Consumer behaviour is a complicated and diverse area of study. Since marketing is based on identifying, anticipating and providing customer needs it is important to understand them. There are two predominant types of buying: consumer buying, which consists of buying products for personal use, and organisational buying, which involves buying for organisational purposes. Consumer buying behaviour is defined as the buying behaviour of final consumers, individuals and households who purchase goods and services for personal consumption (Kotler et. al., 2001, pg. 858).
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Purpose of choosing this topic: For a marketer to satisfy customer needs efficiently and lucratively, understanding consumer behaviour is essential. Research into consumer behaviour allows the marketer to create target groups of people with common interests, values, beliefs and patterns of behaviour which will be discussed further in this proposal. Once a market segment has been identified, marketers can research the target market more thoroughly and the marketing mix, product, price, promotion and place can be adjusted to ensure the product position is correct.
2.0 Objective
This dissertation will identify the main factors influencing consumer behaviour patterns, particularly in textile retailing. It will examine how buyer characteristics influence buyer behaviour and also how retailers react to such characteristics. In particular this proposal will look at the cultural factors, demographic factors and psychological factors that influence consumer buying. Also, it will investigate on different types of buying behaviour that helps to find how and why consumers make their purchase decisions. It is vital to note that the purchase of a particular product does not always derive the same type of decision making behaviour (East, 1997: 19). For example, an affluent businessman who enjoys collecting cars may not undergo complex buying behaviour as opposed to an average earning salesman who is buying a car for transportation purposes.
3.0 Method
In order to achieve the objectives stated above, the research will utilise online survey and will consider the scope to which:
Online community members share their views on buying;
The sharing of pre-buying experience differs from the sharing of post-buying experience;
Comments made by third party and direct contact through an online community affect buying pattern;
Comments received on different company websites affect buying pattern.
Also, the research will utilise online database: Mintel and Emerald, and published material: books, articles on newspaper, magazines, or journals.
Feasibility
There is no purpose at this stage to employ any company information for preparing the dissertation. The author wants to ensure if he needs permission from the online community to approach individuals to take part in the survey. Participants will be at liberty to withdraw from the survey at any moment of time.
5.0 To what extend the existing published material meets the proposal
The dissertation intends to explore the knowledge of types and elements of buying behaviour that influence consumer buying behaviour such as cultural factors, demographic factors and psychological factors. This will significantly assist the marketers to invade the competitive market and come out with fruitful wings.
Complex
buying behaviour
Dissonance-reducing
buying behaviour
Habitual
buying behaviour
Variety-seeking
buying behaviourFigure A:
High Involvement Low Involvement
Significant differences
between brands
Few differences
between brands
Figure A shows the relationship between different types of consumer buying behaviour with the level of consumer involvement and the degrees of differences between brands. The level of involvement in a purchasing a product is related to the importance of the purchase, the risks involved and the type of cognitive processing that is generated (East, 1997: 19). It helps the marketer to keep a better hold on the competing market.
Culture affects consumer behaviour in a variety of ways. It relates to customs and beliefs that are learned from the society in which an individual grows up. Aspects of our socio-culture, such as sub-culture, social class and reference groups play different roles in influencing consumers. A common pattern of behaviour can be observed within groups. Cultural change occurs at a very slow pace and can be seen to marketers as threats or opportunities. Cultural elements that influence consumer behaviour can also be said to be environmental influences.
‘A reference group is one that the individual tends to use as the anchor point for evaluating his/her own beliefs and attitudes’ (American Marketing Association, 2004).
‘Sub-culture plays an important part to marketers because of their influence on brands and types of product and services demanded by their members’ (Chisnall, 1975, p.98). Mintel (2003) reports that an emerging youth sub-culture, in which extreme sports is the focal point. He estimates that consumers spent £4.5 billion on extreme sports goods in 2003, an increase of 29% on 1998. (See appendix 1, figure 3)
Demographic elements (ref Fig.7 appendix.3) can significantly affect consumer behaviour. As an individual’s stage of life progresses, so will the needs and wants of a product. To help marketers make a clearer distinction between demographic groups for market segmentation classification bases have been developed.
‘A Classification of Residential Neighbourhoods’ (ACORN) is a popular geo-demographic technique used as a segmentation base. ACORN maps geographically the concentrations of a particular type of individual and can be useful for helping marketers decide upon store locations and targeting direct mailing (Beaumont, 1989).
