The Implications of Consumer Behavior - Example

Consumer Decision Making – Internal Factor Name Course Name and Code Date Table of Contents Table of Contents 2 Executive Summary 3 Introduction 4 Internal factors 4 Motivation 5 Involvement 6 Personality 7 Perception 8 Learning 9 Attitude 10 Conclusion 11 References 12 Executive Summary The internal factors that affect consumer decision-making process are those that are found within the person and hence they are difficult to comprehend as compared to external factors. Consumer behavior in marketing is the study of individuals, groups, and/or organizations together with processes and activities used in selecting, securing, and disposing products, services, experiences as well as ideas to meet the needs and impacts that these processes have on the customer and the larger society. The internal factors that affect consumer-purchasing decision include motivation, personality, learning, attitude, involvement and perception. Given this explanation, this paper discusses internal factors and how they influence consumer behavior. Introduction Consumer Decision Making also referred to as Consumer Behavior is the decision acts and processes of individuals involved in buying and consumption of products and services. For instance, it involves understanding why consumers make purchasing decisions that they make, the factors that influence customer purchases, and above all, the changing factors within the society (Huddleston, 2011). Consumer behavior can generally be referred to the buying characteristics of the final consumer. In essence, it is the study of individuals, groups, and/or organizations together with processes and activities used in selecting, securing, and disposing products, services, experiences as well as ideas to meet the needs and impacts that these processes have on the customer and the larger society. The black box model, which was developed from the black box theory of behaviorism, shows the interaction of stimuli, consumer characteristics, decision processes as well as consumer responses. In this regard, this model has the capacity to distinguish between interpersonal stimuli or intrapersonal stimuli. This paper using different products and/or services discusses how consumer internal factors affect the consumer decision-making process. Internal factors Consumer decision-making process is the process by which individuals decides what, when, where, how and from whom to purchase goods and services (Kittitanarux, 2010). There are several factors that influence consumer-purchasing decision including social factors; family, roles and status, and reference groups (Huddleston, 2011). Economic factors include family size, disposable income propensity to consume, and consumer credit (Jansson-Boyd, 2010). Cultural factors such as values, beliefs, and arts (Weeden, 2013). Personal factors, which include things, like age, occupation, lifestyle, and personality. Similarly, psychological factors which mainly comprise of basic needs (Percy & Rosenbaum-Elliott, 2012). The internal factors that affect consumer behavior can be discussed in the following broad categories: Motivation These psychological forces determine the direction of individual’s behavior, level of efforts and ones level of persistence particularly when he/she faces an obstacle. For instance, it is the process that account for a person’s intensity, direction together with effort persistence towards attaining a specific goal. In general, the driving force compel individual consumer to act. The inward forces drive consumers to get what they need. The Maslow’s Hierarchy of needs as shown in the diagram below excellently describes motivation Maslow’s Hierarchy of Needs According to this theory, people have the tendency of fulfilling their basic needs such as food, shelter, and clothing first before opting for other needs higher in the hierarchy (Williams, 2012). After fulfilling the psychological needs, individuals will start to work towards fulfilling their safety needs, which will then be followed by social needs, self esteem, and lastly self actualization needs will be fulfilled last (Ziniel, 2013). For example, during the economic downturn of 2008 the sales of new automobiles dropped drastically across the globe (Huddleston, 2011). However, Hyundai vehicles maintained rather increased their sales; for instance, the company understood that their consumers as well as prospective customers needed to feel secure (Sokolowski, 2013). Due to this fact, the company ran a promotional campaign that assured customers that they would return their cars in the event that they are unable to make payment on them without damaging credit. Because people across the globe had an in-drive motive of being secure, they bought Hyundai cars thus allowing the company to make more profits. Involvement This particularly consists of differences in intensity of interest with which consumers approach their dealings with the marketplace (Majumdar, 2010). Involvement is regarded as the reflection of strong motivation with regard to the perceived high personal relevance of products or services in a particular context. Involvement varies greatly from individual to individual depending on different situational contexts and is related to some form of arousal (Schmid, 2011). There are three types of involvement: Routinized response behavior: here the customer buys commodities as a routine. These are products or services that the customers buy for daily use and hence they keep on buying every now and then. Companies selling food commodities need not to heavily invest in advertisement as these products have high demand. Low Involvement decision: these decision demands for some involvement. These are higher value products and hence involve certain amount of risk. Unlike Routinized response, the products are not purchased on every day basis but after a few years or after considerable amount of time. Panasonic Plasma Display Televisions are an example; the company must position its products as the best in the market in order for the customers to purchase them. The customer will conduct an intensive research considering different television options before making a purchase decision. High involvement decision making: they are significantly important decisions given the fact that products bought here are of very high value and thus involves a lot of risk and they are bought once in a lifetime or few times in one’s life (Huddleston, 2011). The purchase of a luxury car or home, this requires intensive involvement of the customer, since these decisions are made ones in a lifetime (Wells & Foxall, 2012). For this reason, the selling company must come up with durable products that have the capacity to serve the customer for an extended period. Personality This is the psychological characteristics or traits that are essential in determining and reflecting how an individual responds to his/her environment. Personality is significantly helpful to marketing in the sense that no two people are exactly the same; for this reason, marketers look for personality characteristics that are common in different consumers. Consumers with the same traits are then grouped together