Understanding consumer decision process - Essay Example

UNDERSTANDING CONSUMER DECISION PROCESS In the market situation, interacting factors determines the movement of products and services. One important factor in the conceptualization and production of products and commodities is the target market. The consumers mainly comprise the target market of goods and products produced in the market, thus, factors that affect their decision process with regards to the purchase of different products and services in the market is studied. The consumers' reaction to products offered commands the possible success of certain products. Consumers utilize goods and services on a daily basis. In the present era wherein every product that a consumer can possibly need is available in the market, producers compete mainly on the quality of products and goods offered. The study of factors that contribute to the choice of consumers is an important field that can be explored. Every choice made by the buyers specifically the type of products to buy, the brand, the size and other specifications are affected by factors (Johnson, & Mullen, 1990, p.1). To be able to better demonstrate the behavior of the consumer with regards to the choices made in buying any goods in the market, a certain product is chosen and studied. A Study on Perfumes in the Market Personal items such as pharmaceuticals, cosmetics and perfumes are items that are widely available in the market. Perfumes are products that are available in the market that are produced from the mixture of aromatics or chemical compounds with distinct smell. Through the history, the role of perfumes has evolved from being a fashion and luxury item to a personal necessity (The Columbia Encyclopedia, 2006). In a survey conducted products that are considered of personal necessity has an increasing trend with regards to sales in the market. Perfume and other cosmetic items comprise 10.84% of the sales for the second quarter of 2004 which is comparatively higher than the same period in 2003 (Instituto Brasileiro de Geografia e Statistica, 2004). One company that distributes perfumes in the market is the Ralph Lauren. The company was established in the 70's when Ralph Lauren himself started producing ties and men's wear and in 1971 started designing women's line. It was in the 1978 when Ralph Lauren produced the first line of fragrance and perfume collection. The collection started only from one kind of perfume for each gender (Ralph Lauren Media, 2006). Based on the 2005 report of the company, 9.4% of the total sales were derived from the line perfumes produced (Polo Ralph Lauren, 2006). The perfumes and fragrances are types of products that focus on different target markets. There are perfumes for both men and women and for any ages. Another type of customization with regards to these fragrances is the type of activities that the consumers are involved in. There is a product line that fits subdued activities such those consumers that wear perfumes when going to work. One product line targets the active individuals. This line is called the Ralph Lauren Polo Sports perfume which has two different variants, for men and for women. The target of this perfume line is the particular groups of individuals that are health conscious and either engaged in sports and other physical fitness activities. This group belongs to the population with age ranging from 20 years of age and with no upper limit that are fit and sporty individuals. These products were produced by RL in response to the 90's trend towards the development of a healthy and active lifestyle through sports and exercise enthusiasm (Ralph Lauren Media, 2006). The Consumer Behavior In the study of the marketability of any products, an important focus is given to the behavior of the consumers. The consumer behavior encompasses the practices involved in the sales of any products in the market. It is studied through the combined tools of different scientific fields such as sociology, psychology and other related fields that explore human behavior in the society in relation to product consumption through the use of tools in economics. The perspective in the study of the behavior of consumers is important. To fully understand the possible strategies needed in the particular product under study, the consumers' views of the market processes are taken into consideration (Owen, n.d.). To be able to determine the behavior of the target market of perfumes, study on the factors affecting the decision made by the consumers in purchasing these products. The factors that affect the choice of the consumer with regards to the products purchased are classified under 2 encompassing categories. These are the intrinsic and the extrinsic influences. The intrinsic factors are those found within the individuals themselves which includes values, characteristics and established line of thought. The priorities of an individual are the example of this type of factor. Some consumers that purchased perfumes consider them as necessity to their daily activities. On the other hand, the extrinsic influences are factors that happen outside the consumers control such as the environmental and situational factors. Other factors that can be classified under the extrinsic influences are the norms of the society, the values of the family unit and other interpersonal contact. In family that considers perfumes as a basic need and at a certain age see the importance of having one or even given by the elders, continuing such tradition means a constant demand in the market (Owen, n.d.). To be able to determine the possible reasons that affect the decision process of the consumer, the main focus of this study are the extrinsic factors. There 5 types of the extrinsic influences. The environmental and situational influences, the group influences, influences from the family, cultural, international influences and issues within subgroups in the society (Owen, n.d.). The environmental and situational influences are the factors that affect the interaction of the different groups in the market such as the producer, the consumer and the exchange of resources. It occurs on different stages of the market process such as the accumulation and collection of knowledge regarding the products. This usually takes place through the advertising media or through interactions between different consumer and groups in the population. Another stage in the market process is looking for choices available in the market. These are done by going to places of possible purchase such as the stores may it be in the malls, marketplaces or even virtual purchase interface. The most important