The Consumer Behaviour: Why do they buy?
Have you ever wondered why people buy? There is a lot of selling and buying in everyone’s life. But what makes them choose one over another?
Crystal walks into Jaya Grocer store after work. Her eyes locked at the snacks department. Without thinking much about it, she passes through the fruits and vegetables, personal care departments and goes straight to the snack department. What she doesn’t know is that the huge banner at the entrance stating “Buy 1 Free 1 for All Nestlé Snacks” makes her do that.
The consumer purchasing behaviour is very interesting as they often don’t realise that they are influenced by many external factors.
Do they need it or want it?
The line between need and want is clear but people usually mistake their wants for needs. Let’s say Crystal spends RM100 on daily necessities per week. But because of the Nestlé snacks promotion, she is out of budget and decides to buy less fruits and vegetables for that week.
Needs are the necessities, where one needs them to maintain a normal life. Examples of needs are food, shelter, clothes (enough amount), transportation and health care. While for wants, they are the products or services that improve life quality where one doesn’t require them to survive but it can bring joy to people’s lives. In this case, although fruits and vegetables are something that Crystal needs everyday, she still sacrifices them for Nestlé snacks.
Selling from the Customer’s Point of View: How to make them buy?
It is important to understand a buyer’s need when a salesperson is trying to sell.
Mike, a salesperson from ABC company sales team is looking for a software that can help to manage his company’s leads and improve their sales performance. What to do if the software company wants to make Mike buy their software?
First of all, they have to talk to Mike to understand his exact needs and problems, in order to offer better suggestions and solutions. By looking at the problem through the customer’s eyes, the seller will see a completely different view instead of trying hard to sell their product or service. However, that’s not the end as there are more factors influencing their buying decisions:
- Psychological – Human psychology is a significant indicator of consumer behaviour. Although such variables are hard to quantify, they are powerful enough to affect a person’s buying decision. Some psychological factors include motivation, perception, learning, attitude and belief.
- Social – Human beings are social creatures where many people around them act as influencers that affect their purchasing behaviour. They are often affected by people around them because they always attempt to imitate other human beings and even seek public acceptance in society. Variables under social factors include family and friends, peers, reference groups and roles and status.
- Cultural – Culture is defined as a group of people associated with a collection of beliefs and philosophies belonging to a specific society. If Mike comes from a community that believes a lead management software should be fully automated, he will be highly affected by that idea. Some cultural considerations include culture, sub-culture and social class.
- Personal – Examples of personal factors consist of age, income, occupation and lifestyle. These factors differ from person to person, thus resulting in different buyer attitudes behaviour.
- Economic – Lastly and most importantly, buyers consider economic factors before making a buying decision. When a country is in a good economic position, people have better buying power due to a greater money supply. So, buyers have more confidence in spending money for various products.
Understanding the Buyer-Decision Making Process
In 1968, Engel, Kollat and Blackwell developed a decision-making process model called EKB Model, as shown in the figure below.
There are two main parts with a total of five stages in the buyer decision-making process. The first part is about pre-purchasing decision-making processes consisting of need recognition, information search and alternative evaluation while the second part is the post-purchasing process that includes the actual purchasing decisions and post-purchase evaluation.
- Need Recognition – The first stage of the decision-making process starts with need recognition. In this stage, Mike is able to recognize what problem ABC company is facing, and what product or service would be able to solve the problem. When he is able to recognise his need, he will start to find ways to fulfil his need. To carry out the next step, he will have his own evaluation and eventually react positively or negatively towards the behaviour.
- Information Search – When the need for recognition is confirmed, Mike will start to search for information. Let’s say he is looking for lead management software, he will search for tech companies that provide this kind of product and service.
- Alternative Evaluation – While searching for information related to his needs, Mike will look for alternative choices that are also relevant to him. Therefore, online reviews and comments regarding the product or service act as an influence of society on consumers. People in society constantly share about their comments regarding a service or product, either positive or negative on social media platforms. Consequently, Mike is motivated to comply if he believes that the buying behaviour is positive when many people around him are doing so.
- Purchasing Decision – After considering the alternative choices, Mike finally starts to make judgments on his needs and decide whether to purchase, or not to purchase. So, before purchasing a product, Mike will evaluate the possible outcomes. If he believes that investing in an automated lead management software can improve ABC company’s business performance, he will be more likely to purchase it.
- Post-Purchase Evaluation – The last stage in the decision-making process would be the post-purchase evaluation. After purchasing a product or service, Mike evaluates the whole purchasing process and generates a positive or negative attitude towards the outcome. When the expectations are not met, he will react negatively; Otherwise, he will react favourably towards the outcome when his expectations are met or even exceeded. Sometimes, he will even repurchase the product or share his positive experience with other buyers if the lead management software is helpful.