Consumer Behaviour, Psychology & Neuromaketing
Consumer Behaviour, or Consumer Psychology, is the study of how and why people buy things. Experts analyse the mental, emotional and behavioural changes that occur during and after a purchase. The discipline borrows ideas and techniques from related fields, such as Neuromarketing, Behavioural Economics and Sociology.
What is Consumer Behaviour?
The study of Consumer Behaviour emerged in the mid-20th-century, as marketing experts embraced scientific approaches to their discipline. It focused initially on understanding the Purchase Decision: what makes people decide to buy a product. Social and behavioural studies revealed patterns of consumer choice and established new techniques, such as Market Segmentation, that have become standard practices.
Experts in Consumer Behaviour now consider a range of questions and topics, such as Consumer Loyalty, User Experience, and Customer Affect (emotional responses). The field has expanded to incorporate insights from Neuromarketing and Cognitive Biases now form a major part of the study of Consumer Behaviour.
An Introduction to Consumer Behaviour
In the first half of the 20th-century, marketing theory was dominated by the study of Commodities, Systems and Agents (the ‘Classical’ Schools). In the second half of the century, new perspectives based on individual behaviours and styles emerged.
Marketers would love to be able to see exactly what makes a customer choose a particular product. If they could install a recording device inside a customer’s mind, like the Black-box in an aeroplane’s cockpit, what would they find?
Unlike an aeroplane’s black box, there is no way to really know what goes on inside a customer’s head. Models of consumer decision-making explore external factors (needs, desires, exposure to advertising) and internal factors (individual preferences, personality and beliefs).
Since the publication of Philip Kotler’s Marketing Management in 1967, a five-stage model of the buying process has been established.
Five-Stage Model of Consumer Buying Behaviour
- Problem/Need – The customer realises they need to buy something.
- Search – The customer looks for information.
- Evaluation – The customer explores options and alternatives.
- Purchase Decision – After the customer has identified the product they want, they still have to buy it.
- Post-purchase – The customer continues to think about the product they have bought.
Consumer Style Inventory
Another way of thinking about Consumer Behaviour is to explore the consumers themselves. In 1986, Sprotles and Kendall developed a consumer style inventory, proposing eight characteristics that describe a customer.
- Perfectionist: The customer looks for the best quality of product.
- Brand-aware: The customer prefers brands and designer labels.
- Hedonist: The customer treats shopping as a form of enjoyment.
- Price-aware: The customer seeks low prices, sales, or discounts.
- Fashion-aware: The customer likes to be up-to-date and seeks variety.
- Impulsive: The customer is prone to spontaneous purchases.
- Confused: The customer experiences too much information or choice.
- Habitual: The customer is loyal to brands and follows a routine.
Both the Consumer-style and Five-stage model of Consumer Behaviour are subject to cultural variation and interpretation. In both cases, the framework must be used alongside real-time data to give the models predictive value. Within modern marketing campaigns these models are primarily used for Market Segmentation.
Neuromarketing applies neuropsychology to the study of Consumer Behaviour. The discipline uses two types of neuropsychological data: physiological and cognitive.
Physiological experiments, advocated by groups such as the Neuromarketing Science and Business Association, involve techniques such as EEG (Electroencephalography), fMRI (a way of monitoring neural processes through blood-flow), and Eye-tracking, to explore subconscious processes. However, as is noted in an editorial from the Harvard Review of Psychiatry, these methods provide ambiguous date, are impractical for real-world scenarios, and require subjective analysis. They are most applicable to the study of advertising.
Cognitive psychology uses surveys, problem-solving tasks, and experimental scenarios. This data is collected by Social Scientists such as Daniel Kahneman, and used to inform models of decision-making.
Kahneman’s Thinking Fast and Slow identified the prevalence of problem-solving heuristics in most situations. These heuristics, or Cognitive Biases, are what the majority of Neuromarketing is based on.
Cognitive Biases are consistent errors in perception that lead people to make predictable and irrational decisions. For example, the Anchoring Effect describes how most people are influenced by direct comparisons when guessing how much a product is worth. Alternatively, Social Proof and Scarcity enhance a product’s perceived value without directly affecting it.
Since the publication of Richard Thaler’s Nudge in 2008, a number of sub-disciplines have emerged using the principle of Choice Architecture and contextual influence.
Nudge Marketing seeks to arrange the Choice Architecture facing a consumer, in order to make a particular decision more appealing. This form of persuasion can be achieved by changing the default in a situation or by encoding the environment.