Consumer and Industrial Buyer Behaviour

Table of Contents 1. 0INTRODUCTION3 2. 0CONSUMER BEHAVIOUR PARADIGMS IN MARKETING3 2. 1Information Processing Paradigm3 2. 1. 1Strength and limitations of Information processing models3 2. 2Experiential Paradigm4 2. 2. 1Contrasting Views of consumer behaviour5 3. 0MILK BUYING PROCESS IN SAUDI ARABIA9 3. 1Consumers Profile9 3. 1. 1Mother Dearest9 3. 1. 2Habitualists9 3. 1. 3Look At Me9 3. 1. 4Convenience seeker9 3. 2Milk Purchasing Behaviour and Buying Process10 3. 2. 1Mother Dearest10 3. 2. 2Habitualists11 3. 2. 3Look At Me11 3. 2. 4Convenience seeker11 4. 0CONCLUSION11 . 0REFERENCES12 INTRODUCTION Understanding consumer behaviour and “knowing customers,” have and never will be simple. Consumers may respond to influences that change their mind at the last minute. This documents presents consumer behaviour in marketing, reviews the two major paradigms in consumer behaviour (information processing and experiential), their strengths and limitations. Also it presents a contrasting view between the two paradigms. Finally a review of milk purchasing behaviour and buying process in Saudi Arabia is conducted in the last section.

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CONSUMER BEHAVIOUR PARADIGMS IN MARKETING Many researchers describe consumer behaviour as the study of individuals or groups and the mental, emotional and physical processes they use to select, obtain, consume and dispose of products or services, to satisfy needs and wants, and the impact that these processes have on the consumer and society (Olson and Peter). There are numerous models trying to explain consumer behaviour. These models generally deal with various stimuli, influential factors, the decision-making process and outcomes.

Consumer behaviour has been dominated by the information processing paradigm, which perceives consumers as rational decision makers. However, the non rational and emotional aspect of consumption and decision making has been widely accepted and well received by many in the field. This aspect is known as the experiential paradigm. Both paradigms are important for marketers. However, the use of the paradigm is highly depends on the nature of the problem to be studied and the type of the required decision. 1 Information Processing Paradigm

Information processing paradigm perceives consumers as rational decision makers and problem solver, who carefully consider the functionality of products. This approach is influenced by the cognitive psychology and it is based on the theory that behaviour takes place after people think, make decisions and solve problems (Bettman 1970). Information Processing attempts to give us an insight into the cognitive nature of human though processes and it can be applied to many areas of life, whether advertising, consumer choice, or education.

From the moment an individual first is exposed to a message, or communication, a process begins. This process follows a path along which information is taken into the memory system and reactivated when necessary and the output of this processing forms beliefs and attitudes toward objects (Module MN 7038/D module 4). 1 Strength and limitations of Information processing models Information processing models currently are most useful for describing and understanding individual buyer and least useful for prediction in large market. There are two great potential uses of such model: ) As basis of understanding in building better macromodels. 2) In modelling situation where the total market consist of very few individuals like some industrial marketing situations. Because of the nature of business buying where most decisions have been taken in a rational and more formalized way, information processing models can play great role in this market. In fact information processing models suit business market more than consumer market because business market has the following characteristics: 1) Professional purchasing 2) Fewer buyers ) Larger purchases 4) Functional products 5) Closer, longer relationships/ reciprocity 6) Geographic concentration 7) Derived demand 8) Lower price sensitivity On the other hand, the situation in consumer market is more complicated when it comes to applying information processing models. One of the major problems confronting information processing models is the idiosyncratic nature of model developed, due to the emphasis on depicting actual decision rules. For information processing approach to be valuable some generalizations must become apparent.

Because consumer market is dominated by branded product, while business market is dominated by commodities and raw materials, lifestyle and brand personality (both are irrational and subjective) play major role in consumer’s choice and decision making mechanism (Backer). Another main limitations using information processing model is its insufficiency when it comes to market to one of the biggest and most influential consumer populations on earth, children. It is very rarely that children will follow a rational approach to make decision.

Also information processing model is less useful when it comes to market to women, especially for fashion and beauty products. 2 Experiential Paradigm Because all the above reasons many researchers in consumer behaviour are embracing the experiential paradigm (the experiential paradigm highlights the subjectivity and symbolic aspects of consumer behaviour) (Module MN 7038/D module 4) and questioning the hegemony of the information processing perspective on the grounds that it may neglect important consumption phenomena like various playful leisure activities, sensory pleasures, daydreams, aesthetic enjoyment, and emotional responses.

