Consumer Decision-making - Internal Factors of Toyota Australia - Case Study Example

nsumеr Dесisiоn-Mаking – Intеrnаl Fасtоrs Name Institutional affiliation Tutor Date (2193 words) Table of Contents Table of Contents 2 Abstract 3 Introduction 3 Internal Factors 4 Consumer Needs and Motivations 4 Personality and Self-Concept 6 Consumer Perception 8 Importance of Individual Factors 9 Consumer needs and motivation 9 Personality and Self-Concept 10 Consumer perception 10 Conclusion 11 References 11 Abstract The focus of this paper is on the internal factors that influence the consumer decision-making process. The paper will focus on four such internal factors, namely: consumer needs and motivations, personality and self-concept, and consumer perception. The paper will discuss why these factors are more important in influencing consumer decisions than other factors like learning and consumer attitude. The paper will use theories to back the importance of these factors in determining consumer decision-making. Further, the paper will use the case of Toyota Australia in discussing the factors and relate how each of the factors affects the decisions of the consumers in buying Toyota Camry and its parts. Introduction Consumer behaviour can be defined as the behaviour portrayed by the consumers of a product or a service when searching for, purchasing, disposing of, using, and evaluating the product or the service which they perceive will satisfy their needs. Participants in the market are identified in three categories: a) consumers are the people who use the product or service; b) buyers are the people who undertake the procurement of services; and c) payers are the people who exchange money for the value of goods. Marketers of products or services are faced with the difficulty of determining how to market their products (Escalas & Bettman, 2005, p. 379). Identifying consumer needs is thus very important. This decision can be guided by consumer research, which aims to help marketers better understand the interests and desires of the consumers before deciding whom to target. Further, consumer research will help marketers identify consumer attitudes both before and after promotion campaigns for the product or the service (Freling, Crosno, & Henard, 2011, p. 396). Taking a narrative approach and drawing from consumers’ experiences with Toyota Camry and its parts, this paper will focus on the various internal factors that influence brand consumption in reference to theories. Internal Factors Consumer Needs and Motivations Consumer needs and motivation are the most important factors affecting the consumer-making decision. Motivation can be defined as the desire or the driving force to achieve some outcome. A couple of interrelated internal factors can affect a consumer’s desire to achieve some outcomes (Schiffman, O’Cass, Paladino, D’Alessandro, & Bednall, 2011, p. 55). For instance, when a consumer is trying to decide whether to purchase a Toyota Camry, his or her motivation may be affected by the financial position (i.e., whether he or she can afford the vehicle), time constraints (i.e., how soon to purchase the vehicle), perceived risk (i.e., the sustainability of the vehicle), and the overall value in buying the specific vehicle (i.e., the vehicle’s ability to fulfil the perceived role). Motivation has significant implications for marketing because it is closely tied to involvement. In making a purchase decision, the amount of effort that a consumer exerts in the process of decision-making is significant. Highly motivated consumers get involved both mentally and physically in the effort to make a comprehensive decision. However, some products, like basic goods, do not require highly motivated customers. Marketers play a key role in making large sales of their products by ensuring that the consumers are well-fed with the information on such products through promotional campaigns (Lancaster & Massingham, 2010, p. 64). Motivation can be better understood through a motivation model which has four concepts. The first concept, learning, can be defined as a process of acquiring knowledge which will be used in future purchasing decisions. The second concept is tension, which is a force arising from an unfulfilled need. The third concept, drive, is an internal force that impels a consumer to undertake an action geared to satisfy certain needs. Finally, the fourth concept is the cognitive process, which is an attitude model of knowledge, beliefs, and perceptions about a specific product or service (Schiffman et al., 2011, p. 57). When making the decision to purchase Toyota Camry and its parts, the consumer is guided by the need he or she has to satisfy certain goals. There are two types of needs: primary (innate) and secondary (psychogenic), which are needs learnt from culture like prestige and affection. Marketers should be concerned with the product’s specific goals in order to meet both types of needs. Failure to meet the goals results in