Dynamic Purchase Decisions under Regret - Literature review Example

Consumer Decision-Making: Internal Factors Name Institution According to a survey conducted in the year 2012, business organizations have increased their attention on factors that influence consumers’ decision-making. The increased use of technology and the dynamic nature of the business environment in today’s world have made management of consumers a complex process. Consumers use the technology to learn about qualities, features and the costs of various products in the market. However, the consumers’ decisions appear to go beyond the cost and the quality of the products available in the market. This trend has seen a considerable number of researchers focus their attention on this area to determine the precise factors that influence the decision making among the customers. Consumers’ buying decision-making is influenced by numerous factors that are either intrinsic or extrinsic. Barber & Dodd (2009) write that the extrinsic factors that influence consumers’ decision-making are referred to as external factors. Some of the factors include cultural factors, political factors, and social factors among others. On the other hand, intrinsic factors that influence customers purchasing decision-making are referred to as internal factors. This paper will discuss the internal factors that affect the smartphone consumers’ decision-making process. In particular, the paper will examine five internal factors namely, needs and motivation, consumer perception, consumer learning and involvement, consumer attitude development and change and self-concept. The demand of smartphones has increased exponentially in the recent past. Countless thousands of consumers are buying smartphones every year month. This increase in the demand of the smartphones can be attributed to the unique features associated with the product. Unlike the other phones, smartphones are integrated with Internet applications that enable customers to access internet services such as emails, social media, and browsing. However, the consumers’ decision-making process is hugely influenced by intrinsic or internal factors. Ajzen and Fishbein (2014) write that the most substantial internal factor that influence consumers purchase decision-making is their personal needs and motivations to satisfy the needs. A personal need is the gap that exists between what a person has and what they desire. It refers to what someone lacks to meet their desires. Ajzen and Fishbein (2014) classify human needs into two groups, which include utilitarian and experimental needs. Utilitarian needs include the needs where the customers have the consideration of objectives such as benefits, colors and other esthetic considerations. Experimental needs elicit the customers’ esthetic considerations and experimental needs. On the other hand, motivation is the inner urge or encouragement to do something in order to meet a specific need. It refers to the force that drives consumers to buy or not to buy a product to meet a certain needs. For instance, the need of a hungry person is food, and this hunger would motivate the person to find a hotel where they can meet their need. Numerous theories have put forward to explain the effect of motivation on consumer behaviors. In order to understand the influence of the motivation on smartphone consumers, it will be fair to describe some of the motivation theories. In particular, the paper will describe the Freud’s theory and Maslow’s theory The motivation theory by Freud contends that consumers’ action and thoughts are shaped by the psychological forces unconsciously. The theory argues that, although the consumers do not have a full understanding of their motivation, their conscious reacts not only to the quality of products made but also to color, size, material and the brand names of the product. Therefore, consumers buying decision-making is influenced by the esthetic factors although the motivation is not be consciously done by the buyer (Warren, 2009). The Maslow’s theory of motivation is a rather comprehensive theory that has been studies by several analysts. The theory classifies human needs into a hierarchy of five sections. The bottom most section is the psychological needs that include water, shelter and food. The second is safety needs. This includes security, freedom and stability. The third include social needs such as a sense of belonging and love. The last two include esteem needs and self-actualization needs respectively. Consumers are motivated to meet these needs depending on their hierarchy. Needs low in the hierarchy are meet first before the needs at the top of the hierarchy. These needs and motivation concepts have been at the center of smartphone consumer decision-making. According to a survey conducted in the year 2014, smartphones have become a basic need in consumers’ lives. The increased need to communicate with different people such as employees, friends and relatives had made the smartphone a basic need. Social media has become a way of living where different companies and individual interact on a daily basis. Most of the initial phones do not provide these services hence making the smartphone as the only alternative. Therefore, the desire to communicate with other people makes the smartphone a personal need. Therefore, the personal need for the smartphone is one of the major internal factors affect consumers decision-making. According to