Consumer Decision-Making - Essay Example

Consumer decision Introduction Consumer decision making is a complex process and it maybe rational or irrational depending upon the situation, context and individual view of the purchase. Jansson-Boyd (2009, p. 138) mentioned that researches shows that “it is not as simple as saying that consumers are or are not rational.” There are many factors which contribute to decision making process, for example, consumers’ past experience with a product may lead them make rational choices in future. According to Joseph and Mohapatra (2008, p. 169) “A rational decision is the one which, effectively and efficiently, ensure the achievement of the goal for which the decision is made”. In order to determine whether consumers make rational decision or not we have to see the underlying motives/goals influencing consumer to take a certain decision. We, ourselves are the consumers and we can see that there are times when we feel happy after purchasing an item which is not even needed, however, there are also the times when we repent after purchasing a commodity. Though need exist but we do not feel as happy as we should have after fulfilling that need. This essay will explore consumer decision making for its rationality and will conclude in favor of the point having more supporting arguments. Consumer Decision Making Process In its simplest form consumer decision making process can be presented by Engel-Kollat-Blackwell model (Jack 2005, p. 129). This model suggests that consumer buy products/services to satisfy their needs and wants. These needs and wants are actually the problems and once recognized consumer feels motivated to satisfy them. According to the model, these needs and wants can be stimulated by internal (actual need e.g. thirst, hunger etc) as well as external factors (advertisements, reinforcement by others). To satisfy them the consumer search for information and during the search process various alternatives are evaluated. Finally the consumer selects any one of the alternatives which he/she finds the most suitable for purchase. Then the model also talks about post purchase behavior which include responses such as satisfaction, repurchase willingness etc. Now this post purchase behavior will decide whether the decision made is rational or irrational depending upon the achievement of underlying goals. This whole consumer decision making process is not as simple as it seems to be. According to Kotler’s Marketing Essentials as cited in Lee (2007, p. 31) there are many factors influencing buyer behavior. These factors not only stimulate the need but play their role in every stage of consumer decision making process. Whether it is search for information, alternatives evaluation or actual purchase, these internal and external factors are active throughout the process. Internal factors as per Kotler are personal as well as psychological factors which includes everything from the consumer’s age, occupation, lifestyle, economic conditions to motivation and attitudes. External factors include cultural and social factors which describe everything from social class and subculture to family influences and peer pressure. Though consumer decision making process is a complex process which is influenced by several factors, however these factors hold different meanings for different people. We can add as many factors as we want within this premise because a factor may be important for one consumer whereas negligible for the other. For example, for one consumer novelty is one factor that beats all but for the other price is the most important. Hence consumer decision making and its rationality varies from consumer to consumer. Then there are some factors as well which affects the whole process like technology, quality of the product, alternatives availability (choices) etc. Different factors contribute to the rationality of a decision differently. Now if we assume that consumer takes into account all the factors discussed above while making a purchase decision, there is nothing more rational than this decision. However, the opposite is true. Following is the argument. Evaluation As discussed above, there are various factors which influence the decision making abilities of a consumer. These factors, as said earlier, are all underlying and playing their role without the consumer being aware of them. For example, while selecting a dress, consumer’s culture will definitely play a role, however there are several other strong factors which constantly force the consumers to act differently, and this is the reason why we sometimes go for products/services we find unfit to our circumstances. These later factors are both internal and external and are strong enough to make consumer act in favor of marketers and make decisions which are unintended and sometimes irrational. Even if the consumers desire to stay rational and focused, they can’t, because of the following reasons: Advertisements’ Glamour: Advertising is the smartest marketing tool which the marketers use effectively. It has become a common practice for marketers to promote the products under a thick coating of glamour. Showbiz celebrities are seen endorsing perfumes, shampoos, soaps and makeup. Women buy the products endorsed by their favorite celebrity whether it suits their skin and scalp or not. Similarly sportsmen are hired for the publicity and sales of products related to men. Now these marketers hits the consumers’ emotionally diverting their attention from their needs to what the marketer is selling/promoting. In an effort to look or behave like their beloved celebrities consumers purchase the products/services which they do not really need. This is how advertisements’ charm force consumers to make irrational choices. The choice would be termed as irrational because there is no goal achievement at the end of the process (as discussed in the definition given in the introduction); however there is a satisfaction which induces re-purchase. One can say that being satisfied at the end of the process is an achievement in itself; however, it is not, because the satisfaction is not due to the fulfillment of a need identified for the purchase. The product is not actually needed but is imposed by the marketer as important. So this is need creation by the marketer and not the need recognition by the consumer. Many marketers would comment that the need exists but was hidden however in actual sense, when the rationality has to be accounted for, the purchase in economic terms is not rational. Extreme Competition: Due to increased competition, each marketer tries to best portray their product/service. Marketers know how to manipulate consumers and force them act in their favor. They know the general perception about rational decisions; generally, a decision regarding the purchase of an item is considered rational if the product bought is of superior quality, is reliable and has a low price tag. Hence they portray their product as having highest quality and lowest price thus making consumers rest assure they made the right and rational choice. Of course, this is important to gain and retain market share. Battle between Quality and Price: It is a common fact that consumers are always into making comparisons between price and quality. Price conscious consumers prefer paying low prices and want high quality products/services, whereas quality conscious consumers are focused to get the best at whatever price tag. According to Sirgy (2001, p. 201) another fact which supports the statement that consumers do not make rational choices is that most of the time the consumer fails to identify the best price deals various manufacturers offer. One mistake the consumers frequently make is to ignore the hidden costs. Most of the times, the price conscious consumers leave the high quality product due to a negligible price difference, whereas