Lansing, J and Morgan, J (1955) have devised a popular and successful break down of the life cycle of families to successfully target a market. Each stage influences consumer behaviour in a different way (see table1 appendix2). Mintel (2001) reports that the greatest time of expenditure for women in the AB social grade are during the bachelor stage where 56% of women spent more than £500 on clothes in a year. However, during the newly married couples, full nest 1 and full nest 2 periods the percentage of women that spends £500 a year on clothes decreases to 35%. This percentage increases at the empty nest stage to 46%. (See appendix 3, figure 6)
Psychological factors are related to perceptions, motivations, attitudes and personality of a consumer so it crucial to know how life patterns influence purchasing decisions. ‘Psychographics are usually based on demographic information as well as ratings of consumer’s activities, interests and opinions’ (Williams, K, 1981, pg.91).
Lifestyles and patterns have strong influences on consumer behaviour. Figure 7 (see appendix. 3) illustrates the main factors that form a lifestyle.
Perception and motivation relates to an individual’s interpretation of a product and company. Maslow recognises that people with intensive needs can be motivated to purchase the goods if identified properly (Lancaster, G, Massingham, L, and Ashford, R, 2002, pg. 80). With this, marketer can convey good brand awareness.
The subject of personality is a very complicated area. There are many variables that reflect a comprehensive view of a personality. This makes it difficult for marketers to understand the link personality has with consumer behaviour (Williams, K, 1981, pg.133)
6.0 Timescale
Milestone
Task
Due date
Remarks
1
Stage 1: Area of interest identified
24 March ’10
Completed
2
Stage 2: Specific topic selected
24 March ’10
Completed
3
Stage 3: Topic refined to develop dissertation proposal
6 April ’10
Completed
4
Stage 4: Proposal written and submitted
22 April ’10
Completed
5
Stage 5: Collection of data and information
30 June ’10
6
Stage 6: Analysis and interpretation of collected data
10 July ’10
7
Stage 7: Writing up
31 July 10
8
Stage 8: Final draft prepared – submission of dissertation
31 Aug ’10
9
Final Deadline of dissertation
17 Sept ’10
7.0 Bibliography
American Marketing Association (2004). ‘Dictionary of marketing terms: reference group’ Available from: http://www.marketingpower.com/live/mg_dictionary-view3860.php [Accessed: 2nd April 2010]
American Marketing Association (2004). ‘What’s hot what’s not: Teens tastes in fashion change and change often? Teens also spend, and spend’. Available from: http://www.intellisearchnow.com/mp_pwrpub_view.scml?ppa=7iempYZhklooprVSlj%216%3C%22bfej%5B%21 [Accessed: 2nd April 2010]
Batista, E (2004). ‘Wired News: What your clothes say about you’. Available from: http://www.wired.com/news/wireless/0,1382,58006,00.html [Accessed: 2nd April 2010]
Beaumont, J. R. (1989). ‘An overview of market analysis: Who?, What?, Where? and Why?’ International Journal of Information Management Volume 9, Issue 1, Pages 51-62 Available from: http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VB4-45M2NCT-16&_user=822084&_coverDate=03%2F31%2F1989&_rdoc=1&_fmt=high&_orig=search&_sort=d&_docanchor=&view=c&_searchStrId=1303548251&_rerunOrigin=google&_acct=C000044499&_version=1&_urlVersion=0&_userid=822084&md5=6b2bce837f0436807b24710842e5914a [Accessed: 3rd April 2010]
Chisnall, P (1975). ‘Marketing: a behavioural analysis’. 1st edition. McGraw-Hill Book Company (UK) Limited.
East, R. (1997). ‘Consumer Behaviour: Advances and Applications in Marketing’. Prentice Hall, London.
Goldsmith, R (2002). ‘Some Personality Traits of Frequent Clothing Buyers. Emerald, journal of consumer marketing, volume 6, number 3’. Available from: http://oberon.emeraldinsight.com/vl=3977275/cl=13/nw=1/fm=html/rpsv/cw/mcb/13612026/v6n3/s6/p303 [Accessed: 3rd April 2010]
Kotler et. al. (2001). ‘Marketing’. 5th Edition, Prentice Hall, Sydney.