a study conducted in 2013, ninety-four percent of youth indicates that they consider smartphone as a basic commodity. Most of them placed the need for a smartphone in the same level as food and shelter. The youths use smartphones to connect with friends, look for jobs and share opinions. Students in colleges and universities rely entirely on social media. In organizations, employees use the smartphone phone to receive communication sent from the managements. The survey concluded that the smartphone has become a basic need in today’s technological world. Apparently, the need to have a smartphone is placed down in the Maslow’s hierarchy of needs. Although the need of the smartphone cannot be a basic need, the position of the needs come before the second rank of the hierarchical. Apparently, there is a high need to satisfy this need before most of the other human needs such as love and sense of belonging needs. Therefore, according to the theory, there is a high motivation among the customers to buy and own customers in order to satisfy this need. Smartphone customers’ decision to, but the phones are influenced partially by the motivation to meet the basic needs (Warren, 2009). Perceptions play a significant role in influencing consumer decision making among the smartphone consumers. Perceptions refer to the process in which a person selects, organizes and interprets information that they get in order to make the appropriate decision. The process involves the collection of information through the five senses namely smell, taste, sound, sight, and texture. Hannula and Vaisanen (2009) contend that consumers perceptions are a major internal factor that affect the consumer’s decision-making process. Consumers’ perception is a result of personal experience, characteristics, and beliefs. Consequently, consumers’ perception is distinct from one person to another. Human perceptions influence smartphone consumers buying decision making in three aspects namely selection attention, selection distortion and retention. Selective attention is human stimuli that capture only few details that are sensitive to the smartphone consumers. There are millions of adverts in today’s environment, and they continue to increase every day. People cannot memorize and remember all this adverts. Instead, they recognize the adverts that are sensitive to their mind. Therefore, selective attention is the perception that comes with the ability of the consumers to identify certain products or brands. The ability of the customers to select a certain smartphone brand among the many has an influence on the smartphone consumers as they tend to buy what they can remember among the numerous phones available in the market. Allport, (2010) states that selective distortion is the perception has make and individual make a decision that are in consistent with their personal values and beliefs. Selective distortion result to misunderstanding of information as consumers tries to understand the nature of the products. Azad and Safaei (2012) write that smartphone marketers need to ask constantly their customers about their brand perceptions so that they can have the precise pictures of the what most consumers views their product. They add that strong brands benefit from the selective perception, and brand image has a major role in how consumers perceive and judge a product. Therefore, selective distortion is a factor that influence customers purchase decision making among the smartphone consumers. The last aspect of perception that has an influence in smartphone consumers’ decision-making is selective retention. The increased number of adverts in the recent past makes it impossible for the consumers to remember the every advert they encounter. Analysts argue that customers will tend to remember the products and brand that agree with their perceptions and beliefs. In order to enhance retentions, marketers are using repetition in order to enhance selective retention. Consumer decision-making is influenced by the ability of the consumers to remember a certain brand. The analyst argues that consumers will purchase the brands they remember most. The influence of perception in the decision making among the smartphone consumers is self-evident. There are countless phone models in the market and consumers cannot remember all these models. The choice to buy a certain brand of smartphone depends hugely on the ability of consumers to identify a certain phone model among the numerous models in the market. There are wide varieties of smartphones that come with different colors, texture size and other esthetic features. These varieties enable consumers to purchase the smartphone model that meet their perceptions. For instance, there are small and big phone, white and black phone, thin and think phones. Consumers’ decision to buy either of the phones depends on their personal perception. People tend to buy the smart or brand that fit in their perceptions. Selective retention is also influencing consumers’ decision making in the smartphone market. Most of the consumers remember the strong smartphone model and are less concerned about the other models in the market. For instance, despite the large cost of IPhone 5, Sony, HTC and Samsung Galaxy 4 and 5, consumers continue to buy these phones. There are other products that have the same quality as these smartphone models, but consumers have low selective retention about them. Consequently, these models are