We tend to overestimate control when we have very little of it, but underestimate control when we have a lot of it. Bragging is the most efficient way to convey a positive image to our constantly expanding social circles. Kay on July 13, in Financial Life Focus. The business world is at war. It has fortified its forces, from experts in branding, social media, and marketing, to psychologists and designers, to win a war for your dollars.
By Gleb Tsipursky Ph. Can we put an end to the scourge of misinformation? Research shows we can. To be happy, buy what you need and share what you have. Splurging to outdo others is not money well spent. Mindful Medicine is here. Value is what patients, doctors, and healthcare systems target. Money cannot buy love, but it can buy happiness—if it is spent on the right things. Navigating the complex factors at work in your relationship with money. The psychology of what we buy, how we choose, and why we need to make sense of it all.
How behavioral science illuminates the forces at play in our decision making. From consumer marketing to organizational behavior and much more. Back Psychology Today Canada. Back Find a Therapist. Cognitive Dissonance, Willpower, and Your Brain. The Psychology of Hothouse Earth. The Leadership Bind During Crisis. What Is Consumer Behavior? Zen and the Art of Marketing Whether products bring happiness depends on how you define happy.
Advertising Is Magic Advertising is a form of sorcery. By Kit Yarrow Ph. Why You Buy In shopping—as in life—it's not just what's inside that counts. By Alain Samson Ph. By Art Markman Ph. Retail Therapy Explained Retail therapy does not work. Emotion Dominates Fast Choices Emotion helps you deal with ambivalence.
Recent Posts on Consumer Behavior. The Body as Metaphor: Perceived risk is defined as "the consumer's perceptions of the uncertainty and adverse consequences of engaging in an activity". The marketing literature identifies many different types of risk, of which five are the most frequently cited: If a consumer perceives a purchase to be risky, he or she will engage in strategies to reduce the perceived risk until it is within their tolerance levels or, if they are unable to do so, withdraw from the purchase.
Services marketers have argued that risk perception is higher for services because they lack the search attributes of products i. Experience goods, such as restaurants and clubs, can only be evaluated with certainty after purchase or consumption. In the case of credence goods, such as many professional services, the consumer finds it difficult to fully appreciate the quality of the goods even after purchase and consumption has occurred.
Difficulties evaluating quality after consumption may arise because the cost of obtaining information is prohibitive, or because the consumer lacks the requisite skills and knowledge to undertake such evaluations.
Typical risk-reduction strategies used include: Within consumer behaviour, a particular area of interest is the study of how innovative new products, services, ideas or technologies spread through groups. Insights about how innovations are diffused i. In addition, diffusion models provide benchmarks against which new product introductions can be tracked.
A sizeable body of literature has been devoted to the diffusion of innovation. However, the exact shape and timing of curves varies in different product markets such that some innovations are diffused relatively quickly, while others can take many years to achieve broad market acceptance.
The diffusion model developed by Everett Rogers is widely used in consumer marketing because it segments consumers into five groups, based on their rate of new product adoption. An innovation is any new idea, object or process that is perceived as new by members of the social system.
Communication channels are the means by which information about the innovation is transmitted to members of the social system and may include mass media, digital media and personal communications between members of the social system.
Time refers to the rate at which the innovation is picked up by the members of the social system. A number of factors contribute to the rate at which innovations are diffused through a social community. Innovations with some or all of these factors are more likely to be adopted quickly. Accordingly, marketing communications may stress the innovation's relative benefits over other solutions to the consumer's problem. Marketing messages may also focus on compatibility and observability.
Marketers can also facilitate adoption by offering limited scale trial e. Studies have shown that the diffusion rate for many new technologies is speeding up. For example, it took decades for the telephone to achieve 50 percent penetration rates beginning in around , but it took less than five years for cellphones to achieve the same penetration rates.
In order to explain the increasing pace of adoption, some have pointed to supply-side issues such as reduced barriers to entry and lower costs of innovation,   while others have argued that consumers drive adoption rates because they place a high value on the convenience of new innovations. Brand-switching occurs when a consumer chooses to purchase a brand that is different to the regular or customary brand purchased. Consumers switch brands for a variety of reasons including that the store did not have the regular brand or the consumer's desire for variety or novelty in brand choice.
In the fast moving consumer goods market FMCG , the incidence of switching is relatively high. A great deal of marketing activity is targeted at brand-switchers.
Marketers are particularly interested in understanding the factors that lead to brand-switching. The concept of switching costs also known as switching barriers is pertinent to the understanding of brand switching. Switching costs refer to the costs incurred by a consumer when he or she switches from one supplier to another or from one brand to another.
