Unit 37 - Consumer Behaviour and Insight

UNIT 37- CONSUMER
BEHAVIOUR AND
INSIGHT

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
P 1 Analysis of the stages of consumer decision-making for cosmetics products.......................1
P 2 Importance of understanding consumer decision-making for marketer................................2
LO2 .................................................................................................................................................4
P 3 Difference between the decision-making process of B2C & B2B........................................4
P 4 Methods of market research use for understanding decision-making process......................6
LO3 .................................................................................................................................................7
P 5 Factors that influence the decision-making process of B2C and B2B..................................7
CONCLUSION................................................................................................................................9
REFERENCES\.............................................................................................................................10

INTRODUCTION
Consumer Behaviour refers to studying the individual's perceptions & thoughts related to
the product or service offered by the company. It refers to the study of individual's, organizations
or groups, includes all the activities that linked to purchase of goods or services, involves
consumer's emotional and mental responses. It is essential as well as important for companies to
study consumer's behaviour prior to launching a product or modifying the product. In order to
gain competitive advantage by creating & retaining the consumer's, organizations must study
consumer's behaviour. An organization can only achieve their objectives when they satisfy
consumer's and fulfil their needs. The present report will highlight the stages of consumer's
decision-making path for L'Oreal cosmetics products(Fatima and Lodhi, 2015). Further, in the
report it is described about the importance of studying consumer behaviour by the marketers.
The differences in decision-making process of B2C & B2B and various approaches to market
research.
LO1
P 1 Analysis of the stages of consumer decision-making for cosmetics products
Consumer decision-making :
It defines decision-making different stages from which consumer undergoes. And it is important
for the marketers to understand it so that they can able know what need is in consumer mind.
(Stages) consists :
Need recognition :
Need recognition is a vital factor which shows buying of products and services. For purchasing
any good there is a need behind it. For example a girl name X is going to her sister marriage and
for that she will need cosmetics products and this will bring demand for cosmetics products.
There is a need behind every purchase, nowadays there is lot of demand for cosmetics products
as people go to marriage, event they need beauty products, so they can look better. Need attracts
more when need and price match each other like if Y need cosmetic products, and he gets
product within his budget then need get fulfil(Majid, Sabir and Ashraf, 2015).
Information gathering :
Need for particular product and services creates an excitement in a businessman mind that after
knowing need how he can gather more information about the need and its customer. When loreal
cosmetic company find that there is large number of girls which is in need of products which can
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make them satisfied and without causing their skin it will help in finding more information about
market and the material which it will need for making such type of product. And there are many
sources from which it can gather information like getting information from society, social media,
or by experts of particular field. So information gathering is a second stage after knowing
consumer need. Information gathering is not an easy task as it needs lot of research and study it
can be gathered by different method like giving questionnaire, feedback forms, getting
knowledge from past data and from other different ways(Ali, Halim and Ahmad, 2016).
Evaluation of alternatives :
Getting all the information from different sources now the next step is to choose the best
alternative form the selected alternatives. Cosmetics is having a large market so to be unique in
cosmetics business you need better and cheaper product than your competitor and when you
gather all the information you need to select the best alternative which makes your product
different from others product. Choosing a right alternative is very hard decision because one
mistake can make affect all your business.
Purchase :
Purchase is third stage in decision-making and it is decided after going through all earlier stages.
First knowing need of consumer then gather all the information from the market then selecting
the best alternative from the information which you have collected then put all the knowledge of
market purchase the product which differs you from other competitors(Chan and Mansori, 2016).
Purchase should be according to the customer needs and it should be from the best supplier
which make you available your cosmetics product at minimum cost and with the best quality.
Post-Purchase :
It is also known as a review stage for the company. In this stage customer gives review to the
product they had used, does the product meet their expectations or not. If customer is satisfied
with product, and they like to use the products (regularly) than it will lead to customer loyalty
with your brand. And if they are not satisfied with the product then it will be a learning lesson to
you and after that come with better and attractive product which makes customers to purchase
product(Lau, 2017).
P 2 Importance of understanding consumer decision-making for marketer
For marketers consumers are god. Consumers are a vital part of the marketing environment, and
it is important to understand how consumer influence whole market. Knowing about the
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consumer they get that consumer goes with five decision-making stages. The marketers should
know all the stages so that they can take right decision. Knowing customer the biggest challenge
is to know what is going in mind of consumer. Because there are many factors which affect the
mind of consumer, cultural factors, taste and preference, price factor and many more.
If marketer is selling cosmetics products then they should be knowing about all
related factors to it like which type of flavour is most popular, which fragrance is more attractive
and how they can provide their customer the best quality product which will not harm their
consumers skin and provide them good result. As consumer will get good result they will
become loyal to product, and they also market your product indirectly by telling their friends,
family members and other social groups(Korai, 2017). Marketer should provide their consumer
sample so that they can use it and know the quality of your products and providing sample is a
great way of marketing your product.
Marketing is not an easy task so to attract consumer they have to do a lot more
like organizing events, advertisement through giving coupons discount because consumer is key
to success when consumer is satisfied with your product and service than you will able to get
good growth in long term.