not remembered by the customers when making a decision regarding the kind of phone to buy. On the contrary, strong brand such as Samsung and Apple brands have high selective retention among the smartphone consumers hence influencing the consumers decision-making process. Consumers are a human being with distinct and complex personalities. People have distinct personalities that influence the choices they make in their day to day activities. The term personality is used to described individuals human behaviors and traits that define an individual from the rest. The traits such as adaptability, autonomy, defensiveness, dominance aggressiveness are commonly used to define a person. Personality is a result of hereditary characteristics, and personal experiences hence are different from individual to another. Most people use such term as ambition, dogmatism, introversion and competitiveness to describe character traits of an individual. Comegys and Vaisanen (2009) argue that customers have a high preference for the products that come with their personality. This is attributed to the fact that consumers buy a product to express their identity. For instance, the rich people will buy expensive brands in order to express their wealth. Therefore, brands are seen to communicate the personality of the person using the brand. This relationship gives birth to brand personality where a certain brand is used to present some human character traits. Ajzen and Fishbein (2011) indicate that there are five dimensions about brand personality namely sophistication, ruggedness, excitement, existence, and competence. Individual personality is closely related to self-concept. Self-concept is the image that people have about themselves. Allport (2010) asserts that self-concept is the total sum of the feeling and thoughts of an individual. Self-concept stems from the interaction of the social and psychological dimensions. Like personality, consumers tend to prefer products that reinforce their self-concepts. Allport (2010) writes that customers tend to select the products that do not only reflect their images but also enhances their self-concept. He adds that self-concept has an influence on consumers’ decision-making process. It influences the choice of products and brand among the consumers. Diecidue (2012) indicates that self-concept has three aspects that influence smartphone consumers’ decision-making. They include self-esteem, self-image, and ideal self. Self-image is the way an individual view themselves while the self-esteem is the value that an individual give. Ideally self-image is what one wish to be. Consumers keep in mind these aspects when making the decision of which brand to buy and which one not to buy. Barber and Dodd (2009) argue that consumers will purchase the smartphone models and brands that have symbolic images that complementary their self-images as a way of achieving image congruence. For instance, the purchase of expensive products is often based on individual self-concept. The influence of the personality and self-concept is arguably one of the major factors affecting smartphone consumer decision-making. Smartphones manufacturers produce a wide variety of smartphones. A large number of these phones are expensive compared to another type of phones. However, researchers have found out that the higher the price of the smart phone, the higher the demand. Diecidue (2012) indicates that the most expensive smartphones such as Samsung Galaxy S3 and S4, Sony Xperia Z and Nokia Lumia 920 are the most popular and high demand product in the market despite the fact that these are the most expensive smartphone in the market. In general, the demand of the smartphone increases with increase prices and popularity of the brand. This trend can be best explained in term of the personality and self-concept. First, smartphone are regarded as quality products due to features that come with the phones. They are equipped with applications that enhance internet access. The phone enables people to connect with other through emails and other social media. These features have made the smartphone a strong product that everyone will want to be associated. It is a representation of the digital era. People all over the world are increasingly embracing the digital technology in their life. Therefore, the smartphone are seen to present the modernized personality. Second, it is apparent that the most expensive smartphone have more demand that the less expensive market. This can be attributed to the fact that these phones represent the rich personality and self-concepts. A large number of the people want to portray an image of being wealthy individuals. They view themselves as either valuable or they want to be valuable. Therefore, the high expensive smartphones do not only reflect the personality of the consumers but also enhance their self-concept. Brands such as Samsung Galaxy and IPhone 5 are seen to enhance the users self-concepts due to the value that people gave attached to them. Smartphone consumers are becoming increasing dependent on the information in the decision making process. In addition, the level of the involvement is becoming a major internal factor influencing consumers’ decision-making process. Some consumers are quick to make a decision about the phone to buy depending on the experience and information they have about the models in the market. Others take the time to gather information and would prefer to