External Factors Affecting Consumer Behaviour - Coursework Example

External Factors Affecting Consumer Behaviour Name Course Name and Code Instructor’s Name Date Introduction Decision making in any circumstance is a process that must be undertaken cautiously and carefully in order to get better results following the decision. People from different walks of life make decisions on daily basis with regard to their lives, work, career, and purchasing of goods and services. There are several influences that compel individuals to make decisions in specific direction (Wright, 2006). Consumers or customers are the wider category or class of people that are faced with decision making almost every single time in their lives. The art of purchasing is to a large extent affected by factors that in most cases are beyond their control despite of these factors having a direct or indirect impact on their daily lives. Gurus in consumer behaviour have worked and are still working extra harder to have a clear understanding with regard to consumer behaviour. Following these unending efforts; they have established that one’s culture, subculture, and household structure or family, together with the groups that an individual associates with are some of the external factors that affect consumer decision making process. Experts in the field of marketing refer to these as external influences mainly because the origin of the influence comes from not within an individual self rather it is from the outside (Wright, 2006). In the current market setting consumers are exposed to a myriad variety of products and services to select from; furthermore, companies are competing fiercely for these consumers. This factual evidence is critical and hence understanding consumer behaviour is significantly vital for the success of any business. It is important to note that both internal and external factors are dependent and work together particularly in the decision making process of the consumer (Comegys, et al., 2009). This paper discusses the external factors affecting the consumer decision making process particularly in the event of purchasing a computer. Group Behavior Human beings in their entire lifetime are regarded as social beings who like to associate with each other in group setting. A group is represented by two or more people sharing a set of norms, values, and or beliefs and they interact to either accomplish mutual or individual goals. Marketing specialists and experts have alluded that approximately all consumer behaviour occurs or takes place within a group setting (Sokolowiski, 2011). For instance, it said that norms and values governing any group usually take into account all the significant behavioural aspects for the functioning of the association and hence going against or braking group rules can result into penalties. A group can influence the buying behaviour of an individual through the following three factors: the attitudes towards that group this might include things like pride, status and class; nature of the group is another factor which comprises of elements like cohesiveness, frequently interacting, and exclusive membership (Wright, 2006). Lastly, the nature of the product or service; the visibility of the product and their uniqueness have tremendous effect on consumer decision making procedure. Examples of groups include: friends connection, alumina of an institution, membership clubs etc. It is common and obvious that individuals crave to be identified with others; a reference group in this case refers to any person or group that serves as a benchmark or a point of comparison for a person particularly in coming up with either specific or general values, attitudes or a specific guide for behaviour. From a marketing point of view, reference group are groups that act as frames of reference for persons with regard to their purchase or consumption decisions. Consequently, marketers have established that purchasing decisions in most cases are arrived at between group and reference groups. From definition, a group comprises of two or more people sharing a set of beliefs, norms and values and has implicit and explicit relationship. On the other hand reference group is individual’s presumed perspective or values that are based on during individual decision making process. Reference groups can be classified into two broad categories; normative reference groups and comparative reference groups (Sokolowiski, 2011). The normative reference groups are widely defined by values and behaviour while comparative reference groups serve as a basis for particular attitudes or behaviour (Comegys, et al., 2009). Reference can be contractual, inspirational, disclaimer or avoidance. There are various factors that affect reference group influence; these factors include: information and experience; credibility, attractiveness and power of the reference group; the quality or conspicuousness of the product; the degree of consumer conformity to the reference group; the availability of the reference groups and the marketing created reference group (Sokolowiski, 2011). Some of the consumer related reference groups are: shopping groups, work groups, brand communities, consumer action groups, virtual groups, and friendship groups. These groups provide massive support to consumers particularly during the consumer decision marketing process. Norms are the general rules and standards of behaviour that members of a group must adhere to in order to belong. Similarly, values are the shared beliefs among the group members and each member is supposed to hold them to heart for the group remain intact and functional. Equally important, socialization is a process through which new group members learn the groups system. Through the group an individual can attain status (Sokolowiski, 2011). Following this comprehensive discussion, a group that one belongs to can influence his/her computer buying decision. For instance, if the members of the group have chosen a specific computer brand say Compaq, new members to the group will also buy similar computer in order to belong. Group behaviour is extremely important in when coming up with marketing strategies; the marketing messages should be designed to influence specific groups or market segments that have people sharing common interests, values, beliefs and customs. Groups