Buying Behavior

Buying Behavior

Buying Behavior Jonathan Poland

Buying behavior refers to the actions and decisions made by consumers when purchasing goods or services. These are relevant to positioning and promoting brands, products and services. This includes the process of researching, comparing, and selecting products, as well as the factors that influence these decisions.

Some common factors that can affect buying behavior include a consumer’s personal values and beliefs, their income and financial situation, the availability of information about the product, and the opinions of friends and family. Understanding buying behavior is important for businesses because it helps them to develop effective marketing and sales strategies, and to design products and services that meet the needs and preferences of their target customers.

The following are illustrative examples of buying behavior.

Complex Buying

An involved process of research whereby a customer develops requirements and decision criteria and investigates what products might suit their needs. For example, a woodworking enthusiast who researches what type of saw they should purchase.

Comparison Shopping

Comparing the features and prices of several products. For example, a customer who compares light bulbs online with parameters such as durability, brand, brightness and price.

Ambiguity Avoidance

Avoiding products and services that involve uncertainty. For example, an Australian in France who doesn’t try the local restaurants and cafes because they are unsure about the menu and how ordering works. Such a customer is likely to end up at a chain restaurant they recognize despite a vague desire to experience the local culture. This gives incentives for restaurants in tourist areas to post signs such as “English service” or “English menu” that reduce uncertainty for travelers.

Risk Avoidance

Avoiding choices that involve some perceived risk. For example, avoiding a food product you perceive as full of unhealthy chemicals.

Brand Recognition

Customers are more likely to trust brands they recognize, even if they have no information beyond recognizing a logo or brand name. This is essentially a naive type of risk avoidance.

Relationship Building

Customers commonly view products, services and brands as relationships whereby they will purchase more when they are shown respect and consideration. For example, a customer who regularly returns to a beauty salon because the staff have always been friendly and helpful.

Anchoring

The practice of heavily relying on some piece of information. For example, a home owner negotiating with a general contractor who heard that their neighbor got a 20 percent discount. This may cause the customer to reject the contractor if they can’t reach this number, even if the contractor has the best overall offer.

Competitive Buying

Buying driven by competition such as a fear of missing out. For example, a fan of a particular brand who finds that new releases are often sold out. This fan may view other customers as competition and come up with ways to try to “win” by out purchasing others.

Sense of Urgency

A general sense that a purchase decision must be made quickly. For example, a travel booking site that says “only one room left at this price” in an attempt to create a sense of urgency in the customer.

Social Proof

Using social information to make purchasing decisions. For example, a student who purchases a particular brand of laptop because virtually everyone in their school has the same brand.

Status Seeking

Social status is the respect an individual enjoys from others. Such respect can be earned with behavior or it can be represented with consumer goods such as a brand that symbolizes wealth, coolness or intelligence. This causes purchasing behavior to be driven by status seeking whereby an individual evaluates a product based on its perceived status and image.

Scarcity Seeking

Seeking things that are limited edition or one of a kind. This is often a type of competitive buying whereby an individual “wins” by purchasing things that are difficult to purchase due to limited supply. Suppliers may capitalize on this by producing a great number of different “limited” items.

Variety Seeking

Purchasing things because they seem new and interesting without much research. For example, a customer who buys a chocolate bar because it’s a favor they’ve never seen before.

Resistance to Change

A customer who stops buying a product because it changed its design, quality, style, features, functions or price. For example, a popular vehicle that sees a sudden sales drop after updating the model in a way that alienates their core customers.

Sticky Prices

Sticky prices are customary prices for a product or service whereby consumers may resist change to the price. For example, if drinks at restaurants in a particular city are customarily $5 or less, demand may drop strongly if you try to charge $6.

Psychological Prices

Customers attach all kinds of abstract meaning to prices. For example, $4 may be perceived as a cheap and honest price for a beverage such that a customer purchases several drinks in a meal. Another price such as $3.95 or $4.99 may be perceived as less cheap or less honest such that the customer only purchases one drink. Psychological prices are situational, cultural and personal such that they can only be measured with market testing — theory isn’t necessarily going to work.

Price Sensitivity

Price sensitivity is how important a low price is to a customer for a particular product category. For example, customers who only purchase shirts when they are on sale or customers who will actively avoid purchasing fashions that are on sale for fear they are liquidation items or unpopular styles.

Information Overload

A customer who attempts a complex purchasing process who quickly feels overwhelmed with information. This would benefit products that explain things well. It may also benefit the customer’s regular purchases as the customer may give up on an attempt to change.

Decision Fatigue

Feeling of exhaustion around a decision that may lead to poor choices. For example, a tourist walking around a city who passes 20 restaurants who skips each due to overthinking who then decides to choose the next restaurant they see. Another example of how reducing decision complexity with brand recognition and clear selling points benefits sales.

Stocking Up

Purchasing a large number of items. Often done to take advantage of a sale or everyday low price.

One-Stop Shop

Purchasing from a place that has everything that you need in order to make shopping more time-efficient. Alternatively, a customer may avoid shopping experiences they perceive as time-wasting. For example, a customer who stops shopping on a site because they are constantly out-of-stock.

Reordering

Selecting the same product or service again and again because it suits your requirements. Reduces decision complexity and costs related to purchase dissatisfaction.

Convenience Purchases

Purchasing from a place that is convenience regardless of price or variety. For example, office workers who buy lunch in the basement of their building who seldom walk to restaurants just down the street.

Compulsive Buying

Purchasing based on emotion as opposed to logic. This implies that an individual lacks self-control and is purchasing something they logically know they don’t need or can’t afford. For example, an individual who spends their rent money on collectible hobby items.

Splurging

Splurging is an extended campaign of purchasing beyond an individual’s norm. For example, an individual who usually chooses budget travel options who suddenly books first class flights and luxury hotels. In some cases, splurging has some reasonable reason behind it such as a special occasion or self reward. It can also be an extended campaign of compulsive buying.

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