be involved in a discussion about their decisions they are about to make. Regardless of the case, smartphone consumers decision-making is high influenced by the involvement and learning Diecidue (2012) writes consumers learning is playing a central role in smartphone consumers’ decision-making. Consumer learning is the process in which an individual acquire consumption and purchase the knowledge to help them make buying decision. Consumers need to have some consumption and purchase information so that they can precisely know where to buy the product and the price of the product. In the smartphone market, consumers need to know about the features that come with every model of the smartphone. Consequently, the consumers can base their decision-making process on the knowledge their have about the product. Consumer learning has four elements namely cues, response, motivation, and reinforcement. Motivation is the first element where customers are motivated to find out about products that can satisfy their want. Therefore, the need to learn is motivated by an individual needs. Smartphone consumers are keen to learn about the phones in the market that can meet their needs. The cue is the second element, and it gives the direction to the consumers’ motivation. The response is the reaction of the consumers towards the clues. Lastly, reinforcement is the behavior of the consumers after learning about the product. The advanced technology in today’s innovative world has played a major role in enhancing consumers learning. Consumers learn about different products through online means such as webpages and social media. Social media provide a platform where customers exchange their ideas, experience and opinions regarding different products. Consumers complain to their companies in case of a negative experience while business companies are using the platform to enhance learning among the consumers. In addition, consumers have the chance of making an inquiry about any product they want to buy. This information has hugely influence consumers behaviors. Consumer learning has, therefore, become a major factor influencing smartphone consumers’decision-making process. Consumers’ involvement refers to the time that a consumer takes to considering about their decisions. There are two types of consumers’ involvement namely low involvement and high involvement. Diecidue (2012), states that low consumer involvement is applied by the consumers when the products to be considered are not expensive. As a result, it occurs automatically, and the consumers are just engage in the routine response behavior. Since the involvement does not need planning, some analysts have referred to it as impulse buying. On the other hand, high-involvement consumers’ decisions are the case where consumers take a little longer period to consider the decisions of buying or not buying. In this case, consumers do not engage in routine behavior but consider the implication of their decisions using the information they have gathered through consumer learning. The initial problem where consumers could buy a product without sufficient information appears to have been overtaken by time. Smartphone consumers are exposed to a large amount of information about the variety of the smartphones in the market and their operation features on day to day basis.Smartphone marketers are constantly releasing information about existing and new smartphone models information to enhance consumers’ decisions making. The information includes the location to buy the products, the prices and the features that come with the smartphone models. Consumers have an opportunity to compare and contrast various smartphones in the market. According to a survey conducted in 2014, smartphone manufacturers that are constantly updating their information and avail the information to consumers have higher consumers than the manufactures that avail limited information about their products. For instance, Samsung has been in the forefront in the dissipation of information about their products. This information enhancing consumer learning and hence has a huge influence in the decision-making among the smartphone consumers. In addition to learning, smartphone consumers buying decision is influenced by the consumers’ involvement. Most of the smartphone models are relatively expenses while the popular brands such as Samsung Galaxy and IPhone are significantly expenses products. Therefore, consumers do not engage in a rational behavior when buying the product as these products require high consumers’ involvement. Consumers take the time to consider the decision of buying the smartphone, considering a wide range of implication that they have gathered through consumer learning. Apparently, the decisions to buy which type of smartphone are highly influenced by the consumers’ involvement. Azad and Safaei (2012) indicate that attitude is a major internal factor influencing the consumers’ behaviors. Consumer attitudes are the feelings developed upon assessment of a product that made consumers act in a certain way towards that object. Harradine and Ross (2013) write that attitudes influence consumers to develop behaviors against a certain type of similar products. Attitude influence how people think and hence how they behave and marketer are working to ensure that they create a positive attitude for their product. Therefore, consumers’ attitudes have an influence in the consumers’ decision to or not