About Consumer Behavior

Consumer behavior is the study of how and why people purchase and use products. From a psychological standpoint, consumer behavior tries to understand all of the attitudes and emotions that drive these decisions. Human beings are complex creatures, and likewise, consumer behavior is an overarching term that describes many different ways that we behave when we consume products. Some of the items that influence our consumer behavior are our motivation, ability, opportunity, psychographics, demographics, memory, knowledge, ability to recognize problems, social class, outside influences, heuristics (mental shortcuts), the way we search for information, and the difference in the way that we behave in high-effort or low effort decisions.

Sound pretty dense? Well, it is, sort of. However, diving into different areas of consumer behavior can be really fun. It can help you understand what motivates your potential customers and even what motivates you to behave the way you do. For instance, why do you continually buy the same brand of cereal every time you go to the store? How did you process your decision to determine where you live? What thought processes and behaviors did you go through when you purchased your last car? How will you determine your next car? Consumer behavior can help you understand how and why we make these decisions.

When you have a firm grasp on why consumers behave the way they do, your marketing gets better. It takes out some of the guesswork. It helps you focus your time on motivators that are actually going to help you sell products. When you combine this knowledge with a true understanding of knowing what you are selling and who you are selling to, you can become an expert at niche marketing.

Motivation, Ability, and Opportunity

To purchase a product, a customer needs the motivation, ability, and opportunity to do so.[1] In general, all three of these items must be present for a consumer, which is why a great niche marketer really tries to understand all three. If you get only two out of the three, you still haven’t made the sale. Let me explain each of these critical elements of consumer behavior and why they are all dependent on each other.

Motivation

In order to purchase a product, I need the motivation to do so, sound pretty simple? Well, that’s because it’s part of the fundamentals of just about any piece of advertising that you’ve ever seen. The point of an ad is to get you motivated to purchase whatever product is being sold. The point of a good ad is to do so in a way where you are connecting this motivation, or desire to the audience that has the ability and opportunity to do so.

Ability

Somebody could be completely motivated to buy your product, but they might not be able to do so. One of the most common reasons this occurs is because of money. For example, someone may love the Mercedes brand, but it could be completely out of their price range. Another example of how ability could come into play might include the marketers of an event like a marathon. Some consumers may want to achieve something like this, but they may just be physically unable to do so. As an advertiser, you may have done an amazing job creating the motivation to buy the product, but if someone does not have the ability to buy, your message is not going to translate into sales.

Opportunity

A consumer may love your product, have the means to purchase it, but not have the opportunity. Maybe you are an online retailer and you do not ship to certain areas. Maybe your product or service takes too long to create or ship. Maybe you’re a brick-and-mortar retailer and you are bound by your physical location. All of these possibilities make up the consumer’s opportunity to buy your product.

From a consumer behavior standpoint, motivation, ability, and opportunity need to be aligned in order for you to make a sale. These three items make up the foundation of all other aspects that make up consumer behavior.

Psychographics

Where demographics are typically seen as items that measure who your buyers are, like age, income, and gender, psychographics is an attempt to measure why consumers do what they do. Some common psychographics are attitudes, interests, and opinions.[2] Understanding psychographics can help you build a profile of your ideal consumer, create more compelling advertising, and help target your ads more effectively.

Attitudes

A consumer’s attitude could include a positive or negative association with a particular brand. It could also impact the way they think of your product category. For instance, if someone thinks of a car as just a way to get from point A to point B, it wouldn’t be worth a luxury car brand’s time or budget to pursue. In addition to overt attitudes, psychographics can also help identify a consumer’s underlying attitudes. Let’s look at the car example again, but let’s say someone has an underlying attitude about the entire category of cars. Maybe they really hate driving and think that cars are a complete waste of time and money. They may think that a car takes away their ability to multitask, costs too much to acquire and maintain, and they hate spending their time in traffic. This person may take public transit, walk, or bike everywhere they go because of their underlying attitudes. In this case, no car manufacturer should waste any of their advertising trying to target this consumer.

