Welcome to Topic 5: Consumers under the Microscope. In this topic you will learn about:
- The consumer decision-making process
- Factors influencing consumer behaviour
- The organisational buyer
- The customer journey.
This topic provides an insight into the decision-making process and behaviour of a buyer when purchasing a product and the various factors that can influence these thought processes and behaviours. Understanding the behaviour of customers is critical for the success of marketing strategies and plans, hence the customer journey mapping tool will be introduced to visualise how customers might interact with a business.
These relate to the Subject Learning Outcomes:
- Demonstrate an understanding of the importance in business practice of market orientation.
- Evaluate market conditions and consumer needs when forming marketing strategies.
Welcome to your pre-seminar learning tasks for this week. Please ensure you complete these prior to attending your scheduled seminar with your lecturer.
Click on each of the following headings to read more about what is required for each of your pre-seminar learning tasks.
Read Chapter 5 and Chapter 6 of Kotler, P & Armstrong, G 2021, Principles of Marketing Global Edition, 18th edn., Pearson.
Read the following journal articles:
- Lemon, KN & Verhoef, PC 2016, ‘Understanding customer experience throughout the customer journey’, Journal of Marketing, 80(6):69-96.
- Rosenbaum, MS, Otalora, ML & Ramírezb, G 2017, ‘How to create a realistic journey map’, Business Horizons, 60(1):143-150.
- Santos, S & Goncalves, HM 2021, ‘The consumer decision journey: a literature review of the foundational models and theories and a future perspective’, Technological Forecasting and Social Change, 173:1-14.
Read the following web articles and industry reports:
- Zenn, J 2019, We break down B2B vs. B2C marketing, Hubspot
- Court, D, Elzinga, D, Mulder, S & Vetvi, OL 2009, The consumer decision journey, McKinsey Quarterly
- Kaplan, K 2016, When and How to Create Customer Journey Maps, Nielsen Norman Group
- Hogg, S 2018, Customer journey mapping: The path to loyalty, Think with Google
- Agius, A 2021, How to Create an Effective Customer Journey Map [Examples + Template], Hubspot
- Koscierzynski, M 2020, The modern consumer: decision making journey, Deloitte
Read and watch the topic content.
There are discussion forum activities for this topic, which will enhance your knowledge and give you the opportunity to interact with your peers. You can access the activities by clicking on the following links. You can also navigate to the forum by clicking on 'MKT100 Subject Forum' in the navigation bar for this subject.
- Topic 5: Forum Activity 1 - Reflection
- Topic 5: Forum Activity 2 - You, as a consumer
The study of consumer behaviour looks into why and how customers make the buying decisions they do. Consumers (also referred to as buyers) are faced with many questions and decisions when purchasing a product, for example, “Where should I look for information?”; “Where should I buy the product?”; and “What product attributes are important to me?”
By studying consumer behaviour, marketers can get a better understanding of their customers through exploring the reasons behind their purchase and the process of their purchase.
The consumer decision-making process
In the following video, we discuss the decision-making process. Armstrong et al. (2020) suggest that the buying process is rational in nature and follows prescribed steps. The steps include:
- Recognition of a problem or need
- Information search
- Evaluation of alternatives
- Purchase decision
- Post purchase evaluations.
As mentioned in the video, buyers may not go through all five steps of the decision-making process for products involving routine or habitual behaviour with relatively low risk. For example, you are unlikely to stop and think about buying a bottle of milk, or perhaps you go through it subconsciously. However, if you were to purchase a new car, that would be a different story! This is the difference between a low-involvement and a high-involvement purchase decision (Quester, Pettigrew & Hawkins 2011).
The following table illustrates the concept of low involvement purchase and high- involvement purchase decision.
| Stage in decision process | Low-involvement purchase decision | High-involvement purchase decision |
|---|---|---|
| Need recognition | Trivial to minor | Important and personally meaningful |
| Information search | Internal to limited external search | Extensive search |
| Alternative evaluation | Few alternatives evaluated on few performance criteria | Many alternatives considered using many performance criteria |
| Purchase stage | One-stop shopping where substitution is very possible | Multiple store visits with substitution less likely |
| Post purchase | Simple evaluation of performance | Extensive performance evaluation, use and disposal |
Knowledge check
Complete the following activity.
Factors influencing consumer behaviour
Consumers (buyers) are likely to be influenced by some external and internal factors. External factors are more observable and measurable in nature. External factors include culture, reference groups, class, household and so on. Internal factors, on the other hand, are within consumers – difficult to measure and less observable. Internal factors include needs and wants, perceptions, personality, images and attitude (Armstrong et al. 2020).
Examples of influencing factors faced by consumers can include:
Cultural - subculture, social class and culture.
Social - groups and social networks, family, roles and status.
