conditioning techniques to
stimulate a behaviour
 Colours/shapes used in
packaging
 Music used in advertising
 Brand marques
 Using scents in retail settings
 Some consumers conditioned
to buy items “on sale”
 Marketers can use operant
conditioning techniques to
reinforce behaviour
 OC Considers immediate
consequences of behaviour
 Behaviour is modified over
time using positive and
negative consequences
• We modify our behaviour to
increase the chance of a
positive reinforcement
• We modify our behaviour to
reduce the chance of negative
punishment
 Skinner’s experiments

34. BHO1171 Slide 34
OC - Rewards and punishments
 Rewards increase, while punishments
reduce frequency of behaviour
 Companies try to make experiences with their
brand rewarding
 And avoid making it punishing!
 Loyalty and reward cards
 Marketers can change the environment
 Gambling

35. BHO1171 Slide 35
Involvement
 Food purchases are accepted as low involvement
 But purchases in a low involvement category can
be made high involvement with enough effort
 Can you think of any way it can be made high
involvement?
 Here are some examples that have worked in the
past:
• Jamie Oliver’s food revolution
• Supersize Me