Lansing, J, and Morgan, J, (1955). ‘Consumer Behaviour: Consumer finances over the life-cycle’. 1st Edition. Clark, L.H., New York University Press.
Lancaster, G, Massingham, L, and Ashford, R (2002). ‘Essentials of Marketing: Understanding the Behaviour of Customers.’ 4th edition. McGraw-Hill Education.
Mintel, (2001). ‘Marketing to AB’s – UK – June 2001’. Available from: http://reports.mintel.com/sinatra/mintel/searchexec/fulltext=family+life-cycle&type=reports&report_title&results=1000&proximity=anywhere&variants=true&order=2/report/repcode=S192&anchor=accessS192/doc/712626029&repcode=S192#0 [Accessed: 2nd April 2010]
Mintel, (2003). ‘Extreme Sports – UK – November 2003’ Available from: http://reports.mintel.com/sinatra/mintel/searchexec/fulltext=sub-culture&type=reports&report_country=224&report_title&results=1000&proximity=anywhere&variants=true&order=2/report/repcode=L439&anchor=accessL439 [Accessed: 3rd April 2010]
Moran, C (2004). ‘Fashion Crime: hoodlums love their hooded tops’ The Times.
Plummer, J (1974) ‘The Concept and Application of Life Style Segmentation’ The Journal of Marketing. Vol. 38, No. 1, pp. 33-37. American Marketing Association
Williams, T (2002). ‘Social Class Influences on Purchase Evaluation Criteria. Emerald, Journal of Consumer Marketing, Volume 19, Number 3’. Available from: http://titania.emeraldinsight.com/vl=7203230/cl=70/nw=1/fm=html/rpsv/cw/mcb/07363761/v19n3/s5/p249 [Accessed: 3rd April 2010]
8.0 Appendices
8.1 Appendix 1
Figure 3: Consumer spending on extreme sports goods, 1998-2003 (Source: Sports Industry Research Centre/Sports Industries Federation/Mintel)
£m
Index
£m at 1998 prices*
Index
1998
3,470
100
3,470
100
1999
3,560
103
3,331
96
2000
4,107
118
3,227
93
2001
4,048
117
3,158
91
2002
4,319
124
3,088
89
2003 (est)
4,476
129
3,054
88
Figure 4: PDI, consumer expenditure and savings, 1998-2007 (Source: National Statistics 2002/Mintel)
It demonstrates that between 1998 and 2003 while levels of disposable income have increased by 21%, consumer spending has increased by 22%.
PDI at 1998 prices
Index
Consumer expenditure at 1998 prices
Index
Savings
Index
£bn
£bn
£bn
1998
592.74
100
557.35
100
35.39
100
1999
614.50
104
582.90
105
32.80
93
2000
639.80
108
612.25
110
28.09
79
2001
676.08
114
638.52
115
40.02
113
2002
697.58
118
665.05
119
37.20
105
2003 (est)
715.02
121
681.01
122
56.52
160
2004 (fore)
732.18
124
697.36
125
62.86
178
2005 (proj)
749.02
126
715.49
128
68.16
193
2006 (proj)
768.50
130
734.09
132
73.86
209
2007 (proj)
787.71
133
753.91
135
76.75
217
8.1 Appendix 2
Figure 5: Socio-economic classification as defined by the National Readership Survey (Chisnall, P, 1975, pg.114).
Social grade
Social status
Head of household’s occupation
Approximate percentage of families
A
Upper middle class
Higher managerial, administrative or professional
3
B
Middle class
Intermediate managerial, administrative or professional
10
C1
Lower middle class
Supervisory or clerical and junior managerial, administrative or professional
24
C2
Skilled working class
Skilled manual workers
30
D
Working class
Semi and unskilled manual workers
25
E
Those at the lowest levels of subsistence
State pensioners or widows (no other earner), casual or lowest-grade workers
8
Table 1: Life cycle stage (Lansing, J and Morgan, J, 1955)
Stage
Category
1
Bachelor stage
young single people
2
Newly married couples
young, no children
3
The full nest 1
young married couple with dependent children
4
The full nest 2
older married couples with dependent children
5
The empty nest
older married couples with no children living with them
6
The solitary survivor
older single people.
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