Personal - age and lifecycle stage, occupation, economic situation, lifestyle, personality and self-concept.
Psychological - motivation, perception, learning, beliefs and attitudes.
Adapted from Principles of Marketing Global Edition, by P Kotler & G Armstrong, 2021, 18th edn., Copyright 2021 by Pearson Education Limited.
The following video explains external and internal factors in more detail and with specific examples.
The organisational buyers
The term ‘customer’ spans beyond just the end users in business-to-consumer (B2C) markets who purchases a product for personal use. It also includes business-to-business (B2B), customers too. For example, an electronics manufacturer supplying printers to a publishing house.
Similar to the B2C markets, organisational or business buyers also go through a decision-making process when purchasing a product, and have their own set of influences too. One of the additional factors to consider is that B2B purchases often involve multiple participants, such as users, buyers, deciders and gatekeepers (Armstrong et al. 2020).
Environmental - economy, supply conditions, technology, politics/regulation competition, culture and customs.
Organisational - objectives, strategies, structure, systems, procedures.
Interpersonal- influence expertise authority dynamics.
Individual - age/education, job position, motives, personality, preferences, buying style.
Adapted from Principles of Marketing Global Edition, by P Kotler & G Armstrong, 2021, 18th edn,. Copyright 2021 by Pearson Education Limited.
Read each of the following articles, which highlight the differences between B2B markets and B2C markets:
- B2B vs B2C Marketing: Understanding the Differences
- B2B and B2C Marketing: What’s the Difference?
- B2B vs. B2C Marketing: The Similarities and Differences.
The customer journey
Understanding how the customer interacts with businesses at multiple touchpoints throughout their journey is vital in delivering positive customer experiences. Businesses with a customer-centric approach who understand their customers’ journey from awareness, inspiration, consideration to purchasing and beyond, and the customers’ touchpoints along the journey, tend to have a competitive advantage (Hoffman & Bateson 2017).
A tool available to accomplish this is customer journey mapping, which focuses on the customer’s perspective and the service delivery system (Lemon & Verhoef 2016). Richardson (2010) explains that journey maps illustrate the steps a customer goes through when engaging with a company. This includes searching for the business or product, buying the product or service, using the product or service and disposing of the product.
The following video explains how a company can map its customer journey through a workshop.
While B2C and B2B customers both go through five stages of purchase decisions, how they experience it and the interactions they have with a business do differ. The following diagram highlights the differences between a B2C customer journey and a B2B customer journey.
Adapted from Customer journey map: The key to understanding your customer, by Delighted 2021, Copyright 2021 by Delighted, LLC, https://delighted.com/blog/guide-to-customer-journey-mapping
For examples of customer journey mapping and its application, please refer to the resources within your pre-seminar learning tasks.
Knowledge check
Complete the following eight (8) tasks. Click the arrows to navigate between the tasks.
Key takeouts
Congratulations, we made it to the end of the fifth topic! Some key takeouts from Topic 5:
- Consumers go through a decision-making process when purchasing a product.
- There are cultural, social, personal and psychological factors that can affect the purchasing process.
- Customers do not just include people who purchase products for personal use (B2C), it can include organisations that purchase products for business use (B2B).
- We can better understand our customers using the customer journey mapping tool to explore how our customers interact with us as well as their actions, thoughts and feelings in each stage of interaction.
Welcome to your seminar for this topic. Your lecturer will start a video stream during your scheduled class time. You can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then clicking 'Join' to enter the class.
Click here to access your seminar.
The learning tasks are listed below. These will be completed during the seminar with your lecturer. Should you be unable to attend, you will be able to watch the recording, which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.
Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)
In-seminar learning tasks
The in-seminar learning tasks identified below will be completed during the scheduled seminar. Your lecturer will guide you through these tasks. Click on each of the following headings to read more about the requirements for each of your in-seminar learning tasks.
Consumer behaviours are always changing and often shaped by the macro-environment. It is not just about the changing consumer, but also their changing preferences, purchasing patterns and so on.
Working in a breakout room assigned by your lecturer during the scheduled seminar, this learning task will require you to research consumer behaviour trends in 2021 and explain how those trends affect businesses. Your lecturer will request that you present the findings back to the class.
You are encouraged to research independently, however, a curated list of web articles is available for you in the Additional resources section if you need somewhere to start.
In this learning task, you will put what you have learned into practice and complete a customer journey map. In the same breakout room as before, use an organisation from Topic 4, Learning Task 2 and complete a customer journey map for two (2) of their customer personas.
It is up to your group how you would like to present your journey maps, either based on the examples from the pre-seminar learning tasks or this Customer Journey Mapping Template.