stage is the actual purchase made wherein the distinct brand and other specifications are decided upon. This only comprise the initial stage of the market process. Upon purchase the consumers consider the usability and the rate for which a certain product will be used. When the product is exhausted, satisfaction of the consumer determines if a certain product will be purchased again (Owen, n.d.). The Situational Factors that Affect the Consumers Decision Process The situational factors are environmental components present at a given time and space that has certain impact on the decision made by the consumers. These factors transcend the manipulation of the buyers. One important school of thought with regards to the situational marketing influences is that of Belk. The characterization that he proposed can be utilized to generate data. This involves the study of the factors that affect the particular individual, for example the perfume consumer, and the 'stimulus' which is the product purchased such as the perfume. Belk describes each category as independent of each other and stands separate from the consumers and the products. The five situational extrinsic factors are the physical, social, temporal, task-related and antecedent factors. This classification transcends other categories set in the determination of affective factors, thus, are still classified on the basis of these categories (Nicholson, 2001; Owen, n.d.). A. Physical Factors The physical factors includes influential settings happens without the control of the consumer them. Although this may be the case for the buyer, the physical factors can be manipulated by the producers and the distributors of the goods and services to suit needs and demands of the target market. There is a variety of factors that can be categorized as physical factors. This includes the factors that can be changed to the advantage of any or both sides. The location and the setting for the store is one important consideration because it affects the sales of products. The common trend is that consumers shop for items with the nearest proximity them. This is one of the factors considered when the main store of the Ralph Lauren was established in the Madison Avenue. This is due to the fact that it is near the business are and most of the shoppers in the city. Thus, creating the main store in the particular area specifically targets the demand of this type of market population. In this case the trend of online shopping makes it the most convenient to most and for this reason most producers in the market such as the Ralph Lauren sets up online stores to be able to overcome geographical hindrances and location-based sales. Another factor that falls under the physical influences is the atmosphere inside a certain store that offers certain products. This includes the ambience, the mood and the product presentation and arrangement. This factor can be manipulated to be able to attract the consumers to purchase items. The climate and environmental conditions also affects the purchase of products to some level. These factors cannot be manipulated by the producers of the products. In such cases certain promotions are made to be able to make up for possible effects of the factors (Nicholson, 2001; Owen, n.d.; Ralph Lauren Media, 2006). B. Social Factors Included in the social factors are the influences of other people and interpersonal relationships specifically during the decision making process regarding the purchase of products in the market. The most important influence to be considered in the choice made by the consumers is that of the household or the family unit. In any interpersonal development the influence of the family is the main contributing factor, in the clothes to wear, the food to eat and even the choices for perfumes. A usual trends for families in that the mother and the female members use the same line of products. This goes for the male members of the family also. This is due to the fact the younger generation usually idolizes the older generation in the family. Catching the attention of the head of the family is one way of attracting consumers of the succeeding generation (Owen, n.d.). The culture and norms of the group from where a consumer originates is another significant factor that can affect the choices that he or she makes for example in making any purchase. One way for the producer of any product to cope up with such factors is to determine the particular demands of different people from different culture and nation (Owen, n.d.). Ralph Lauren answers such necessity by having different distributors in different regions in the world that studies the differences in the attitudes and responses of towards the products that are being marketed. In the year 2005, the company distributed the product to different regions around the globe. The total sales reached 1.7 billion dollars that resulted from the following proportions: 69.2 percent from the United States; 15.7 percent from the English region, Europe; Japan contributed 9.9% of the total sales; the Pacific region comprise 3.3% of the sales and 1.9% includes contributing sales input from Australia, Canada, South America and other regions. These figures reflect the wholesales made for the different regions around the world and can also predict the demand level for such products (Polo Ralph Lauren, 2006). The social class to which a particular consumer belongs can also be categorized under the social factors. This includes the activities that a person is involved in, the type of friends that the person have and the groups of people that the consumer is acquainted have significant effects of the type of products that are chosen in the market. Knowledge on the certain brand can be brought about by recommendation given by friends regarding products that they are actually using. It usually influences the consumers for they need not try on their own every products and brands that are available in the market, a push or an advice from other people would be enough for one to buy certain products (Nicholson, 2001). Being a social animal, man can be affected by different event in the surroundings. Purchase of different products can be induced by varying situations like encouraging ads seen in different form of media, talking to close acquaintances, co-shoppers in the mall and even the sales representatives. The world of buying and selling is such a dynamic dimension that one can never tell even the consumer themselves what will be purchased until the transaction was already done. C. Task-related Factors According to Belk, the task-related factor is another independent category that in