to purchase a certain product. Consumers’ attitudes are based on the environmental conditions in which they grow up and their experience about a product. While some consumers express a strong attitude towards a product, other have a low attitude towards some products. The intensity of the attitude among the consumers depends on the strength of conviction in which the consumers believe in the attitude. Drake and Wicherski (2014) argue that consumer’s attitude serves numerous functions such as knowledge function, ego-defense function, value expressive function and utilitarian function among other functions. He adds that marketers should be cognizant of this internal factor for them so succeed in the marketing activities. Arthur (2014) writes that consumers’ attitudes can either be negative or positive toward marketing of a product. Marketers are taught to consider the attitude of the consumers and provide the information to the manufacturing department so that they can meet the exact attitude to the consumers. In addition, he indicates the consumers’ attitude can be used to predict future sales of the product. This argument indicates that consumer’s attitude plays a central role in consumers’ decision to buy or not to buy a product. Daniel Katz developed the function theory of attitudes to provide an explanation of how attitude motivate consumers to purchase a product. According to the theory, the utilitarian function of the attitude refers to the manner in which an individual make a decision based on the ethical theory of utilitarian. Consumers will make their purchase decision based on the happiness that will result from their decision. The ego-defensive function is decision makes when they feel the purchase of a product will comprise their self-image. Knowledge function captures the consumers who base their attitudes on the organized structure. The motives make consumers behavior in a certain manner and hence influencing consumers’ decision-making process. Consumers’ attitudes are a major factor influencing decision making among the smartphone consumers. Smartphone consumers have different attitudes towards different types of smartphone. Some smartphones have attracted negative attitudes among the consumers. For instance, a model such as Tecno and Huawei have received a lot of criticism that have resulted to negative attitudes among the consumers. These models have found it hard to penetrate in the market as consumers are reluctant to buy them. This is can be attributed to the negative attitude among the consumers hence making purchase decisions against these models. On contrary, model such as IPhone 5, Nokia brand and Samsung are highly popular as consumers have positive attitudes towards these popular smartphone models. Most consumers are influenced to make a decision that favors these models as evident through the increased demand of the brands. Barber and Dodd (2009) state that consumers’ attitude is not permanent. Consumers’ attitude is always developing and changing depending on the new experiences that the consumers encounter. Diecidue (2012) argues that the increased innovations in the recent years have affected the smartphone market. Today, consumers will have a positive attitude towards a certain brand but after a short period, a new brand come to the market and negates the existing brands. Therefore, smartphones are constantly evaluating the consumers’ attitudes to ensure that they remain relevant in the highly innovative market. This paper has discussed the internal factors that affect the smartphone consumers’ decision-making process. In particular, the paper has examined five internal factors namely, needs and motivation, consumer perception, consumer learning and involvement, consumer attitude development and change and personality and self-concept. The demand for the smartphone has increased exponentially in the recent years, and the rise can be attributed to numerous factors. Internal factors such as needs and motivation, consumer perception, consumer attitude development and change, personality and self-concept and consumer learning and environment influences smartphone consumers in their buying decision making and have contributed to the increase in the demand of the market. In today’s technological world, smartphones have become a basic need to people of all walks of life. As a result, consumers are motivated to meet these basic needs. In addition, the smartphone consumers buying decision-making is influenced by the personality of the consumers, self-concepts, and attitude towards the various types of the smartphone. References Azad, N. & Safaei, M., 2012. The impact of brand value on brand selection: Case study of mobile phone selection. Management Science Letters, 2(1): 1233-1238. Ajzen, I. & Fishbein, M. (2011). Understanding attitudes and predicting social behavior. Englewood Cliffs, N.J., Prentice hall. Allport, G. (2010). Attitudes Handbook of social psychology. Worcester, MA: Clark University Press. Barber, N., & Dodd, T. (2009). The Influence of Purchase Confidence on Information Source Selection: Implications for Hospitality Industry. FIU Hospitality Review, 37-57. Comegys, C. & Vaisanen, J. (2009). Effects of Consumer Trust and Risk on Online Purchase. International Journal of Management, 295-308. Drake, J. & Wicherski, G. (2014). Android hacker's handbook. Indianapolis, IN: Wiley. Diecidue, E., (2012). 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