Consumption has begun to be seen as involving a steady flow of fantasies, feelings, and fun encompassed by the experiential view paradigm. This experiential perspective is phenomenological in spirit and regards consumption as a primarily subjective state of consciousness with a variety of symbolic meanings, hedonic responses, and aesthetic criteria. Recognition of these important aspects of consumption is strengthened by contrasting the information processing and experiential views (Holbrook and Hirschman 1982).

To understand the value of experiential aspect in consumer marketing, a comparison between using emotion and logic in advertising (considering advertising a key stimuli and source of information) (McGuire 1963) showed the following advantages of using emotion: a) Emotion, especially if it relies on the implicit or associative rout, does not raise the nature defensives. b) Emotion requires less effort from consumers. c) Emotion-arousing stimuli are generally more interesting. ) Emotion-arousing stimuli such as pictures and music are easier to recall than is factual evidence. e) Emotion may lead to behaviour change more immediately than logic would (Tellis 1977). 1 Contrasting Views of consumer behaviour The bases for contrasting the information processing and experiential views appear in the Figure. This diagram is not all-inclusive. It simply represents some key variables typically considered in logical flow models of consumer behaviour.

In brief, various environmental and consumer inputs (products, resources) are processed by an intervening response system (cognition-affect-behaviour) that generates output consequences which, when appraised against criteria, result in a leaning feedback loop. Individual differences, search activity, type of involvement, and task definition affect the criteria by which output consequences are evaluated (Holbrook and Hirschman 1982). Though the Figure neglects some variables that have interested consumer researchers, it reflects the general viewpoint embodied by most popular consumer behaviour models.

Moreover, the diagram facilitates the intended comparison between approaches by distinguishing between the phenomena of primary interest to the information processing perspective (left side of slash marks) and those of central concern to the experiential view (right side of slash marks) (Holbrook and Hirschman 1982). 1. Environmental Inputs: Product: Much consumer research has focused on the tangible benefits of conventional goods and services (soft drinks, toothpaste, automobiles) that perform utilitarian functions based on relatively objective features (calories, fluoride, and miles per gallon).

By contrast, the experiential perspective explores the symbolic meanings of more subjective characteristics (cheerfulness, sociability, elegance) (Holbrook and Hirschman 1982). Stimulus Properties: Traditional consumer research paradigms have concentrated on product attributes that lend themselves to verbal descriptions. Both conjoint analysis and multiattribute models, for example, have relied heavily on designs that make use of verbal stimuli. However, many products project important nonverbal cues that must be seen, heard, tasted, felt, or smelled to be appreciated properly.

Indeed, in many consumption situations (viewing a movie, eating at a restaurant, playing tennis), several sensory channels operate simultaneously (Holbrook and Hirschman 1982). Communication Content: Content analyses of communication in consumer research have more often focused on drawing inferences about the source of a message than on explaining its effects (Kassarjian1977). When the latter perspective has been considered, it has generally involved an information processing orientation toward the study of consumer responses to the semantic aspects of communication content (Shimp and Preston 1981).

Focusing on effects attributable to the syntactic aspects of message content-that is, their structure and style-is more germane to the experiential perspective. In other disciplines, message syntax has often been found to exert a direct effect on hedonic response (Holbrook and Hirschman 1982). 2. Consumer Inputs: Resources: In examining the resources that a consumer brings to the exchange transaction, information processing focuses on monetary income constraints and the effects of prices.

By contrast the experiential view emphasizes, in additional to the money-oriented focus, the acknowledgement of the fundamental role played by the consumer’s allocation of time resources to the household production function (Holbrook and Hirschman 1982). Task Definition: The information processing view conjures up an image of the consumer as a problem solver engaged in the goal-directed activities of searching for information, retrieving memory cues, weighing evidence, and arriving at carefully considered judgmental evaluations.

By contrast, the experiential view emphasizes the importance of primary process thinking in accord with the pleasure principle (Holbrook and Hirschman 1982). Type of Involvement: We focus here not on the degree of involvement (low versus high), but rather on its type (engagement of cognitive responses versus orientation reaction involving arousal). Any argument that involvement is primarily a left-brain phenomenon refers implicitly to cognitive responses associated with analytic, logical, problem-oriented cerebration (Hansen 1981).

If one referred instead to “involvement” in the sense of the orientation reflex, its arousal component might be more closely associated with right brain phenomena related to emotion (Holbrook and Hirschman 1982). Search Activity: The nature of the associated search activity is closely tied to involvement issues. Here, proponents of the information processing perspective adopt various strategies for the study of information acquisition. By contrast, an experiential view of search activity might draw more heavily from the work by psychologists on exploratory behaviour (Beriyne 1960).

