Consumer Behaviour - Assignment Example

?Consumer Behavior 26th November CONSUMER BEHAVIOUR Introduction To understand this topic, we must know who a consumer is. The word consumer as used in marketing means, someone who regularly buys or purchases something from a particular store or company with an intention of using it. Thus, a person who gets into a place and buys something e.g. bread and then eats it is the consumer of the bread. A customer and a consumer are the same thing only that a customer might not use what he or she buys. A consumer is a customer but a customer must not be a consumer. The term consumer behavior is simply the behavior that consumers display in searching, purchasing, using, evaluating and disposing of services and products that they think will satisfy their wants and needs. Consumer behavior centers at how individuals make decisions to use or spend their available resources, that is, time effort or money on consumption linked items (Solomon, 2006). This simply means what they buy, where they buy it, when they purchase it, how often they utilize or use it, how they analyze it after they buy it and the impact of evaluating it in future and lastly, the way they dispose of it (Blackwell et el 2001). In other words, consumer behavior can be used to refer to the behavior of individuals in regard to acquisition, utilization, and disposal of products, ideas, services or experiences. Acquisition and use of information are also included in consumer behavior. This means that, communicating with consumers and getting feedbacks from them forms a crucial and important part to marketers (Peter and Olson, 2008). Importance of studying customers’ behavior Studying consumer behavior is very significant in our lives. It plays a very crucial role in our daily activities. Every body spends a lot of time in market places and other places shopping different items. There are also many things like decision making that cannot be ignored. Before doing any transaction, everybody must make a decision. This shows that, consumer behavior cannot be avoided in our lives. It also plays a crucial role in marketing. Understanding consumer behavior is important in successful delivery of firms’ offerings in market places. It is useful in Market Opportunity Analysis. This is analysis and evaluation of trends and conditions in market places to understand consumers’ needs that are not fully met. Here, it is useful in identifying the weaknesses and developing these weaknesses to meet consumers’ satisfaction. Consumer behavior is also used in Target Market Selection. This is identifying different groupings of consumers who have needs and wants that are unique and segment selection that matches the strengths of the firm. It analyses all this and then offer better chances and opportunities. Consumer behavior also involves Marketing Mix Destination. This is development and implementation of strategies for delivering effective combination of different features of satisfying wants to consumers within target market. Marketing mix is made up of four components, namely; place, promotion, price and product. Each and every person has his or her own way of perceiving or understanding things. Cognition and affect are one and same (Chisnall, 1995). Understanding of marketing strategy is also part of consumer behavior. Strategies used in marketing as well as the tactics are based on beliefs about consumer behavior. These beliefs can either be implicit or explicit. Not to forget, regulatory policy needs wide knowledge of consumer behavior. In addition, understanding of consumer behavior will also be incredibly useful in social marketing. Social marketing is use of marketing tactics and strategies to create or alter behaviors that have constructive effects on the target individuals and the society. It is used to increase sound environmental behaviors and to reduce vices like smoking. It is also used to improve support of charities and reduction of behaviors leading to HIV/AIDS. Evaluation of attitude According to Olson and Peter, analyzing consumers takes three objects, environment, behavior, affect, and cognition. Affect symbolizes people’s emotions about a brand or a product e.g. hating or admiring. Cognition represents mental activities such as evaluating, learning or evaluating (Adolphs, 2001). In order to understand the consumer behavior, we will take an example of Coca Cola, an International Company that manufacturers drink. A process of buying starts before acquisition of goods and services. It starts in the minds of the consumers which results to looking for alternatives between the products that can be bought after evaluating their benefits or shortcomings. In the minds of the consumers, there are questions which determine what to buy. The idea of what he or she thinks about the company’s products in comparison to those of the competitors will matter a lot. The consumer if influenced by the marketing strategies and activities as well as the efforts of the marketers. There are a number of factors that lead to formation of different altitudes to consumers. They include consumers’ perceptions, emotions and personality or intentions of buying. Social status, internal make up, values, cultures, and demographic factors can also influence the consumer (Eagly, 1993). Factors affecting consumer attitude Some factors influence our perception for something. Encountering a stimulus in the mind of a consumer can be brought about by exposure. A good example is the commercial information that consumers get on bill boards, stickers, banners and signs. This exposure is seen by chance, consumers don’t seek them. Marketers should be fully aware that a single stimulus cannot impact a consumer (Ajzen, 1988). Extensive repetition will draw consumers’ attention and this will cause a cumulative impact. In 1990s, on chosen evenings, it was recorded that, in a theater there was a frame with the words “drink Coca Cola now”. The word in a frame went so fast in that, people did not read well. On the nights that the frames