Marketers must know their business market size so that they will able to know about
overall demand of their products. Larger the market larger the chance of growth. Business is
nothing without their consumer so providing product is not only the thing which will satisfy
consumer there are lot more things like quality of service, good return policy and many more.
Consumer decision-making can also be understood by making questionnaire in which we can
make consumer write about their need that what type of skin problem they are facing or what
fragrance they like most which are the basic thing they use in routine(Alhedhaif, Lele and Kaifi,
2016). After selling their products in market they can provide feedback facility in which they
write good and bad things about their product.
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LO2
P 3 Difference between the decision-making process of B2C & B2B
BASIS B2C B2B
DIFFERENCE IN SKILL-
SET
In B2C market research
business, people require clear
communication skills as to
resolve customer's problems
and for even knowing their
view point regarding the
product. Full knowledge of the
product, so that they can
provide further to the
customer's(Aisyah, 2017). The
person should have empathy
towards customer's and must
have patience. For example:-
Retailers must possess good
communication and
convincing skills.
In B2B market research,
people require different skill
sets from director to telephone
interviewer. The success of
this research project depends
on the skill-set & expertise of
telephone interviewer. As, the
interviewer needs to treat
every contact with utmost care.
The respondent can an owner
or a board member, so
interviewer has to build
rapport and gain cooperation
in order to achieve success.
For example:- Suppliers
should provide with the
required knowledge, strategy
& solution of customer's to
beauty brands.
DATA COLLECTION
In, B2C businesses use mixed
methodologies such as
collecting data through mobile
technologies, By using online
survey tools the businesses
collect data from the
customer's(Hassali and et.al.,
In, B2B businesses use
telephones and webs to collect
information. As face-to face
interviews are not possible due
to time and cost constraint and
it becomes a lengthy process to
schedule for Interview and
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METHODOLOGIES 2015). It is one of the most
effective tools to gather data
from maximum people by
offering specific and straight
questions. For example:-
Customer's use various mobile
applications and with the use
of internet fill the forms online
and answer the questions.
conducting it. For example:-
Suppliers simple use
telephones to call and order the
required cosmetics products.
SAMPLE SIZE
In majority cases, the sample
size is bigger in B2C
businesses. These are accurate
data's as they are large. The
businesses can reply on the
sample as they represent the
large population. For
example:- through surveys
data can be collected from a
large scale population for the
cosmetic product and so can be
reliable(Shimpi, 2016).
The sample size in B2B is
comparatively smaller as the
market search player is
invariably smaller than B2C.
As researchers believe in
80/20 i.e. businesses 80%
consider their revenues and
20% about the customer's. The
data need to accurate as it
small. For example:- Less
number of business are in this
process so to get the accurate
results those few people need
to give accurate answers.
COMPLEXITY OF
DECISION-MAKING
PROCESS
The decision-making process
is comparatively less complex
in B2C businesses as it is
straight forward, the decision
has to be made according to
customer's choices from
products to packaging. But the
Decision-making process is
complex in B2B as there are so
many parties that has to be
considered while making
decisions. The parties(finance,
technical), their influence on
the process of decision-
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decision is taken only for
customer's, the businesses
don't have to think about other
parties. Example:- Customer's.
making, and the influencing
forces such as internal &
external. Example:- Finance,
Technical & Marketing etc.
P 4 Methods of market research use for understanding decision-making process
Research methods are used to by the companies in making decisions. By using various
research methods organizations can gather information about the customer's needs & demands.
Any kind of issues or deficiencies in the product or service can be solved through market
research(Seth and et.al., 2016). Two types of research methods are used for market research are
described as follows:-
Primary Market Research- This type of research includes the data collection straight from the
target customer's of the company. This type of research includes various techniques such as
interviews, online survey, field test etc. Feedback is collected from the consumer's directly
through online questionnaire or by asking them face to face. This market research helps in
gathering first-hand information, it is more reliable and efficient. Companies even collect
feedbacks from their customer's that are used to measure the demand by the consumer's for new
products or can modification in exiting product. Techniques of primary market research are:-
 Market Research Survey:- Surveys are the most effective methods to collect data from
the customer's. It is one of the basic & old technique used to gather information. Survey
are mostly used to collect feedbacks. Companies use web surveys to collect feedbacks
from the respective customer's. Through web surveys feedback from their customer's pop
on their websites when the customer's visit their websites and see to the needs of the
people. Modify the product if required and plan to introduce new product that is
demanded by the customer's(Stankevich, 2017). Surveys can be even filled by suppliers.
This method is used in B2B products.
 Online Questionnaire:–It is popular and effective as it reaches out to maximum
population. This is cost effective and time saving for the organization. L'Oreal use online
questionnaire to collect feedbacks as through this method the company gets the feedbacks
on time and less cost is incurred in the process. This method is used in B2C products.
Secondary Market Research- In secondary research the information is collected from the
existing research that has been already done. The existing data is easy to found and helps in
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raising the effectiveness of the research. In this research the companies use the already published
reports from the past that are related to the similar topics. These published reports can be found
online, magazines and public libraries.