Interests

A consumer’s interests help drive their purchasing behaviors. Although plenty of purchases are made on items that the consumer is not at all interested in (think something that is purchased to solve a problem like gas when your car is empty, toilet paper, or tires), people are much more likely to buy premium versions of items that are of interest. Think about it, if you are really into music, you are much more likely to buy expensive headphones than someone who rarely listens to music. Much like underlying attitudes, a consumer’s underlying interests could impact how they purchase and interact with your product. Let’s say that you are selling ear protection. Outside of needs, like OSHA or workplace purchases, your ideal consumer would be interested in really loud activities. This could vary from shooting at a gun range to going to concerts.

Opinions

In consumer behavior, opinions are also really important in determining a customer profile. So how are attitudes and opinions different? Think of it this way, an attitude is an underlying belief about something and an opinion is a way of expressing that belief. Let’s look back at the car example. While the attitude may be that cars are a complete waste of money, the opinion that consumer might have about someone that drives an expensive luxury car is that the car owner is wasting their money. Make sense?

Low-Effort and High-Effort Consumer Behavior

There are really two different ways that we process our consumer decisions. One way, typically for smaller purchases, is called low-effort consumer behavior. The other way we process our decisions is called high-effort consumer behavior. Although there are many similarities, there are distinct differences in not only the way we process and make the decisions but there are differences even in the way we think about making the decisions.

Low-Effort Consumer Behavior

Low-effort consumer behavior happens when you don’t have to think much about your purchase. Low-effort consumer behavior uses a process in your brain called peripheral-route processing. This basically means that you don’t really think much about your decision.[3]

How Consumers Buy Based on Low-Effort Consumer Behavior

In a low-effort consumer behavior situation, there’s usually not much of a consequence in what you purchase. Unless, of course, the person that you are buying for is very selective about what type of yogurt or cereal that you pick up and they will get really upset if you don’t get the right thing. However, that’s really more of a normative influence and we’ll talk about that later.

Oftentimes, however, in a low-effort consumer behavior situation, you might not be looking for something that is perfect, but something that will work.

Heuristics

Another major way that consumers behave in a low-effort situation is by relying on heuristics. Heuristics is just a fancy way of saying shortcuts. Our brain uses heuristics to make our lives easier. Heuristics allow us to not have to think deeply about every single purchase we make. How miserable would we be if we spent 10 hours at the grocery store every week deciding on every product you put in the cart or had to re-learn how to drive every time we got in the car?

Heuristics can be influenced by advertising to drive familiarity with a brand. With heuristics, consumers make shortcuts like buying the cheapest, buying the item they perceive to be the best or even buying the item that has the most shelf space. Brand loyalty is another common heuristic. Brand loyalty leads to repeat purchases based on a consumer’s experience with the brand.[4] In low-effort consumer behavior, brand loyalty becomes automatic. A brand-loyal consumer will always buy Cheerios, or Heinz without even considering a substitute product and without even thinking about it. Brand loyalty is difficult to break but many brands try to entice loyal customers with price-based tactics, like sales or promotions, or coupons.

Although the word habit has a negative connotation, from a consumer behavior standpoint, it doesn’t necessarily have to be a bad thing. A habit is a heuristic where consumers don’t seek any alternatives.[5] It is a repetitive purchase that is different than brand loyalty because a habit does not involve a strong preference for a brand. For instance, you may habitually buy generic milk, because it is the cheapest, but you are not seeking out a specific brand. You would likely purchase any store brand’s cheapest milk available. The way consumers buy gas is another common habitual behavior. Many people go with the cheapest grade of gas at the cheapest location somewhere within the proximity of their home or workplace. In this type of behavior, there is no loyalty. That same consumer would likely go to another store if they offered cheaper gas.

Outside Influences

In low-effort consumer behavior, there are oftentimes outside influences (called normative influences) that impact the products that you buy. This could include when someone is directly asking you to buy a product or it could also be indirect, like buying a product to fit in. There’s also an intergenerational effect that can happen with low-effort purchases. This happens when you buy the same brand that your parents bought while they were raising you.[6]

Advertising and Low-Effort Consumer Behavior

Since low-effort consumer behavior follows peripheral-route processing, an advertising strategy has to be positioned in a way where the consumer doesn’t have to think much about the ad. Several best practices exist such as:

•Repetition, repetition, repetition

•Long lists of benefits are seen as providing more value

•People buy brands that they like

•Use humor

•Use attractive or aspirational people to endorse your product

•Engage the senses, use music, great visuals, and even smell (if possible)

•People tend to like brands they are familiar with which is why repetition is so important in low-effort consumer behavior

High-Effort Consumer Behavior

High-effort consumer behavior is much more involved than low-effort consumer behavior. High-effort decisions involve deep thinking about your purchase. Instead of peripheral-route processing, when making a high-effort decision, your brain uses central-route processing.[7] This means that you are thinking about weighing the pros and cons, weighing price versus value, considering reviews and endorsements, considering arguments for and against your potential purchase, and narrowing down your potential purchases to a few top contenders.

How Consumers Buy Based on High-Effort Consumer Behavior

High-effort consumer behavior follows a five-step process[8]:

As marketers of high-effort consumer behavior products, we typically spend a significant amount of time in the first phase of the process of problem recognition. Also, as marketers, we tend to spend our time trying to create a difference between someone’s ideal state versus their actual state so a consumer recognizes there is a problem. This could be something as simple as reminding a customer to visit the dentist twice a year to as complex as convincing them they need to buy a high-priced luxury car. The point of the problem recognition phase is that we are trying to create a difference in the consumer’s mind between an ideal situation and their actual situation.

Once a consumer realizes there is a problem, they are going to try and seek out information to try and solve that problem. This can include referrals from friends, online searches, reviews, or company marketing. This stage of the decision-making process is critical. As a marketer, your information has to be informative and convincing enough for the consumer to consider your brand. It’s also not enough that your information is great, it’s also got to be available and accessible. You could have the best possible product to solve your consumer’s problem, but if they don’t know you exist, you’re never going to make a sale. That’s where niche marketing becomes critical. We also know about something called “the Cognitive Miser”, which essentially means that consumers are lazy. Even on major purchases that involve a lot of money and time to figure out, we always want to take the easy way out.

Once a consumer has searched for information, they create a consideration set. This is essentially a few alternatives that they’ve narrowed down for their final decision. A typical consideration set can range from two to eight alternatives.[9] This consideration set is typically done through two different approaches: compensatory and non-compensatory. A compensatory approach is where a consumer compares many different features and picks the one that ranks the highest.[10] This process doesn’t even need to be conscious. For instance, you could be comparing a Nintendo Switch with an XBOX One. A consumer is likely going to consider the price, number or types of games available, online features, experience with the brand, and maybe portability. If one feature isn’t a must-have and they’re considering all factors, this is a compensatory approach.

However, in a non-compensatory approach, if you have a feature that is a must-have, it essentially knocks anything that doesn’t have that feature out of contention.[11] Let’s look at the Nintendo Switch vs. the XBOX One again. If the consumer needs portability, the XBOX One will be eliminated.

After products are narrowed down to a consideration set, the customer makes their decision to purchase one of the products. Since high-effort consumer behavior takes a lot of thought, what are some items that typically sway someone’s decision? These could include:

•Credibility in a source of information (credible testimonials can work great)

•Message strength

•Emotions

•Arguments or messages that are two-sided (consider the pros and cons)

•Brand loyalty

An often overlooked step in the high-effort consumer behavior process is post-purchase behavior. How well the product performs goes a long way to determine repeat purchases. From a business perspective, this is incredibly important as we know that acquiring new customers is a much more expensive strategy than maintaining existing customers.

Adopting New Products or Ideas

From a consumer behavior standpoint, customers typically fall into categories for adopting new technologies or ideas. These include innovators, early adopters, early majority, late majority, and laggards.[12]

Innovators

An innovator is someone that is willing to be the first to try a product. They are typically willing to pay a much higher price for early access. Think of all of those people that line up around the block when a new iPhone is released. Think of this group of people as consumers that like to show off their new techs to their friends and want to be revered as someone that is on the cutting-edge of new technologies or ideas.

Early Adopters

Although they do not adopt a new product as early as an innovator, they follow quickly behind an innovator. They may have a little more patience for product availability than an early adopter.

Early Majority

The early majority still wants to purchase the product, but they are willing to wait for items like pricing to come down, or for the product to be readily available.