Although switching costs are often monetary, the concept can also refer to psychological costs such as time, effort and inconvenience incurred as a result of switching. When switching costs are relatively low, as in the case of many fast moving consumer goods FMCG , the incidence of brand switching tends to be higher.
An example of switching that includes both monetary and psychological costs is when Android or Apple users wish to switch to a different platform, they would need to sacrifice their data, including purchased music tracks, apps or media and may also need to learn new routines to become an efficient user. Channel-switching not to be confused with zapping or channel surfing on TV is the action of consumers switching to a different purchasing environment or distribution channel to purchase goods, such as switching from brick-and-mortar stores to online catalogues, or the internet.
For instance, in Australia and New Zealand, following a relaxation of laws prohibiting supermarkets from selling therapeutic goods, consumers are gradually switching away from pharmacies and towards supermarkets for the purchase of minor analgesics, cough and cold preparations and complementary medicines such as vitamins and herbal remedies. For the consumer, channel switching offers a more diverse shopping experience.
However, marketers need to be alert to channel switching because of its potential to erode market share. Evidence of channel switching can suggest that disruptive forces are at play, and that consumer behaviour is undergoing fundamental changes. A consumer may be prompted to switch channels when the product or service can be found cheaper, when superior models become available, when a wider range is offered, or simply because it is more convenient to shop through a different channel e.
Impulse purchases are unplanned purchases. Recent research carried out by Nielsen International suggests that about 72 percent of FMCG purchases are planned, but that 28 percent of supermarket purchases are unplanned or impulse purchases. Retailers use insights from this type of research to design stores in ways that maximise opportunities for impulse-buying.
Research suggests that affect plays an important role in underlying attitudes, as well as shaping evaluation and decision-making. Consumer researchers have noted the difficulties separating the concepts of affect, emotions, feelings and mood. The line between emotions and mood is difficult to draw and consumer researchers often use the concepts interchangeably.
Studies have found that people in a positive mood are more efficient at information search activities. That, is they are more efficient at processing information, are able to integrate information by identifying useful relationships and arrive at creative solutions to problems.
Due to their efficiency processing information, those who are in a positive mood are generally quicker to make decisions and easier to please.
Research consistently shows that people in a positive mood are more likely to evaluate information positively. Affect may play an important role in impulse-buying decisions.
Research suggests that consumers place higher weightings on immediate affective rewards and punishments, while delayed rewards receive less weighting. This occurs because the immediate emotional gain is a strong driver, and one that consumers can readily visualise whereas the more distant goal lacks sufficient strength to drive choice. Customers who are in a bad mood are more difficult to please. They are slower to process information and consequently take longer to make decisions.
They tend to be more argumentative and are more likely to complain. The relationship between affect and customer satisfaction is an area that has received considerable academic attention, especially in the services marketing literature.
In a meta-analysis of the empirical evidence, carried out in , Szymanski et al. Emotions elicited during consumption are proposed to leave affective traces in memory, traces that are available for consumers to access and integrate into their satisfaction assessments.
Another  meta-analysis finds: In addition, these variables are all significant predictors of brand loyalty. A third  meta-analysis, from elaborates on the concept of brand personality bp: Second, the study finds that the effects of BP are stronger for mature brands than for brands in the early life cycle stages. Third, sincerity and competence have the strongest influence on brand success variables e. Emotion can play an important role in advertising. In advertising, it is common to identify advertising with two different approaches to persuasion: Neuro-imaging studies suggest that when evaluating brands, consumers primarily use emotions personal feelings and experiences rather than information brand attributes, features, and facts.
It is relatively widely accepted that emotional responses require fewer processing resources i. Thus, by definition, loyalty has both an attitudinal component and a behavioural component.
Dick and Basu proposed four types of loyalty based on relative attitude and patronage behaviour: Loyalty marketing programs are built on the insight that it costs times more to acquire a new customer than to retain an existing customer. Broadly there are two types of program: In a Reward Program , the customer accumulates points for each purchase, and the points can subsequently be exchanged for goods or services. Whereas reward programs are motivated by the consumer's desire for material possessions, recognition programs are motivated by the consumer's need for esteem, recognition and status.
Many commercial loyalty programs are hybrid schemes, combining elements of both reward and recognition. In addition, not all reward programs are designed to encourage loyalty. Certain reward programs are designed to encourage other types of positive customer behaviour such as the provision of referrals or providing positive word-of-mouth WOM recommendations. Loyalty marketing can involve the use of databases and sophisticated software to analyse and profile customer loyalty segments with a view to identifying the most desirable segments, setting goals for each segment and ultimately attempting to increase the size of the loyal customer base.