exhibit consuming behaviour that is common to all group members and hence it is an ideal factor to consider when marketing a specific product or service. The desire and aspiration to have similar products as a basis of belonging has direct influence on consumer behaviour. Culture Individual activities are to a large extent influenced by the prevailing culture within any society. Consumers like any other group people are also vastly influenced by culture through the values and norms established by the society within which they live (Sokolowiski, 2011). Culture is the wider environmental facet that has immense impact on consumer behaviour. Culture is usually inoculated; for instance it is passed down from generation to generation using avenues like family members, tradition and culture. Culture evolves, in this respect there is possibilities of relating benefits of a brand or product with new values, consequently, if the product or brand does not a gratifying effect to the community, then, it will be necessary to change that product to comply with the norms and values of that society (Sokolowiski, 2011). Culture can be defined as the sum total of learnt beliefs, values, and customs that serve to direct consumer behaviour of members of a particular society. Culture is characterized by various things; for instance, culture is invented, people or individuals are responsible for inventing their own culture. Culture is also acquired through learning; it is not biological or intrinsic (Farrell & Pride, 2011). Cultural values learning, commences very early in the life through social interactions among families and friends. Similarly, culture is shared; large groups of people share culture, for example, a certain language or religion is shared across huge groups of individuals. It has also been established that culture satisfies the needs; it offers order, direction and guides communities and societies at large in all aspects of life through provision of certified methods of meeting the personal, psychological and social needs (Farrell & Pride, 2011). In marketing, cultures are said to be similar but different; for instance, different cultures have many things in common; for examples, feature of culture like dressing and cooking can be found across cultures. Ultimately, culture is not static, the changes in culture are always gradual and continuous, however, depending on the moment; these changes can be rapid or slow. Beliefs are the verbal statements that mirror the specific knowledge and assessment of a person, product, store or brand. Values on the other hand are relatively few in number but serve as a guide for culturally acceptable behaviour (Blythe, 2013). Values are hard, enduring and difficult to change. Furthermore, they are not tied to specific situations or objects and they are widely accepted by community members. The core values that are fostered for example in Australia are sense of accomplishment, public image and authority, self direction, benevolence, conformity, security, stimulation, and hedonism (Farrell & Pride, 2011). In the American society the principle values include: achievement and success, activity, freedom, external comfort, material comfort, humanitarianism, youthfulness, fitness and health, progress, efficiency and particularity. Customs are the evidently acceptable modes of behaviour; they are approved ways of behaving in particular situations. The universally accepted core values for service are consistency, efficiency, ease, responsiveness, and timelessness. Information technology is the current universal culture; for instance, technology is used in various fields to help advance human lies. The purchase of a computer by an individual instils various values into the buyer. The buyer will feel that he has achieved, conformed to the society, and also he will attain efficiency in his work. Marketers with aptitude of success must always take into account these values in order to win customer confidence and thus help or aid them in prompt decision making (Hoyer & MacInnis, 2008). The consumer decision making process is wholly anchored on the cultural values and thus marketing activities of any company must be aligned to these values. Culture is largely important in influencing the consumer’s decision making process; the values that are held by a specific community compel people or individuals to behave in a particular manner (Blythe, 2013). For example the culture that embraces achievement, humanitarianism and progress; these values will command its members to behave, live, and purchase commodities that uphold the culture. Culture in this regard has immense influence on the consumer decision making process. Subculture A subculture is a segment within a culture that share a set of meanings, customs, values and/or activities that differ in certain respects from those of the overall culture. It is also defined as a distinct cultural group that exists as an identifiable segment within a larger, more complex multicultural society (Blythe, 2013). In marketing, subculture studies and analysis are critical in enabling the marketing team to focus on beliefs and customs shared by members of distinct sub group in order to make them favourable target for specific marketing attention. Subcultures are mainly identified by their unique beliefs, values and customs they subscribe to by their members. In most cases members of a subculture have their own clique of language and self-identification; however, the core cultural themes that are common to the larger population are also found in specific subcultures (Lantos, 2010). For example, we have ethnic subcultures, religious subcultures, geographic and regional subcultures, racial subcultures, and age subcultures (Blythe, 2013). In this regard, marketers can brand their products and device marketing techniques and methods to target these specific groups. Taking an example of Generation Y Market segment, for instance those individual born between the early nineteen eighties to mid nineteen nineties have been found to be open to change; they are flexible to change (Farrell & Pride, 2011). These individuals are also technologically sound and hence not loyal to brands. Consequently, a substantial fraction of them are highly influenced by peers and friends. Furthermore, studies have shown that these