Late Majority

Think of these as skeptics. The late majority usually waits to see how a technology or new idea plays out before they adopt it. They are usually not people that are actively avoiding a change, but they really don’t care to adopt a new technology or product as long as something more familiar is an option.

Laggards

Laggards typically actively avoid major changes. Whether they don’t want to learn or are too comfortable with their old way of doing things, laggards will not adopt a new technology or idea unless they have to.  

Wrapping Up

There are so many different aspects to consumer behavior. It is dependent on so many different things. It’s based on:

• Motivations
• Ability
• Opportunity
• Situations
• Brand loyalty
• Habits
• Heuristics
• Normative influences
• Psychographics

What I’ve described on this page are just a few items that make up the field of consumer behavior. There are so many other components that I didn’t cover and many others that are emerging fields, like how do consumers’ wants and needs change in the midst of a global pandemic. If you like what you saw here, make sure to check out some articles that I’ve written that cover real-world examples of the different types of consumer behavior in action. If you have any questions, make sure to contact me!

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[1] Hoyer, W., MacInnis, D., & Pieters, R. (2018). Consumer Behavior (Seventh Edition). Cengage Learning: 180-199.

[2] Vyncke, P. (2002). Lifestyle Segmentation: From Attitudes, Interests and Opinions, to Values, Aesthetic Styles, Life Visions and Media Preferences. European Journal of Communication, 17(4), 445–463. https://doi-org.prox.lib.ncsu.edu/10.1177/02673231020170040301

[3] Dröge, C. (1989). Shaping the Route to Attitude Change: Central versus Peripheral Processing through Comparative versus Noncomparative Advertising. Journal of Marketing Research, 26(2), 193-204. doi:10.2307/3172605

[4] Chiu, C.‐M., Wang, E.T.G., Fang, Y.‐H. and Huang, H.‐Y. (2014), Understanding customers’ repeat purchase intentions in B2C e‐commerce: the roles of utilitarian value, hedonic value and perceived risk. Information Systems Journal, 24: 85-114. doi:10.1111/j.1365-2575.2012.00407.x

[5] Chou, S., & Hsu, C. (2016). Understanding online repurchase intention: Social exchange theory and shopping habit. Information Systems and eBusiness Management, 14(1), 19-45. doi:http://dx.doi.org.prox.lib.ncsu.edu/10.1007/s10257-015-0272-9

[6] Moore, E., Wilkie, W., & Lutz, R. (2002). Passing the Torch: Intergenerational Influences as a Source of Brand Equity. Journal of Marketing, 66(2), 17-37. Retrieved September 5, 2020, from http://www.jstor.org/stable/3203413

[7] Dröge, C. (1989). Shaping the Route to Attitude Change: Central versus Peripheral Processing through Comparative versus Noncomparative Advertising. Journal of Marketing Research, 26(2), 193-204. doi:10.2307/3172605

[8] Hoyer, W., MacInnis, D., & Pieters, R. (2018). Consumer Behavior (Seventh Edition). Cengage Learning: 180-199.

[9] Shocker, Allan, Ben-Akiva, Moshe, Boccara, Bruno and Nedungadi, Prakash. 1991. Consideration Set Influences on Consumer Decision-Making and Choice: Issues, Models, and Suggestions. Marketing Letters: A Journal of Research in Marketing, Vol. 2, No. 3: 181-197.

[10] Gudigantala, N. (2014). A study of the compensatory and non-compensatory decision support on the top-100 U.S. E-commerce websites. The Journal of Applied Business and Economics, 16(1), 74-83. Retrieved from https://proxying.lib.ncsu.edu/index.php/login?url=https://www-proquest-com.prox.lib.ncsu.edu/docview/1546004178?accountid=12725

[11] Gudigantala, N. (2014). A study of the compensatory and non-compensatory decision support on the top-100 U.S. E-commerce websites. The Journal of Applied Business and Economics, 16(1), 74-83. Retrieved from https://proxying.lib.ncsu.edu/index.php/login?url=https://www-proquest-com.prox.lib.ncsu.edu/docview/1546004178?accountid=12725

[12]  Rogers, Everett (16 August 2003). Diffusion of Innovations, 5th Edition. Simon and Schuster. ISBN 978-0-7432-5823-4.