 Commercial information sources:– Commercial information source is the common
medium to gather data which includes the newspapers, journals, radio, magazines etc.
This information medium includes the faithful data on economic developments, political
agenda, demographic segmentation market research and similar subjects(Anitha, 2016).
L'Oreal also used this medium to collect information about their companies product as
they can measure the popularity of their products in the market, and they can easily
upgrade their product according to the market trends and customer's demands. Thus, they
can also assume that what number of peoples are satisfied with their products as the more
popularity of product among the customer shows the high quantity of satisfaction
 Gathering Data from Internet:- It is one of the most popular method to collect
secondary data's. It is efficient as the data is free of cost, so the companies can invest that
amount in some other activities of business. L'oreal use this method to collect
information about the products. This method is used for B2C products. This is the
cheapest method used by the companies for collecting information. Companies gather
data from authentic websites, where consumer's suggestions are already mentioned so it
will company to solve the problems(Shaheen and Lodhi, 2016).
LO3
P 5 Factors that influence the decision-making process of B2C and B2B
Stage 1:Need Identification- Need for the product or service is recognized.
B2B- In B2B customers recognize their desires on rational level. The need to purchase
product or service relates to overall goal of the company that are increasing productivity so that
company achieve business objectives faster, provides better support, respond to consumer's
needs or it can be running the business smoothly. These are influenced by economic conditions
prevailing in the market i.e. fluctuation in money market & rate of interests can.
B2C- In B2C customers are often impulse, their purchasing needs are easily influenced
by marketing or advertising. They see any advertisement and get influenced by that, and as the
world is dynamic and so it their needs. They keep on changing with the current trend prevailing
in the market(Zuschke, 2019).
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Stage 2: Information Gathering- Required data is gathered by the customer's.
B2B- Before selecting a product B2B customer's go through a long process to buy a
product. In this process there are number of people included that assess that what a product or
service would do for company(profits & market share) and that will increase the wealth and
brand name of the company. The purchases have to pass particular criteria earlier of being
selected.
B2C- They are much more flexible. One person make the choice for oneself. The
audience sometimes neglects particular product specification in the order to get the product.
There will no logical reason but just the desire to own the product influence them. They collect
the information about the product from the websites or other social media applications.
Stage 3: Evaluation Alternatives
B2B buyers went through an extended process of evaluation and require other quotes to
compare. These customers likely to conduct research on possible suppliers & assess the
company's reputation. And choose the best amongst them that will possibly be beneficial for the
company(Zuschke, 2019).
B2C- The B2C audience are satisfied when the brand is reputed. It doesn't take too much
time to evaluate the alternative cosmetic product. They compare the products on various bases of
comparison that are available to them. They might be influence by online reviews, peer pressure
& personal recommendations.
Stage 4: Purchase (Buying Decision) The process how the audience reach to the buying
decisions is different.
B2B- The decisions came from long process, Involving number of people that evaluate
the product against different criteria & fighting the ego issues. It is common that it took few
months for the whole process. Then they came to the final buying decision.
B2C- These customers make the decision easy as at the first instant choose the product
and buy it. It easy for them as they already made decisions regarding their choices and the final
thing is buying the product(Anitha, 2016).
Stage 5: Post-Purchase
B2B- Sales agreement includes support & maintenance contracts and the state of support
is the major factor for deciding.
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B2C- For customer's after purchase services rarely matters. They only contact them in
case of any fault or support needed. But some customer's analysis the after sale services of the
companies.
CONCLUSION
From the above report it can be summarized that understanding consumer's buying
behaviour is important for the organizations. The marketers should know all the stages to rightly
get the information about the buying behaviour of the consumer. There is difference in skill set,
sample size, data collection methods and complexity of the process in B2B and B2C customer's.
There are primary and secondary sources from where the market research can gather data.
Primary can be online questionnaire which is used by L'Oreal for B2C and secondary can be
from internet.
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REFERENCES\
Fatima, S. and Lodhi, S., 2015. Impact of Advertisement on Buying Behaviours of the
Consumers: Study of Cosmetic Industry in Karachi City. International journal of management
sciences and business research.
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cosmetics & personal care products in Pakistan. Global Journal of Research in Business &
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Industry. Journal of Marketing Management and Consumer Behavior. 1(4).
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Korai, B., 2017. Determinants of African women's brand sensitivity toward cosmetics. Journal of
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Shimpi, S.S., 2016. Structural equation modeling for men's cosmetics behavior research. Indian
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Seth, A., 2016. The Influence of Packaging and Advertising On Children’s
Consumer Decision Making (Doctoral dissertation, Lille Catholic University).
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Shaheen, M. and Lodhi, R.N., 2016. Impacts of social media marketing on consumer decision
making process: Descriptive study of Pakistan. Journal of Business Strategies.10(1). p.57.
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Stankevich, A., 2017. Explaining the consumer decision-making process: Critical Literature
review. Journal of international business research and marketing. 2(6). pp.7-14.
Anitha, N., 2016. Influence of Lifestyle on Consumer Decision Making With Special Reference
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