In order to understand the meaning of the consumer behavior, it is significant to outline the meaning of the consumer. Consumer is an individual or a group that is engaged in the process of selecting, purchasing and using or disposing a services, products, experiences or ideas to satisfy their desires and needs. In the marketing environment the consumer is referred as an act of purchasing and patterns of aggregate buying that involves post-purchasing and pre-purchasing activities.
Therefore, consumer behavior can be described as a process whereby a consumer directly exercises the act of acquiring, using or disposing of economic goods and services, as well as decision processes involved in conducting such an act. In order to understand this concept, theoretical literature review and empirical review provides an insight into consumer behavior concept. The theoretical literature review outlines the theories that are used to provide a clear definition of the consumer behavior concept. On the other hand, empirical literature contains various studies that have been conducted to support the concept.
- Theoretical literature review
There have been many theories that are developed to support the understanding of the consumer behavior. These theories involve Theory of Family Buying Decisions, CB matrix, and Convergence and Divergence in Consumer Behavior. These are the relevant theories upon which the study of consumer behavior is based on.
- Theory of Family Buying Decisions
The theory of family buying decision is a comprehensive theory that attempt to explain the concept of consumer behavior as a group that makes a joint decision. This theory is significant to the extent that most economic behavior and subsequent decisions engaged by individuals are attached to the family (Sheth, 2011). The theory is deemed to serve various functions: descriptive function in sense that it narrates and describes the phenomenon. It functions as de-limit where it clearly outlines the purpose of the theory and what it excludes. Finally it can serve as integrative and generative function.
The Theory of Family Buying Decision provides a channel for deconstructing the family’s consumption behavior. It proposes a link to the researchers on a certain nature and purpose behind the buying decisions that are engaged by the family. The decision making in the family therefore involves various factors such as social class, predisposition, methods of solving problems and lifestyle.
- Consumer Behavior Matrix
The consumer behavior concept has been critically affected by the emergency of the improved technology that has consequently led to the competitive market environment. It is due to this situation that the financial services industry has developed a Consumer Behavior Matrix. This matrix has helped the banks, for instance, to develop a better understanding to their clients by anticipating, determining and influencing the buying behavior of the consumer.
The consumer behavior matrix is a theory that provides four significant types of consumer behavior which assists to understand the concept of consumers’ buying behavior in the financial services environment. These types involve Repeat-Passive, Rational-Active, No Purchase and Relational-Dependent.
The Repeat-Passive type is a scenario where the consumers portray low level of engagement with the financial services being aware of the salient features of the services. In the
Rational-Active is a quadrant where the consumers involved in the process aspects of participation, control and contact and the involvement is high since they have confidence on the complexity of the financial products offered. No purpose quadrant is constituted by the consumers who do not possess involvement in making transaction decisions and purchase of financial products. Finally, Relational-Dependent is a scenario where high involvement of consumers is anticipated but with low consumer confidence due to products’ complexity and outcome uncertainty.
- Convergence and divergence in consumer behavior
The consumer behavior homogenization is not brought about by the disappearing differences on income and converging technology (Merieke, 2001). However, the cultural differences are the key issue in the heterogeneous of consumer behavior. The convergence of consumers’ income facilitates the expression of value differences. This phenomenon is significant in understanding the values of cultures in a particular country and their effect on the consumer behavior.
- Empirical literature
This area involves various studies that have been conducted by different researcher in an attempt to provide a clear insight on the consumer behavior theory. These studies are highlighted below;
- The Influence of Culture on Consumer Impulsive Buying Behavior
The study was conducted to demonstrate how the cultural factors influence many dimensions of impulsive buying behavior of a consumer, such as normative influences, self identity and suppression of emotion among other factors (Kacen & Lee, 2002). The survey covered consumers in United States, Hong Kong, Australia, Malaysia and Singapore. The findings revealed that impulsive purchasing behavior is systematically facilitated by both regional level factors and individual cultural difference factors.
- The Influence of Familial and Peer-based Reference Groups on Consumer Decisions
The survey was conducted in United States and Thailand on how the peers facilitated the individual’s brand and product decisions on different products on the cultural environment. The influence of family on consumer buying decision was also examined on the context of the two different cultures. The findings of the study supported the theoretical approach and revealed how reference group impacts are different between the peer group and a family member.
- Reference Group Influence on Product and Brand Purchase Decisions
This study examined 645 consumer panel members and 151 individuals to demonstrate how reference group affects the perception of consumption regarding product and brand decisions. Through a repeated measure design product differences such as value expressive, utilitarian influence and informational influence were also examined. The results of the survey revealed how differences in reference group bring about variation between privately and publicly consumed products, necessities and luxuries.
In a nutshell, the above studies are attempting to provide an insight of significant factors that influences the consumer behavior. These factors involve peer influence, family and other reference groups in different cultural context (Blackwell, Miniard & Engel, 2006). These are the external forces that affect the consumer behavior that varies in different cultures across countries. For instance many aspects, such as risk avoidance, hedonism and perceived consequences, of culture in western countries are among influences that interrelate with the impulse buying. The influence by the reference group, on the consumer behavior, varies on a condition whether the participating consumer is from a family or a peer group.
The cultural influence involves ideologies and values that different group of individual or community possesses that affects the way they behaves. The different studies conducted reveals values of an individual are significant in the cultural context. An individual may adopt these values from the family or reference groups to influence their consumption behavior.
Jagdish N. Sheth, (2011). A Theory of Family Buying Decisions (Models of Buyer Behavior). Marketing Classics Press
De Mooij, Merieke (2002). Convergence and divergence in consumer behavior: consequences for global marketing and advertising. Unpublished doctoral dissertation, University of Navarra
Jacqueline J. Kacen, Julie Anne Lee (2002). The Influence of Culture on Consumer Impulsive Buying Behavior. Journal of Consumer Psychology, 12(2), 163–176. Lawrence Erlbaum Associates, Inc
Blackwell, Miniard and Engel (2006). Consumer Behaviour (10th Ed.). Thomson Learning