persons are confident and optimistic in life thus they are career-focused and ambitious (Hoyer & MacInnis, 2008). When marketing to such a market segment, marketers must be flexible in their marketing strategies and use marketing tools that will attract and capture the attention of this market (East, et al., 2013).. For instance, the employment of integrated marketing communication strategies will virtually win them and ultimately help them in purchase decision making process (Lantos, 2010). From this discussion, the generation Y subculture is a highly dynamic segment in the society (Egan, 2007). For this matter, the decision for buying a computer by an individual is not only tied to the brand but also the peers or the group he/she associates with. They can easily be swayed or influenced by the group, new brands on the market, and the performance of the product because they are said to be technologically sound (Lamb, et al., 2008). The uniqueness that is observed in subcultures can only be maintained if only and only members of that subculture hold to heart their values and behaviour (Farrell & Pride, 2011). The type of products, services and their way of life in general must conform to the demands of the subculture. In order to be identified by any subculture one must behave and live as the subculture demands. Subcultures have hast influence on the consumer decision making process and thus must taken into consideration. Social Status/Class Across the world there exists a form of class structure or social stratification that has been there through human history. Members of the society are divided in one way or another into a hierarchy of specific status classes in a manner that members of each class have relatively the same status while all members of other classes have either more or less status (Lantos, 2010). Social class is normally hierarchical that ranges from low to the high status while social status is defined on the relative ranking basis with regard to power, wealth and prestige (Lamb, et al., 2011). Consumer social class is defined as his/her standing in the society (Egan, 2007). The social class of the consumer is determined by factors like education, occupation and income. Income is regarded as an important aspect or indicator of social class, however, the relationship is far from ideal mainly because social class is also determined by other elements like place of residence, cultural interests and the world-view (Egan, 2007). The measure of the social class is primarily founded on relative wealth, power and prestige. Social class can be measured through the following: subjective measures which tend to produce many people; reputational measures which involves a selection of community informants responsible for making judgments with regard to the social class membership of other individuals (Comegys, et al.,2009). In the same line of argument, we have objective measures that comprises of selected demographics or socio-economic variables concerning a person. Following this understanding, objective measures, only uses single variable indexes or socio-economic variable to measure social class membership (Comegys, et al.,2009). With regard to occupation, education, and income measurement, composite-variable indexes are used; for instance, a combination of socio-economic factors to come up with one overall measure of social class standing. The Coleman’s status index is used to measure the index of status characteristics and or the socioeconomic status score. The lifestyle orientation and purchasing tendencies of different social classes are tabulated bellow Social Class Life-style orientation Purchasing tendencies Upper Class Good taste, graceful living, good things in life, individual expression, and interested in arts and culture. They form the largest share of all discretionary income. Quality merchandise, expensive hobby and recreation equipment, travel, and art. Purchase luxury cruises, foreign sports cars, and fine jewellery (Noel, 2009) Middle class Respectability, conformity, and social esteem. They are described to have 50% household income (Dillon & Reif, 2004). Items in fashion, items related to self presentation, nice clothing and home items. They are moving up to more luxury goods. They are cash-up bogans Working class Fun oriented, focus on possessions, work related life. They represent a wide group of consumers Newest appliances, sporting events, and food items. They are down-market consumers Lower class Close family relationships, not interested in world affairs, neighbourhood oriented Readily available products and status symbols (Noel, 2009). (Jaachandran, 2004) Social classes have mobility, that is; upward mobility which comprises of the availability of the widely affordable education and opportunities for self-development. Downward mobility; this comprises of young adults who find it extremely hard to do better than their parents. The consumer behaviour applications of class are described using clothing, fashion and shopping; home decorations; pursuit of leisure, saving, spending and credit; and social class and communication (Blythe, 2013). Marketers use the upward pull strategy to target the middle class; this strategy implies that the aspirations of the middle class are to belong to the upper middle class (Hoyer & MacInnis, 2008). This social class also prefers products and services consumed by the upper middle class. Further, they position for upper middle class symbolism for middle class products. The computer purchase decision in this class is highly influenced by the desire to belong (Diecidue, et al., 2012). Because the upper middle class have computers that help them in their daily activities, the middle class because of the aspiration of wanting to belong to the upper middle class they will be prompted to make a purchase. Each social class has its own way of life, the products and services that consumers consume in different socials classes mainly indentify that class (Noel, 2009). Demands for the upper or affluent social class are different from the working class; consequently the needs and wants of the middle class are not similar to those of the lower class (Dillon & Reif, 2004). The dynamics of each social class describes the needs of that class and hence the purchasing behaviour within these social classes can easily