frustration. For instance, a consumer who purchases a Toyota Camry with the goal of being served by the vehicle for ten years will be frustrated if the vehicle breaks down only two years after purchase. Theoretically, Maslow’s Hierarchy of Needs can be used to understand consumer motivations since consumer goods are used to satisfy a need level. Maslow identified five levels of needs and noted that people tend to satisfy the lower levels first, after which other needs emerge, as illustrated in the model below. Advertisers use Maslow’s theory as the basis of segmentation strategy in their advertising campaigns (Lancaster & Massingham, 2010, p. 66). In positioning, the theory can be used to identify market gaps in terms of needs. For instance, Toyota Australia manufactured the Toyota Camry with a VVTi engine that has six cylinder alloys, is fuel efficient, has improved safety, has increased power, and is efficient in environmental performance; this makes the model unique and well-liked by many people (Griffin & Egan, 2005, p. 25). The hierarchy identifies the market gaps by determining which consumer needs are not meet in the hierarchy. For instance, after the basic needs are met by the target population, the marketer can speculate that the consumers will need vehicles for comfort. Fig 1. Maslow’s Hierarchy of Needs: Maslow’s Hierarchy of Needs. Reprinted from Consumer Behavior by L. Schiffman, A. O’Cass, A. Paladino, S. D’Alessandro, and D. Bednall, 2011, Sydney: Pearson Australia. Copyright 2011. Reprinted with permission. Personality and Self-Concept Schiffman et al. (2011, p. 58) defined personality as the unique portrayal of the characteristics of a person, including his or her psychological and physical behaviours and how the person responds to the physical and social environment. These characteristics are basically unique in different consumers, although some of them may be common among different persons. An individual’s personality is identified and analysed by those who interact with the individual; however, the individual has his or her own vision of his or her personality referred to as self-concept, which may be different from how others view the individual. Toyota needs to understand that consumers make purchase decisions in support of their self-concepts. Marketers therefore need to conduct market research that would help them understand how consumers view themselves in order to get insight into the products and promotion options that may not be obvious (Spielmann & Babin, 2011, p. 468). For instance, a marketer may develop an initial marketing strategy built on obvious consumer behaviours like demographic indicators (e.g., age and income levels). However, an in-depth research on consumer behaviour may give rise to information that reveals that the consumers’ decision to purchase the product is based on fulfilling self-concept objectives which do not relate to the demographic category to which the consumer belongs (Escalas & Bettman, 2005, p. 381). Self-concept is a factor that affects Australian consumers’ decision-making behaviour when they are planning to buy vehicles. Most consumers prefer second-hand vehicles since they typically use company vehicles (Griffin & Egan, 2005, p. 27). Toyota Australia should therefore understand the consumer’s self-concept. Personality and self-concept can be explained by Freudian theory. According to Freudian theory, personality is derived from struggles among three interacting forces: id, ego, and super-ego. In a healthy person, the three forces are well-developed and exist is a state of balance (Lancaster & Massingham, 2010, p. 61). In an unhealthy person, the three forces are underdeveloped, resulting in the balance being disturbed and the individual becoming dissatisfied with himself or herself and the entire world. According to Freud’s psychoanalytic theory, id is the personality component comprised of unconscious energy working to satisfy basic urges, desires, and needs. Id works to ensure that there is immediate satisfaction of demands. Ego is the state of awareness that makes one feel different from others. An individual’s ego refers to the past and the future but not the current state. Super-ego is a personality aspect that ensures that moral standards acquired from parents and the society are maintained. Marketers create fantasies about their products in order to ensure that consumers are able to satisfy their competing needs (Schembri & Merrilees, 2010, p.624). Rich people will have higher levels of ego and will make use of their money to prove that they are different by buying new Toyota Camry while the lower class by used vehicles. Freud’s theory focuses on the consumers’ hopes, dreams, and fears in order to ensure that the goods acquired are rational as well as socially acceptable. Consumer Perception Marketers define perception as the process used by a consumer to identify, interpret, and organize information in order to create meaning. Perception is therefore