Individual Differences: The individual differences in information processing view focuses on demographic and socioeconomics differences. By contrast, the experiential view focuses on personality and sensation seeking (Holbrook and Hirschman 1982). 3. Intervening response System: Cognition: The information processing approach has focused on memory and related phenomena: the consumer’s cognitive apparatus is viewed as a complex knowledge structure embodying intricately interwoven subsystems of beliefs referred to as “memory schemas” or “semantic networks” (Olson1980).

By contrast, the experiential perspective focuses on cognitive processes that are more subconscious and private in nature. Interest centres on consumption-related flights of fancy involving pictorial imagery (Richardson 1969), fantasies (Klinger 1971), and daydreams (Singer 1966). Affect: In the area of affect information processing emphasizes on attitudes and preferences. By contrast, the experiential view emphasizes on emotions and feelings. Behaviour: In the area of behaviour information processing emphasizes on buying, purchase decision and choices.

By contrast, the experiential view emphasizes on usage, experience and activities. 4. Output Consequences, Criteria, and Learning: Output Consequences and Criteria: From the information processing perspective, the consequences of consumer choice typically are viewed in terms of the product’s useful function. The criteria for evaluating the success of a purchasing decision are therefore primarily utilitarian in nature. The operative logic behind this criterion reflects a work mentality in which objects attain value primarily by virtue of the economic benefits they provide.

By contrast, in the experiential view, the consequences of consumer choice typically are viewed in terms of the fun and enjoyment offered by the product. The criteria for evaluating the success of a purchasing decision are therefore aesthetic generated by play mentality (Holbrook and Hirschman 1982). Learning: The learning effect in information processing view is based on operant, satisfaction and reinforcement. By contrast the experiential it is based on respondent, association and contiguity (Holbrook and Hirschman 1982). [pic]

Figure: Contrast Between the Information Processing and Experiential Views of Consumer Behaviour (Holbrook and Hirschman 1982) MILK BUYING PROCESS IN SAUDI ARABIA Almarai is the largest dairy foods company in the Middle East, it is synonymous with freshness, quality and service and it is of the leading brand names in the Arabian sub-continent. Almarai has a wide range of products including milk, Laban (drinking yogurt), yoghurt, juice, butter, cheese, cream and dairy desserts. The dairy liquids category is the core business of AlMarai, with AlMarai fresh milk being the market leader in all GCC markets (www. lmarai. com). Apart from this, the dairy market across GCC is very diversified with multiple product formats (fresh, long life, powder, evaporated, etc). In the following sections consumers’ segmentation and milk (fresh and long life) purchasing processes will be discussed. 1 Consumers Profile Milks consumers’ segmentation in this paper is done based on lifestyle and trends across the society. Mother dearest, Habitualists, Look at me and Convenience seekers are the four consumer segments and each segment will be reviewed in details in the below sections. Mother Dearest Mother dearest constitutes a good part of Saudi milk consumers/buyers. Mother dearest have high expectations and she is a quality seekers and will not compromise on the account of her family. The mother dearest usually reads the information provided and seeks guarantees and she will always put her family ahead of herself. In summary she is the protector. 2 Habitualists Habitualist by definition has a hard time with change and very loyal. She is strict and keeps family on the straight and narrow.

She is paranoid, uncomfortable with unknown territory, leans towards famous brands and will always have a backup plan. She is very resourceful and she does the main shopping and, will let husband get involved to a minor degree. 3 Look At Me Look at me is curious by nature and always looking for something better. She reads the information provided, seeks psychological comfort and well being through physical means, and seeks security and comfort. She needs help (hope to find it in products) and may take people’s advice.

She likes to explore and looks to new products. She focuses on beauty and needs something good for her skin and wants to glow. 4 Convenience seeker Convenience seeker usually in a hurry, busy life, spends most time out of home, does not bother with the words on a pack or the information provided and does not see stark differences between formats ,adopt a “milk is milk” philosophy. 2 Milk Purchasing Behaviour and Buying Process Traditionally milk is considered commodity and in consumer marketing it is considered connivance product (Pride and Ferrell).

In most cases milk purchasing process fall under habitual decision making and it goes through the following sequence: problem recognition (selective) – information search (limited internal) – purchase – post purchase, no dissonance very limited evolution (Solomon). However, for some consumer like look at me the situation evolved to limited decision making and it goes through the following sequence: problem recognition (Generic) – information search (internal and limited external) – alternative evaluation, few attributes, simple decision rules and few alternatives – purchase – post purchase, no dissonance limited evolution (Solomon).