were present, Coca Cola products were bought at a higher rate. This shows the impact of advertisement to consumers. Cultures and subcultures are other things that determine consumers’ attitude. They are influences imposed by other people to the consumers. These are morals, customs, beliefs, knowledge and other habits and capabilities acquired by humans as members of society. It would sound unrealistic to constantly advertise an alcoholic drink in a place occupied by Christians. The behavior of a customer towards a product should be clearly understood when marketing a product. The lifestyle of a person is another key thing that affects consumers’ behavior. The way a consumer spends money and time are attributes that makes human lifestyle. If a person changes his or her job, he or she is likely to change the purchasing power as well (Armstrong and Kotler, 2007). A persons personality also affects the consumers’ behavior in that, a person who is social is likely to take more Coca Cola drinks that a less talkative person. In marketers’ point of view, it is important to understand the perception of the product by the consumer in comparison to those of the competitors. Use of multi dimensional scaling can be used to understand the perception of the consumers towards a product. This method involves plotting of brands against each other. There are two approaches used here. Priori Approach involves asking consumers about their perception on all dimensions for the brands. This is very crucial to the market researcher because he or she will know the dimensions of interest and the customers’ perception on every dimension. The other approach is Similarity Rating. Here, the respondents are do not give the perceptions of the product on any dimension. Instead, the market researcher uses subjects to rate the level of similarity of different products. A computer is used to identify the positions of every make on a plan of dimensions with the help of algorithms. The humans are then left to reveal what each perception means. This method is very effective in areas where no dimensions of the product have been identified or when it is not clear the category of the products. Marketing strategies Three approaches are used in marketing of products. Undifferentiated strategy approach, the company makes no effort to satisfy a specific group. All consumers are treated the same. This is very effective where a product cannot be modified further over that of the competitor. Another approach is the Concentrated Strategy Approach. Here, a firm decides to focus on segment leaving other segments to competitors. Taking an example of Coca Cola, it has decided to focus on non- alcoholic drinks leaving alcoholic drinks to competitors. There are many other companies that manufacturers both alcoholic and non- alcoholic drinks but Coca Cola concentrates on one. Their products quench thirst and refresh the consumers. The other approach is Differentiated Strategy. This approach involves handling of consumers differently. Consumers that are not price sensitive are handled first. When they are over, the other consumers are accommodated in the same venues with slightly low payments. This method is very common in transport sector e.g. in airline, trains, and long distance buses. It should therefore be noted by the marketers that segmentation calls for hard choices (Edward, 1963). Repositioning is another aspect of marketing that is used in analyzing consumers’ behavior. It involves changing consumer’s perception of brand or product. This can be done when the existing brand becomes less attractive. It is incredibly difficult to attain because it calls for excessive use of money especially in advertisement. Positioning, segmentation and targeting are other terms that need to be understood so as to get clear meaning and importance of customer behavior to marketers. Three stages are involved in segmentation and positioning. Determinations of what type of customers exist, selection of the best customers to serve and implementing the segmentation by optimizing the products and services. After wards, communication is done to say what choice is made. Segmentation will help to know different kinds of consumers and their needs in the market. In Coca Cola Company, some customers demand quenching their thirst while others demand refreshment. This simply means that “you can never be all things to everybody”. Research and experience has shown that, the companies that meets the needs of a single group of consumers have a propensity of making better profit. In order to effect changes over time in the market, many companies conduct surveys. This helps to increase the number of customers in the market. They need to know how their product is perceived by the consumers. Many companies have failed due to lack of interest in the attitude of the society and other new companies have developed due to stylish attitude researches. Although attitude is not a forerunner to give information about the future of a certain company, it can be used to show good signs of what is likely to happen. Consumers’ motivation The main aim of the marketers is to satisfy the consumers’ wants and needs so as to sell their products. When consumers’ have a need, they seek answers to reduce or sift it (Solomon, 2006). There is an intensive connection of people’s motivation and needs. A behavior is started up by a motivation which leads to an action. A person who is motivated is likely to act more seriously and faster than the one who is not motivated. The figure below shows an action process Source: Chisnall, 1995. Pp 40 Through an analysis done by psychologist, motivation can be influenced in many ways. A psychologist by the name, Abraham Maslow developed a theory used to classify needs of consumers as higher or lower wishes. According to him, the psychological needs such as hunger and sexual satisfaction are mostly valued by people. The figure below shows Maslow’s Theory of motivation. Source: Chisnall, 1995 Consumers are influenced by desired properties, advantages, and