a psychological variable that creates senses to define a product and consequently influences the decision to purchase a specific product or service. The consumer’s perception of the product value is key to each process in bringing a product to the market, starting from design and continuing to distribution and retail sales (Escalas & Bettman, 2005, p. 382). Consumer perception makes it mandatory for product strategy to ensure that the needs of the consumer are respected for the producer to remain competitive through innovation. Toyota Australia has specialized in the manufacture of vehicles that will be readily acceptable based on the consumer perception that its products are durable, environmentally friendly, and have easily accessible spare parts. Toyota ensures that its products are easily acceptable by innovating new model vehicles any time and ensuring that more spare parts are available. In a mature market, consumer decisions are no longer based on such factors as pricing or the product’s performance but rather on extrinsic factors like service, brand, or the company’s ethical behaviours (Solomon, 2006, p. 77). Toyota Australia realized this factor when it started to manufacture the Toyota Camry as well as Aurion six-cylinder cars and the VVTi, which meets the European vehicle emission standards, making it acceptable in many overseas markets in Europe. In so doing, Toyota demonstrated its recognition of consumers’ interest in the ethical values of environmental pollution associated with emissions. Today’s consumers tend to choose cars which ensure that there is minimal air pollution when driving. Weber’s law on sensation can be used to explain consumer perception. Sensation is the direct response by organs from stimuli; in marketing, the stimuli can arise from an ad or packaging. According to Solomon (2006), Weber’s observation was that “the just noticeable difference between two stimuli was relative to the intensity of the first stimulus” (p. 49). Weber’s law implies that the consumers’ first impression of the product determines how the consumer will perceive the product in the future. Importance of Individual Factors Consumer needs and motivation This is the most important factor in determining the decision to purchase Toyota Camry as it is the driving force for what the consumer wants. Consumer needs comes first as explained by the Maslow’s theory; after being satisfied with the basic needs, a consumer may now decide to buy a Toyota Camry. The decision to buy Toyota Camry comes after gathering information about what the needs are and after evaluating the many available options. What motivates the consumer to buy the vehicle is up to the marketers to proof that the vehicle will meet his or her needs in terms of cost, efficiency, sustainability among other factors. Personality and Self-Concept In reference to the Freud theory, personality is derived from the struggle between three interacting forces: id, ego, and super-ego which exist in a state of balance in a healthy person. Each consumer thinks in a unique way a concept that Toyota should embrace when marketing Toyota Camry. For example, the rich people would want to buy a brand new vehicle to satisfy their ego while the average people would be forced to buy a second hand vehicle if their Id is high. The marketer has to understand the personality and self concept of the target market in order to ensure that majority of the consumers get satisfied all the time (Solomon, 2006, p.69). Consumer perception The psychological sense that is used to define a product is very useful in consumer-decision making. Brand loyalty plays an important role in defining a product that is known to the consumers (Solomon, 2006, p.71). Marketers have to ensure that when consumers mention or hear of the product, they are ready to be associated with as a result of the satisfaction they get from it. New consumers may also use such experience when they are making purchase decision. Conclusion There are many internal factors that influence the decision of a consumer when planning to buy a product. Each of the internal factors influences the consumer by a certain degree. It is the responsibility of the marketers to determine the most important internal factors in order to meet the standards of the consumers’ demands. It is the role of the company to ensure that the Toyota products meet the needs of the targeted consumers in the competitive market. References Escalas, J. E., & Bettman, J. R. (2005). Self-construal, reference groups, and brand meaning. Journal of Consumer Research, 32, 378–389. Freling, T., Crosno, J., & Henard, D. (2011). Brand personality appeal: Conceptualization and empirical validation. Journal of the Academy of Marketing Science, 39(3), 392–406. Griffin, P., & Egan, J. (2005). Toyota Motor Corporation Australia: Submission to Productivity Commission Inquiry. Melbourne: Government Affairs and International Trade Policy. 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