Customer citizenship behaviour refers to actions that are not part of the customer's normal behaviour, that are of a voluntary or discretionary in nature and which are thoughtful, considerate and helpful.
Citizenship behaviour often requires some type of sacrifice on the part of customers. It also has the potential to improve service quality. The service marketing literature identifies a number of distinct types of citizenship behaviour: Traditional models of consumer behaviour were developed by scholars such as Fishbein and Ajzen  and Howard and Sheth  in the s and 70s.
More recently, Shun and Yunjie have argued that online consumer behaviour is different to offline behaviour and as a consequence requires new theories or models. Research has identified two types of consumer value in purchasing, namely product value and shopping value. Product value is likely to be similar for both online and offline shoppers. However, the shopping experience will be substantially different for online shoppers.
In an offline shopping environment, consumers derive satisfaction from being within the physical store environment or retail landscape hedonic motivations. In the case of online purchasing, shoppers derive satisfaction from their ability to navigate a website and the convenience of online searching which allows them to compare prices and 'shop around' with minimal time commitment. Thus the online consumer is motivated by more utilitarian factors. Consumers may use online platforms for various stages of the purchase decision.
Some consumers use online sources simply to acquire information about planned purchases. Others use online for making the actual purchase. In yet other situations, consumers may use online platforms to engage in post purchase behaviours such as staying connected with a brand by joining a brand community or by becoming a brand advocate by posting a product review or providing brand referrals vis social media.
A particular problem that some e-commerce providers have encountered is that consumers who seek information online, turn to bricks and mortar retailers for the actual purchase. Marketers have segmented consumer markets into different kinds of online behaviour in accordance with their behavioural characteristics online. Lewis and Lewis identified five segments based on the way that consumers use the Internet in the purchase decision process: Wendy Moe  argues that in the offline environment, consumers who are shopping in stores can be easily classified by experienced sales employees only by watching their shopping behaviours.
These sales will approach them initiatively because they knew they look like the kind of consumers who are really seeking something to purchase, while other "hanging around" shoppers will generally be ignored by the experienced sales.
Such classification may not appear online, but Moe and Fader  argued that by it is feasible to predict practical buying, surfing and searching action online by investigating click patterns and repetition of visit within online behaviour.
In addition, a report of E-consultancy about "benchmarking of user experience" outlined three kinds of online consuming behaviour as a valuable classification for the research of design of web pages to better serve different kinds of consuming behaviour. The three categories are: As the preceding table shows, the first row indicates the process of a consumer buying a new product, while the second and third row illustrates the positive influences the Internet could have on buying process by creating effective communications with online consumers.
For example, suppose a consumer carelessly see an advertisement about laptops on Wechat , a popular Chinese social media developed by Tecent. He begins to feel that his laptop is a bit out of date and want to buy a new one, which the outcome of good advertisement placed on the daily Internet tool. He doesn't know anything about how to buy a new one as business change so fast today, so he search on Google to find out the answer. On the result page, what he finds out is the promotional ads which mainly come from JD.
Com two main Chinese competitors of online retailer at this field. As always, he used to prefer JD. After careful selection, he makes his order through payment of Wechat , which was placed inside of JD. To gain insights into consumer behaviour, researchers uses the standard battery of market research methods such as surveys, depth interviews and focus groups.
Increasingly, researchers are turning to newer methodologies and technologies in an effort to seek deeper understandings of why consumers behave in certain ways. These newer methods include ethnographic research also known as participant observation and neuroscience as well as experimental lab designs. In addition, researchers often turn to separate disciplines for insights with potential to inform the study of consumer behaviour.
For instance, behavioural economics is adding fresh, new insights into certain aspects of consumer behaviour. Ethnographic research or ethnography has its origins in anthropology. However, marketers use ethnographic research to study the consumer in terms of cultural trends, lifestyle factors, attitudes and the way that social context influences product selection, consumption and usage. Ethnographic research, also called participant observation , attempts to study consumer behaviour in natural settings rather than in artificial environment such as labs.
Different types of ethnographic research are used in marketing including; . Trendspotters such as Faith Popcorn 's BrainReserve make extensive use of ethnographic research to spot emergent trends. Consumer neuroscience also known as neuromarketing refers to the commercial use of neuroscience when applied to the investigation of marketing problems and consumer research. Some researchers have argued that the term consumer neuroscience is preferred over neuromarketing or other alternatives.
Consumer neuroscience employs sophisticated bio-metric sensors, such as electroencephalography EEG , functional magnetic resonance imaging fMRI and eye tracking ,  to study the ways that consumers respond to specific stimuli such as product displays, brands, packaging information or other marketing signals. Consumer neuroscience has become a mainstream component of consumer research methods.