In the following sections the purchasing behaviour of each segment will be reviewed. 1 Mother Dearest During shopping for fresh, mother dearest will ask the following questions at point of purchase: ? When does this expire? ? Are there any preservatives? ? Where’s my brand? ? What size do I need? ? This is my brand so I know what’s in it. These may be the questions running through their minds, however, a prerequisite of purchase criteria have been determined including well known brand, positive past experience, and high quality (to include good taste, smell, and consistency).

Because Mother Dearest tend to purchase long life for specific reasons (flavoured milk, back up, etc. ) certain purchase criteria become of more importance for long life that may not have surfaced for Fresh. Shared criteria include: ? Size ? Taste ? Past experience New criteria include: ? Word of mouth ? Ads ? Price ? Variety of flavours. ? Kids preference ? Packaging (attractive pack) 2 Habitualists A Habitualist is similar in most aspects to Mother Dearest except for her motivation behind her choices along with her purchase behaviour.

Because habitualists like to be in control she will go herself to make the actual purchase. She feels uncomfortable with delegating the responsibility to anyone else as they might be unfamiliar with what is best for her family and herself. 3 Look At Me Look at me tends to be similar to mother dearest in how they go about purchasing milk i. e. who, where, and when. She is not as strict as to who will go and purchase and from where as long as the right product is brought home. Although the look at me has similar purchase behaviour as mother dearest, she is more complex in its thinking and takes much more into consideration.

This is a result of its concern for not only health, but also a need for reassurance both on a personal and social level. 4 Convenience seeker Convenience Seekers are most likely to go themselves during the main shopping. Because they are more likely to purchase long life milk, the purchase happens in bulk and they rarely return. Convenience Seekers are more open to the idea of having their milk delivered as this would facilitate their lifestyle. They are also more likely to purchase milk from anywhere and are not strict as to whether it is a hypermarket, supermarket, or a grocery. Availability is important so that they do not have to search.

CONCLUSION In conclusions, information processing and experiential paradigms represent very different way of looking to consumer. Each paradigm has its own strengths and limitations. Information processing paradigm is ideal for business buying and product class/form. While experiential paradigm is more useful when it comes to brand buying, market to children and market to women, especially for fashion and beauty products. All in all, it is important to be aware of the limitations and potential problems as well as the possible benefits of each model; it largely relies on successful implementation researcher.

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Journal of Consumer Research, 8 (June), 23-36. 4) Holbrook, Morris B. and Hirschman, Elizabeth C. (1982), The Experiential Aspects of Consumption: Consumer Fantasies, Feelings, and Fun. Journal of Consumer Research, 9 (Sep), 132-140. Kassaijian, Harold H. (1977), Content Analysis in Consumer Research. Journal of Consumer Research, 4 (June), 8-18. 5) Klinger, Eric (1971), Structure and Functions of Fantasy. New York: Wiley-lnterscience. 6) Kotler, Philip and Killer, Kevin Lane. Marketing Management. 12th Edition. Prentice Hall: Upper Saddle River, New Jersey. 7) McGuire, W. J (1963).

Effectiveness of Fear Appeals in Advertising. Advertising Research Foundation, 8) Olson Jerry C and Peter, J Paul. Consumer Behaviour and Marketing Strategy. 5th Edition. McGRWA-HILL. 9) Olson, Jerry C. (1980), Encoding Processes: Levels of Processing and Existing Knowledge Structures, in Advances in Consumer Research, Vol. 7, ed. Jerry Olson, Ann Arbor, MI: Association for Consumer Research, 154-160. 10) Pride, William M and Ferrell, O C. Marketing Concept And Strategies. 10th Edition. Houghton Mifflin Company. 11) Richardson, Alan (1969), Mental Imagery, New York: Springer. 2) Shimp, Terence A. and Ivan L. Preston (1981), Deceptive and Nondeceptive Consequences of Evaluative Advertising. Journal of Marketing, 45(Winter), 22-32. 13) Singer, Jerome L. (1966), Daydreaming: An Introduction to the Experimental Study of Inner Experience. New York: Random House. 14) Solomon, Michael R. Consumer Behaviour: Buying, Having and Being. 12th Edition. Prentice Hall: Upper Saddle River, New Jersey. Tellis, Gerard J (1977), Advertising and Sales Promotion Strategy. Addison Wesley. 15) http://www. almarai. com [pic][pic][pic][pic][pic][pic]

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