quality conscious consumers pay way too high to get a similar quality product which they could have purchased for a lower price. These irrational behaviors exhibited by the consumers are because of individual price and quality perceptions as well as the efforts of the marketer which plays a drastic role in modifying consumer choices. Internal Desires and Emotions: Emotions also affect the decision making abilities of the consumers and misguides them into making wrong purchases. People end up buying things because those things either make them happy or calm them down; besides this those items have no real value. As stated by Feig (2006, p. 4) consumers do not purchase services or goods, they buy the satisfaction of unfulfilled needs. This satisfaction is not rationally justified because the unfulfilled need is the one created by the marketers and doesn’t actually exist (vary from case to case). Consumers are attracted to products which affect their feelings and the marketers make use of this ability to motivate the people into buying their products. This motivation is taken even further and often consumers get carried away with the physical appearance of things or often the consumers end up buying things because they are driven by the desire to own something unique or look different. All these emotions contribute significantly towards consumers’ irrational choices. Availability of Alternatives and Heap of Choices: The innumerable choices offered has made shopping somewhat daunting task for average minded people and prevents them from making wise decisions. The zillions of options consumers now have causes confusion and in this confusion consumers fail to assess and evaluate the usefulness of the items. A perfectly sane minded person turns into a confused mass when it comes to making the right decision while purchasing things. Advanced Technology: In today’s world where advanced technology has taken the driving seat, it has become very confusing for consumers to make rational decisions. On one hand, where advanced technology has made things easier, for example, item search and price comparison is just a click away, it has also made it difficult to assess the products quality. Advertisements often change the actual product into something extra ordinary with the use of high tech tools which mesmerizes consumer minds and force them to make decision in favor of the product. The Word “Sale”: “Limited edition” and “one of its kinds” are also some magic phrases used by the marketers to allure people to buy things and later ponder about the rationality of their purchase. “Sale” is one word which makes people throng stores. It is usually seen that people buy items in bulk when they are put up for sale in order to save money. However most of the time it is the other way round as consumers end up spending more money then they intended to over useless things. Impulse Buying: It has been observed that often people buy things on impulse rather than using logic. When purchasing things, they often overlook some important features like quality and reliability and often fail to compare and contrast the quality of products. Weber, Baron and Loomes (2001, p. 112) defined impulse buying as “a spur-of-the-moment decision in a shop” and it is in contrast with planned purchasing. Harris (1980, p. 92) in the article ‘controlling the urge to splurge’ holds that impulse buying can be an expensive habit. Hence this behavior of consumer also contributes to his/her irrational decisions. Conclusion and Recommendations Not always, but most of the times consumers make irrational choices on which they repent later on. According to Lee (2000, p. 247), psychologists hold that “whatever decision we make, however purely rational it may seem, is deeply influenced by emotional forces, conscious, subconscious or unconscious.” There are many instances where consumers make irrational decisions; a few of them are discussed above. Whatever the reason customer may identify later on, after making an irrational choice, it will always add to their experience which prevents them from making such decisions in future. However, there are so many such reasons and learning them all by experimenting could be expensive. Therefore, one must be savvy enough to learn from others experiences. There are so many studies, researches and surveys published each year about the marketing tactics used by marketers to influence consumers’ decision making. One can always have a look at them to learn something of their own benefit. An interesting study, shared by Karp G (2009) in his article, was carried out to assess the consumers. The researchers found that a majority of the consumers were of the opinion “the bigger the better” and that is why they chose products with more specs. The digits on the right hand side also hoodwink many people into buying them. For example, a survey showed that two somewhat similar items were offered for sale one was priced at $3.99 and the other at $2. A large number of people bought the product priced at $3.99; the consumers only noticed the .99, what they did not notice was the digit before the decimal which actually made the difference. From the above discussion this essay concludes that consumers normally make irrational decisions which are influenced more by their emotions than reasoning and logic. From the above discussion one can draw following few points which can help consumers make rational decisions: Planned Purchasing: Make a list of items you need before going to the market. Know your goals of shopping. It’s good to have a set price range of items in mind before you search shops. Never buy from the first shop you stop at; it is good to see three to four shops/stores before buying an unbranded item. Avoid unnecessary window shopping as this may arouse you to buy impulsively. Know the Limits when Buying on Sale: It’s good to buy items on sale to save a few bucks but it is irrational to do so at the expense of disturbing your current budget. Know how much you need and afford and don’t get overwhelmed with the word “sale”. Know your Weak Points: Solomon and Rabolt (2006, p. 461) quoted the results of a survey which shows that “70% of cosmetic purchases are unplanned”. Therefore, know the item that you can’t resist. Knowing your weak point and staying away from it is very important while in the store. Evaluate Alternatives Prudently: Alternatives are there to make you decide in favor of the one best suited to your own situation, context and circumstances. Don’t get confused with so many alternatives and options available out there. Evaluate them prudently and buy the one which is best suitable for you. Make quality and price comparisons carefully. Use Technology to your Advantage: Don’t let variety of options confuse you; also don’t let marketers manipulate you with high tech advertising tools. Knowing your needs and how marketers manipulate them will save you time and money. Use technology to your advantage. Avoid Basing your Decisions solely on Ads: Of course, marketers advertise for consumers but it is irrational to buy things just because your favorite celebrity is using that product/service. If you need that thing, its ok, you can go for it but if you don’t need a certain product/service there is nothing binding on you to buy it. Keep in view above discussion the next time you go shopping. Don’t make shopping an expensive experience for you. You can always make it fun and affordable by knowing your needs and the right selection to satisfy them. Never get carried away with emotions or ad glamour; this is how making rational choices can become possible. 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Solomon MR & Rabolt NJ 2006, Consumer Behavior: In Fashion, India: Pearson Education India. Weber EU, Baron J & Loomes G 2001, Conflict and tradeoffs in decision making, UK: Cambridge University Press. Read More