basing on the identified similar personality. For instance, customers can have personalities such as being adventurers, tough, manly, stylish, mature and/or sporting. In the same line of argument, the outlook or color of a product can have vast influence on customer emotions, actions, and above all how he/she reacts to various things, ideas, and people in a given context. In some occasions, marketers attach human personality trait to a brand in order to achieve product differentiation at the marketplace (Huddleston, 2011). For instance, such traits are essential in signifying the brand behavior through the persons representing the brand. Personality is mainly important in describing ones disposition, shows why people are different and above all encompasses an individual’s characteristics. The five main personalities that are largely used by psychologists to describe people include openness, conscientiousness, extraversion, agreeableness and neuroticism. Customers characterized of being highly open or sensation seekers are in one way another targeted by marketers by ads that appeal to the ideal self that people seek. For Instance, Uniliver Company advertise its beauty and cosmetics products in a manner that appeals to the ideal person that sensation seekers covet becoming. In essence, people buy commodities to enhance how they feel about themselves. Perception This is the process through which a person selects, organizes and interprets stimuli into a meaningful and coherent picture of the world. In essence, it describes how human beings see or view the world around them. It is the gathering of information through human senses; hearing, seeing, touching, testing, sensing, and smelling (Huddleston, 2011). Perception has elements including sensation which is the immediate and direct response of the sensory organs to the stimuli, absolute threshold which is the lowest level at which an individual can experience a sensation. Absolute threshold is that point that a person can detect and distinguish something and nothing. Subliminal perception; these are stimuli that are weak to be consciously seen or heard or may be strong to be perceived by one or more receptor cells. Perception in general, is the process of how human beings interpret the world around them to make sense of it. Consumers are bombarded by numerous advertisement messages on radio, internet, television, and even on print media. The way the customer perceives the ads message he may decide to purchase the products being advertised or not. For example, weight loss products are promoted ort marketed using slim-looking models and trim after using their commodities; this in one way or another influence the customers to believe that after using the products they will look like the model. Learning This is viewed as a relatively permanent change in behavior that occurs as a result of experience (Wolf, 2013). However, from the marketing perspective, consumer learning is the process by which people acquire the purchase and consume knowledge and experience that they apply to future related behavior (Huddleston, 2011). It is a continuous process, which continually involves and changes due to the acquisition of new knowledge. In this essence, the newly acquired knowledge and personal experience are used as feedback to the individual and hence it provides the basis for future behavior in similar situations. Elements of learning include motivation, cues, response, and reinforcement. Generally, learning refers to the process through which consumers change the behavior particularly after gaining information or experience. It is the reason why they will not buy a bad product twice. In addition, it is important to note that learning does not affect what the customer buys; but it affects how they shop (Kardes, Cronley & Cline, 2010). In this regard, people with less information or experience about a product or a brand, they will seek out more information as compared to people who have already used the product before (Robinson, Heitmann & Dieke, 2011). For example, McDonald’s offer customers free coffee samples to try in order to promote their products. On the other hand, pharmaceutical representatives leave brochures and samples of their products at the doctor’s office in order to effectively promote their goods. Attitude This is a learned predisposition to react consistently favorable or unfavorable manner with respect to a given object. Attitude is the way human beings think, act, and feel toward a given environmental aspect (Huddleston, 2011). It occurs within and is largely affected by situations - circumstances or events that have the capacity to influence the relationship between behavior and attitude at a specific point in time (Jansson-Boyd, 2010). Organizations always work to keep in touch with the changing consumer attitudes; for instance, marketers must be able to attract customers through marketing messages and appeals (Lamb, 2012). Attitudes can be regarded as mental positions or emotional feelings, unfavorable or favorable evaluation, and/or action tendencies that consumers have about products, services, companies, issues and institutions (Lantos, 2010). Attitudes are enduring and given that they are based on people’s values and beliefs, they are extremely hard or difficult to change (Cole, 2013). In this essence, companies work hard to ensure that consumers have a good feeling about what they are offering. For example, during the economic downturn of 2008, taxpayer-paid government bailout of banks in the US, this changed the attitude of Americans towards big bank (Huddleston, 2011). In this regard, smaller bank like the Worthington National Bank found the opportunity to expand its business. The bank ran an advert “Did Your Bank Take a Bailout? We Didn’t.” and “Just Say NO to Bailout. Bank Responsibly!?” due to this the Worthington National Bank received massive deposits from new customers. Conclusion Customer Behavior is a key aspect that business companies must have an excellent and in-depth understanding. For instance, various factors drive customers to make different buying decision. It has been established that both external and internal factors affect or have an influence on the customer buying decision. This paper has extensively and intensively discussed how internal factors affect consumer-purchasing decision. Motivation is the process that account for a person’s intensity, direction together with effort persistence towards attaining a specific goal. The consumer must have a need that should be fulfilled and this need is the one that will drive him/her to make a purchase decision. Involvement on the other hand is regarded as the reflection of strong motivation with regard to the perceived high personal relevance of products or services in a particular context. Basic needs products require less customer involvement because as the purchase decision for these products is frequent. Commodities that demand for high-level customer involvement are those products that are purchased once in a lifetime. Other internal factors discussed above include, personality, perception, learning and attitude. References Cole, A. (2013). 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