possible risks. This results to an attribute towards a product. Buying traits are linked to needs and values of individuals. While some features are connected to individual values and beliefs, others are not. Decision process of a consumer The process of decision making by a consumer starts from recognition of need and ends at divestment process. This step of decision making helps the marketers to understand the buyer and influence him to change his or her decision. There are various steps that a consumer follows after and before buying a product (Blackwell et al, 2001). Need recognition This step represents the consumers want or need towards a commodity from a given company. The needs range from personal needs e.g. physical needs to the environment needs. The environmental needs are the needs that result from the place or the surrounding a person lives in (Armstrong and Kotler, 2007). The needs of the consumers should be identified by the marketers and the manufacturers. This ensures that, the consumers’ wants and needs are satisfied. Some companies make a mistake of introducing a product in the market without an understanding of the potential customers. This results to poor sale and is very dangerous because it can lead to collapsing of the company (Blackwell et al, 2001). Information search This is the stage that follows after need recognition. It involves looking for information in different areas, internal and external areas. Information can be in somebody’s mind or he can be near the object targeted. When such a case arises, the consumer gets the product easily without looking for it for long. However, some consumers feel shopping as the best because they get time to explore and inquire more on the products. In many instances, searching for something takes the shortest time. The action of the consumer depends on the extent of remembering. This is recalling the price of the product or the name. A consumer may decide to go back to the commodities they normally use according to the level of satisfaction. Pre- purchase evaluation of an alternative Here, the consumer spends much of the time. It is a stage that involves choice from a set of selected alternatives. Some companies like Coca Cola have a range of different products satisfying the same need of the consumer (Solomon, 2006). A consumer will have to ask him or herself a lot of questions about a product and still do a comparison of the same product from other companies. He will make alternatives and choose the best product that suits the need. In addition, consumers will have to select the shopping malls that give offers or are cheap. The size of the product, prize and the quantity are the things that the consumers are sensitive at. If they realize any change in one of this, they will evaluate themselves whether to buy the product or not. In order to understand the customers’ behavior, marketers should do a thorough survey on how the consumers weigh alternatives in the market (Armstrong and Kotler, 2007). Purchase After a long evaluation, a consumer finally makes a decision of buying the product. This step does not necessarily end with the product of choice. This can be brought by persuasion from other people around the consumer or even change in price of the commodity. The salesmen in the mall can strongly convince the shopper that the other product apart from the one selected is better. Consumption After buying the product, the buyer uses it for the intended purpose. Marketer should know how the consumers use the product in order to satisfy their want. If we take an example of Coca Cola Company, they can decide to manufacture a drink that can be preserved for long if the consumers need drinks for travelling for long distances. If the consumers live in coastal areas where the temperatures are high, the company can decide to manufacture cold drinks. Post- consumption evaluation This is another very crucial stage of consumers’ decision. The consumers’ satisfaction may increase or decrease depending on the expectation. Dissatisfaction is likely to be brought by the marketers’ exaggeration on the product. It changes the attitude of the consumer towards the product. For example, it is not good to tell a consumer that a new warm brand of Coca Cola drink will quench his thirst. If it doesn’t, there are higher chances that the consumer will never buy the product again. There can be Brand loyalty, where the consumer purchases the same product over and over again due to full satisfaction. Divestment This is the end stage of consumers’ decision making process. The consumer decides what to do with the product after use. Depending on the satisfaction, the consumer may dispose or market the used product (Blackwell et al). The main aim of the marketers is to satisfy the consumers’ wants and needs so as to sell their products and this means that, all this steps will be very effective and beneficial to marketers in understanding what the consumer requires. References Adolphs, R., and Damasio, A (2001). The interaction of the effect and cognition. Hand book of affect and social cognition. NJ: Erlbaum Pub. Ajzen, I (1988). Attitude, personality and behavior. Homewood: Dorsey Press. Armstrong , G, Kotler, P.(2007).Marketing: an introduction, New Jersey: Pearson Prentice Hall. Blackwell, R., Miniard, W. & Engel, J. (2001). Consumer Behavior, 9th Edition. Harcourt: College Publisher, USA. Chisnall, P. (1999). Consumer Behavior . 3rd Edition. England: McGraw-Hill Book Company. Eagly A. and Chaiken, S. (1993). The psychology of attitudes. San Diego, CA: Harcourt Brace. Edward, J. and Willium, J. (1963). Fundamentals of marketing: New York: Hill Inc. Peter, J. and Olson, J. (2008). Consumer Behavior and Marketing Strategies, 8th Edition, New York : McGraw-Hill Company Inc. Solomon M. (2006). Consumer behavior: buying, having and being. 7thEdition. New Jersey : Pearson Prentice Hall. Solomon, M., Bamossy, G., Askegaard S. (2002). Consumer behavior a European Perspective. 2rd Edition. New Jersey: Pearson Prentice Hall. Read More