determining the dynamics of the consumers behavior. This category determines the main purpose for buying any products in the market. The existence of such factors is due to the fact that people take hold of the products available in the market due to different reasons. The consumer treats the purchasing of items at varying level of importance. For example, buying the basic needs entails priority as compared to luxury items. Different treatments can also be observed when purchasing items as a gift or for personal consumption. Another scenario is buying needs for the household and for work. A variation can also be observed when buying in the stores and purchasing products through the internet (Nicholson, 2001). D. Temporal Factors The factors that are time related are covered by this category. This includes the season fro which the particular product is purchased, and also the time and day of the week. Another factor is the time frame that necessitates the purchase of certain items. An example is the need for certain materials that will be used in the workplace. This affects the behavior of the consumer in the purchase of such products. Another scenario on the other hand is the seasonal availability of certain products. In this case, buyers become conscious of the time wherein the particular products are offered in the marketplace (Nicholson, 2001; Owen, n.d.). E. Antecedent Factors These are factors that are caused by the consumers themselves. The reactions of the consumers which can either be positive or negative to the interplay of events that occur. These affect the decision making process due to the fact that modification of the particular situation can occur as a result of such events. This category also encompasses the change in attitude or disposition resulting from weariness in buying things and even ecstatic reactions to finding the products that suits their taste. Thus, these factors can enhance or worsen the decision making of consumers (Nicholson, 2001; Owen, n.d.). Factors of Effect On the basis of the conducted study, the social factor can be considered as the most important factor of influence with regards to the decisions made by the consumers. This is due to the fact that it encompasses the factors that have the greatest influence not only in the marketing situations alone but also in the interpersonal relationship of every individual. One important factor that is under the social factors is the culture of the consumer. This includes the effect brought about by other individuals in the society that includes the norms, the beliefs, moral values and practices (Hawkins et al, 1998; Perner, n.d.b). The most important unit of the society that shapes the culture of an individual is the family. In the family, people learn to value things. It is where they develop concern for other people. In the case of the marketing world, the priorities of every consumer depend on the culture and values inculcated by the family. The value for interpersonal relationships causes consumers to purchase products that can help or express the importance of other people to them. Value of oneself is also learned and through this the person learns to take care of personal well-being. This can be observed by the products that consumers buy for their own consumption (Owen, n.d.). There many issues that can effect the decision making of a consumer when the family is taken into consideration. This is due to the fact that a person's interaction in the household is a multitasking interpersonal relationship. Most of the time being a consumer that is faced with infinite product choices, every decision made takes into consideration the role that is played in the household. This includes being a parent, a sibling, a son or daughter, or the one who works for the family. The process of purchase is the synthesis of the family influence and the intrapersonal decision making. The stage in life which a person belongs in relation to the family unit also has great effect on the purchase of products. When a person is in the stage of prepubescent and adolescent, the parents takes into consideration that a large portion of the expenses of the family is incurred for the needs of the children. When a person starts to earn his/her own income, more of the personal needs can be acquired while also taking into consideration the needs of the other members of the family. This is where a consumer starts to make certain decisions on the products to buy such as the perfume and other personal necessities (Brown, 2006). In the study of the of the perfume products, it was determined that although some may consider that it serves as luxury, the sales this type of industry continually increases. In relation to this the social class from where a consumer originates is also another factor that influence the consumer decision process. In the report presented by the Key Note Market (2006), the sales in the United Kingdom showed an increase of 6.7%, thus, becoming the industry with continues growth. The same study showed that the families that belong to the lower classes has an average 2.80 pounds average were being spent to perfumes and beauty products while the 16.40 ponds average were spent by the group belonging to the upper classes. This shows that cosmetic products and perfumes are for all levels of the population unlike in the early part of history wherein it is considered as one of the luxury item that can be afforded by the members of the higher class. L'Oreal is the leading manufacturer of perfumes. It is the distributor of the RL line of perfumes (Key Note Market Report, 2006). The influence brought about by the differences in social classes of the consumer can be considered of great importance. This is due to the stratification of the society that usually dictates the financial status of the individuals. Some of the indications of social classes include educational level, the possessions, the earnings, and the cultural origin. These factors commonly dictate the type, the quality and the amount and measure of the items that can be purchased (Brown, 2006). Another reason that can be attributed to the continued increase in the sales of the perfume line of Ralph Lauren is due to the fact that its founder Ralph Lauren had become an important personality in the society. His opinions and regarding marketable products are heard. This is attributed to the fact that the consumers gives importance to the opinions and insight of personalities and groups whom they deemed knowledgeable on the particular product of interest. During the establishment of the RL, a significant increase in the market covered and sales was experienced when the