CHAPTER ONE
BACKGROUND OF THE STUDY
1.1 INTRODUCTION:
Every day consumers buy things. Consumers exchange their money for goods and services, for their own use and for the use of their families: Consumers choose things they think will meet their needs on a day-to-day basis, and they occasionally make buying decisions which will affect their lives for years to come. At the same time, consumers make decisions about disposing of worn-out or used-up possessions. All these decisions and exchanges have implications for ourselves, our families, our friends, the environment, and the businesses we buy from, the employees of those businesses, and so on. And that is why Blackwell et al. (2001) asserts that consumer behaviour is the activities people undertake when obtaining, consuming and disposing of productsand services.
While lamenting the critical state of insurance marketing in Nigeria, Osoka (1992) highlights the prevalence of confusion among insurance marketers between selling and marketing. According to the author, while selling is concerned with creating demand for the products that have already been decided, marketing is directed towards identifying the needs and wants of consumers and planning to satisfy those needs. Hence, in this context, the necessity of understanding consumer behavior and how it shaped needs and wants of consumers in purchasing insurance products could be liken to the bone, the tendon, and the ligament of businesses without which no articulation can take place (Gbadamosi, 2000). Accordingly, insurance marketers need to understand the attitudes of customers and prospects to their offerings in order to be able to take informed marketing-related decisions.
According to Bennett (1995) consumer behavior is essentially a dynamic interaction of affect and cognition, behaviour, and environmental events by which human beings conduct the exchange aspects of their lives. Now, this position has the advantage that it regards consumer behaviour as dynamic, and emphasises the interaction of many different elements in determining consumer behaviour. This is the main reason why strategy for improving consumer purchase of insurance products needs constant review: a strategy that worked well in the past may not work nearly as well as in the present and future, because the forces that shape behaviour may have changed out of all recognition.
One of the present fundamental presumptions for the consumer behavior is the fact, that people often buy products not because of their main function but for their main subjectively perceived value. It does not mean that product’s basic functions is not important, but that’s the today’s role of products exceeds its service limits (Salomon 2004). Notwithstanding the fact that, individuals and groups determines the pattern of consumption, in trying to satisfy customers it involves in itself marketing, some creativity, offering and exchanging products or value that will appeal to the individuals and groups. Trommsdorff (2002) however opine that, there are no activities more important for the consumer behavior other than connected with consumption, Consumer behavior, attitudes enables better understanding and forecasting, not only of the subject of purchasing an insurance product but also of purchasing motives and purchasing frequency (Schiffman and Kanuk 2004).