International market research company, Nielsen Research, has recently added neuromarketing to its services by acquiring Innerscope, a company specialising in neuromarketing research thus enabling Nielsen to add neuromarketing research to the suite of services available to clients. From Wikipedia, the free encyclopedia. Behavioral targeting Brand ambassador Broadcasting Display advertising Drip marketing In-game advertising Mobile advertising Native advertising New media Online advertising Out-of-home advertising Point of sale Printing Product demonstration Promotional merchandise Publication Visual merchandising Web banner Word-of-mouth.
Diffusion of innovations and Bass diffusion model. Loyalty marketing , customer retention , brand loyalty , loyalty program , and customer loyalty program. Belief Systems, Religion, and Behavioral Economics.
Influences on the choice of Recommendation Sources, Journal of Consumer Research. Robert Cialdini noted that subjects were prone to rate others as much more likable when they had simply bought them a can of soda.
One of the best ways to employ this tactic to boost customer retention is to follow up with customers after they make their initial purchase with you. Our resource 25 Ways to Thank Your Customers highlights a number of ways you can use surprise reciprocity.
Reciprocity is a powerful force, but in a world where every business is trying to utilize it, you can stand out by surprising your customers. This is an outstanding way to let them know you appreciate their business. Help Desk software - Customer Support Software.
Analysis paralysis and consumer behavior 2. Embrace the power of internal labels 3. Understand the three types of buyers 4. Highlight strengths by admitting shortcomings 5.
Use urgency the right way 6. Make their mind light up instantly 7. Establish a rival or enemy 8. Stand for something meaningful 9. Play the devil's advocate Keep customers on their toes. Product We make a web-based help desk for teams that insist on a delightful customer experience.
More about the product Blog Every week we publish a new article on customer loyalty and building a customer-centric company. Read the latest Resources Read through more resources just like this one along with online guides and infographics.
Chapter 1 Analysis paralysis and consumer behavior We all know that small things make a big difference when it comes to copywriting. Every penny will help.
The wording may be subtle, but the resulting effect was drastic. The Results People who were asked the second variation were almost twice as likely to donate. The Best Part of this Whole Study Donors were twice as likely to give in response to the second question, but the amount they gave did not diminish. Chapter 2 Embrace the power of internal labels You might think this refers to brand labels, but far from it.
Sounds like bad advice, right? The Study The study examined the voting patterns of adults to see if labeling them had any affect on their turnout at the polls. Motivating Voter Turnout by Invoking the Self. The Study 3 Types of Buyers Source: Reduce Pain Points with Bundling Neuroeconomics expert George Loewenstein notes that all consumers especially conservative spenders prefer to complete their purchase in one easy fell swoop rather than purchase multiple accessories separately.
Chapter 4 Highlight strengths by admitting shortcomings Is it ever a good idea to admit to your faults? The Results The test subjects viewed the first company far more favorably than the second. Chapter 5 Use urgency the right way Creating a sense of urgency in your copy is one of the oldest tricks in the book How can you prevent this from happening to you?
The Study The research is a classic study by Howard Leventhal where he analyzed the effects of handing out tetanus brochures to subjects. Chapter 6 Make their mind light up instantly There are few things our brains love more than immediate stimulation. Customers feel instant gratification when they are rewarded after doing business with you. Chapter 7 Establish a rival or enemy In the business world, meaningful connections are paramount to your success.
Networking is certainly important, but that being said, you still need an enemy. They were later divided into groups based on their choices. The Results Tajifel found that he could create groups of people that would show loyalty to their supposed in-group and outright discriminate against outsiders, all with the most trivial of distinctions.
The marketing world has an important lesson to learn from this process.
Consumer behavior research from social psychologist Fiona Lee states that admitting shortcomings is a great way to simultaneously highlight your strengths.
Companies study consumer behavior to learn how consumers respond to or use products. Whether testing new products or services, refining existing products or designing new marketing campaigns, collecting data about consumer behavior helps companies better target their efforts.
Food Safety Survey (FSS) reports, health and diet surveys, and other surveys and research. Consumer behavior issues including perception, decision making, information search, attitudes, beliefs, categorization, consumer research methods, learning.
This article analyzes 12 years of recent scholarly research on consumer behavior published in the five leading international journals in this field. Analyzing academic contributions to a specific area of research provides valuable insights into how it has evolved over a defined period. The approach was to briefly discuss content analysis . Consumer behavior is the study of how people make decisions about what they buy, want, need, or act in regards to a product, service, or company. It is critical to understand consumer behavior to.