Your lecturer will request that you present the findings back to the class
Welcome to your post-seminar learning tasks for this week. Please ensure you complete these after attending your scheduled seminar with your lecturer. Your lecturer will advise you if any of these are to be completed during your consultation session.
Click the following headings to learn more about your post-seminar learning tasks.
Reflect on this topic. Prepare a list of key terms with their definitions and summarise the key points in your own words. Share these with your lecturer in your reflective journal.
You can also access the reflective journal by clicking on ‘Journal’ in the navigation bar for this subject.
Consider and determine the target market for your company in Assessment 2 including its demographics, motivations, frustrations, needs & wants and purchasing behaviours.
Each week you will have a consultation session, which will be facilitated by your lecturer. You can join in and work with your peers on activities relating to this subject. These session times and activities will be communicated to you by your lecturer each week. Your lecturer will start a video stream during your scheduled class time. You can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then clicking 'Join' to enter the class.
Click here to access your consultation session.
Should you be unable to attend, you will be able to watch the recording, which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.
Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)
- Bakhtiari, K 2021, Cultural trends that will shape consumer behavior in 2021 and beyond, Forbes
- Brenner, M 2021, 5 consumer behavior trends marketers are watching in 2021, Marketing Insider Group
- Charm, T, Coggins, B, Robinson, K & Wilkie, J 2020, The great consumer shift: Ten charts that show how US shopping behavior is changing, McKinsey & Company
- Charm, T, Dhar, R, Haas, S, Liu, J, Novemsky, N & Teichner, W 2020, Understanding and shaping consumer behavior in the next normal, McKinsey & Company,
- KPMG 2021, Me, my life, my wallet, KPMG International
- Omale, G 2020, 3 top consumer trends for marketers to watch in 2021, Gartner
- Raynor, L 2021, Understanding The Changing B2B Buyer Journey, Forbes
References
- Agius, A 2021, How to Create an Effective Customer Journey Map [Examples + Template], https://blog.hubspot.com/service/customer-journey-map
- Armstrong, G, Denize, S, Volkov, M, Adam, S, Kotler, P, Ang, SH, Love, A, Doherty, S & Esch, PV 2020, Principles of Marketing, 8th edn., Pearson.
- Court, D, Elzinga, D, Mulder, S & Vetvi, OL 2009, The consumer decision journey, McKinsey Quarterly, https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-consumer-decision-journey
- Delighted 2021, Customer journey map: The key to understanding your customer, https://delighted.com/blog/guide-to-customer-journey-mapping
- Gibbons, S 2018, Journey Mapping 101, Nielsen Norman Group, https://www.nngroup.com/articles/journey-mapping-101/
- Hoffman, K.D, Bateson, J., 2017, Services marketing: Concepts, strategies & cases, 5th edn., Cengage Learning.
- Hogg, S 2018, Customer journey mapping: the path to loyalty, https://www.thinkwithgoogle.com/intl/en-aunz/consumer-insights/consumer-journey/customer-journey-mapping/
- Kaplan, K 2016, When and How to Create Customer Journey Maps, Nielsen Norman Group 2016, https://www.nngroup.com/articles/customer-journey-mapping/
- Koscierzynski, M 2020, The modern consumer: decision making journey, Deloitte, https://www2.deloitte.com/content/dam/Deloitte/us/Documents/CMO/us-modern-consumer-decision-making-journey.pdf
- Kotler, P & Armstrong, G 2021, Principles of Marketing Global Edition, 18th edn., Pearson.
- Lemon KN & Verhoef, PC 2016, ‘Understanding customer experience throughout the customer journey’, Journal of Marketing, 80(6):69-96.
- Quester, P., Pettigrew, S., and Hawkins, D., 2011. Consumer Behavior: Implications for Marketing Strategy. New York: MaGraw-Hill.
- Richarson, A 2010, Using Customer Journey Maps to Improve Customer Experience, Harvard Business Review, https://hbr.org/2010/11/using-customer-journey-maps-to
- Rosenbaum, MS, Otalora, ML & Ramírezb, G 2017, ‘How to create a realistic journey map’, Business Horizons, 60(1):143-150.
- Santos, S & Goncalves, HM 2021, ‘The consumer decision journey: A literature review of the foundational models and theories and a future perspective’, Technological Forecasting and Social Change, 173:1:14.
- Temkin, BD 2010, Mapping the customer journey, Forrester Research, http://crowdsynergy.wdfiles.com/local--files/customer-journey-mapping/mapping_customer_journey.pdf
- Vaughan, P 2021, How to create detailed buyer personas for your business, HubSpot, https://blog.hubspot.com/marketing/buyer-persona-research
- Zenn, J 2019, We break down B2B vs. B2C marketing, Hubspot, https://blog.hubspot.com/agency/differences-b2c-b2b-marketing