clothes and the perfumes were used by movie stars and prominent personalities in the United States (Brown, 2006; Ralph Lauren Media, 2006). Other scenarios that exemplify the influence brought about by the opinions of prominent people regarding the products distributed in the market can be observed when a doctor recommends a medicine; an actress uses a certain brand of cosmetics; or an athlete advocates a footwear brand. The consumers deemed that these group of people is the authority of choice for certain products, thus, they may imitate the products that the prominent people purchase. Another factor that can affect the choice of the consumers is the reputation of the company that produced the particular product. People do not always look at the cost that can be incurred in buying certain products. It a common situation that consumers choose the widely used products rather than new lines that are not yet tested by a large portion of the population. The reference groups are social cluster that can be considered as an assemblage of the people that has common attributes and beliefs. This classification may be formal or informal such as the clique or academic or organizations in the community. One type of this reference group is the 'membership group'. It is usually the target of market transactions due to the fact that when the loyalty of these groups with regards products purchased, a consensus is commonly achieved. The 'aspiration groups' on the other hand are groups that the particular consumers wanted to be identified into. Buying perfumes that are beyond the resources of an individual can be judged as impractical. One possible reason for such purchase is to be identified to belong in certain aspired group in the society. In contrary though, there are groups that consumers avoid being associated with. These are referred to as the 'disassociate groups'. When consumers learn of the negative reputation of certain groups, they often associate the products purchased by this group, thus, avoidance of certain products to prevent being identified with these group (Brown, 2006). The social factors are the most significant dynamics in the marketplace. This is due to the fact that social influences is the main factor that is being used and stimulated by advertising agencies to be able to catch and maintain the attention of the consumers. This also often dictates the demand for the production of products in the market. The reaction of the public to products released in the market can be studied to determine the trends are usually measured through social indications. Ralph Lauren is a company that based decisions made on the basis of the feasibility studies conducted in the market, thus, enhancing sensitivity to the needs of the different sectors and groups in the society. Marketing Strategies Upon the determination of the multitude of factors that affect the decision making process of consumers, formulation of the possible course of action to be taken in order to better attend to their needs. To be able to better present the possible strategies that will improve the marketability of the products of the chosen company, the 'marketing mix' is taken into consideration. The 4 P's includes four of the most important components in the marketing process (The Odyssey, n.d.; McCarthy, 1960): The first component is the product that is being studied in the market. In this case, the perfume line produced by Ralph Lauren is the main focus of the study. This line of products is only one of the many products from the company. RL also produces clothes, home accessories and decors, and other related items. One of the main strategies of the company is to maintain the present product line and still add more to products. This will be very essential for further growth of the company. In addition to this strategy, the company needs to first expand the choices for retail in the products that are already present. This is due to the fact that the members of the population belonging to the lower classes of the society are not reached by the market strategy. Although the company leans on the production of specialized products for the population of the business and working class, it must be considered that every group of consumers is important in the market (Lauterborn,1990). The price set for a particular product also dictates the reaction of the consumers in the market. RL is one of the companies that aim for 'specialty retail' which leads to the trend of high quality, low quantity production with high market value. One strategy that can be done to be able to increase market is to produce a line that the general population can purchase. A possible line of cologne that can be used for everyday activity can be produced with higher quantity at a lower cost compared to the specialty types (Lauterborn,1990; Culliton, 1948). With regards to the place of distribution, a wider coverage is needed by the company. Most of the products distributed by RL can be purchased as selected venues only. One of the goals is to bloom in the international market wherein only few countries are covered at present. Additional dispersion is one important step to have better proximity to the consumers. Virtual coverage is important in marketing process in the present era. Online interface on the other hand needs an improvement with regards to the interactivity in relation to purchasing Promotion includes every technique utilized in selling the product. It includes all the factors such as knowledge of the target market, the consumer behavior and ultimately leading to sales. With regards to the perfume line offered by RL, minimal improvement in the promotion is required due to the fact that the brand itself if well known for quality, thus, decision of the consumer to purchase the product mainly depends on the affordability and the availability of the product (Lauterborn,1990). To summarize, Ralph Lauren is a company that caters to specialized market, thus, to be able to have a wider coverage, an increase in the range of products produced and be made available in the market is required. Price ranges can also be broadened and coverage and distribution to different countries can also be undertaken. The generalization is a result of the study on the factors that affect the consumer's decision making process, the most significant of which are the social factors. Bibliography Brown, A. (2006) What is consumer behavior [online]. Available from [Accessed 29 May 2006] Culliton, J. 1948. 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Columbia University Press. The Odyssey (n.d.) The 4 p's [online]. Available from: [Accessed 28 May 2006] Read More