be distinguished (Jaachandran, 2004). From this explanation, social class is a significant factor that impacts consumer decision making process. Family A family is a group of two or more people who are both related by blood, marriage, or adoption and residing together in the same household. This is the basic social unity in the society and hence has major impact on the way its members behave and make decision with regard to different aspects of life (Solomon, 2006). There are four main types of families: couple-only families, two-parent families, single-parent families, and other families. An individual’s immediate family members play a significant role in influencing him/her in consumer decision making process or buying behaviour (Diecidue, et al., 2012). The common composition of a family consist parents, siblings, spouse, grandparents and relatives. Anything that a person imbibes from parents automatically his/her culture and accordingly, all that he sees’s from his/her childhood becomes his habit or lifestyle (Solomon, 2006). From a general point of view, a family is the basic and by far most important reference group; and equally important, it is the fundamental consumption unit for a wide range of consumer goods. The family has tremendous importance in an individual’s life; for instance, all the interpersonal skills and religious values like morals and ethical values are learnt within the family (Bluschke, 2011). The primary economic wellbeing and emotional support are primarily established in the family. In the same line of importance, the family provides the primary social relationship vital for a suitable lifestyle (Lamb, et al., 2011). The family life cycle comprises of bachelor stage, newly married, full nest I, full nest ii, full nest iii, empty nest I, and solitary survivor. The family or household decision making process is usually initiated by both parents and children (Noel, 2009). Marketers and other sales people in this regard come up with product or service communication targeting both parents and children (Lamb, et al., 2008). The children then influence their parents while parents gather information about the product. The purchase decision is usually made by the parents who eventually make the purchase; the product purchased is then used by the whole family (Noel, 2009). The family has different roles in consumer decision making; for instance, we have the influencers; those family members who provide the information about the availability of a product or a service to other members (East, et al., 2013). The gatekeepers; these are individuals within the family who control the information about a product or a service into the family (Solomon, 2006). Deciders; among the family members, those people who make the final product purchasing decision or those who determine where to buy for, purchase, use, consume or dispose specific service or product. The buyers in the family are those people who make the actual purchase of products and services (Dillon & Reif, 2004). Consequently, we have preparers; these are individuals who transform a product or service into suitable form for consumption for the whole family. Users; these are the actual members of the family that consume or use a particular product or service (Struck, 2008). The maintainers; these are guys responsible for servicing the product so that it can be provided continuously for unending satisfaction (Kumar & Tyagi, 2004). Lastly, we have the disposers; these are individuals within the family who are responsible for terminating the use of a particular product within the family (Bluschke, 2011). As already observed, in the family there are two types of decisions i.e. the husband/wife dominated decision (autonomous decisions) and joint decision (equal/syncratic decisions). Accordingly, there is variation by stage in decision the decision making process; influencing spouses and resolving conflicts (Se-Joon & Lerch, 2002). Different tactics are usually employed by spouses in order to win or influence the partner to make a consumer decision. One partner may attempt use his/her expertise and knowledge with regard to a product or service to influence the other spouse in decision making (Se-Joon & Lerch, 2002). Accordingly, one partner may use his position in the family to influence the other partner to make a buying decision. Similarly, one partner can employ a bargaining tactic to win or secure influence now and exchange with the other spouse in the future. Consequently, a spouse can use rewards to influence the partner to support his/her decision. Emotions and impressions are also sometimes used by spouses to influence the behaviour of their partners. As already observed, the family is a sophisticated institution and the decision to purchase a computer will be influenced by many factors (Se-Joon & Lerch, 2002). Consequently, the decision making process will be evaluated by more than one person before the final decision is reached. The information about the computer it self will be subjected to analysis by the preparers, the deciders, the maintainers, and the disposers before the final buying decision is made. After the purchase of the computer it will be used by all the family members (Se-Joon & Lerch, 2002). The family is the basic social unity in the society and hence has major impact on the way its members behave and make decision with regard to different aspects of life. Products and services are firstly consumed in the family and in this regard, the family has substantial impact on the consumer decision making process (Se-Joon & Lerch, 2002). It is an entity that cannot be avoided and hence its impact in consumer decision making process is extremely important. Opinion Leaders Opinion leadership is basically the process whereby one individual (the opinion leader) informally influences the actions or attitudes of others or the opinion seekers or just the opinion recipients (Struck, 2008). Opinion leaders are individuals who are multitalented and in any given situation they have the capacity to exert personal influence (Struck, 2008). They use the word of mouth communication technique to influence others particularly when they seek information or advice from them. These individuals have massive influence and hence their impact on consumer behaviour can be outstanding. In this regard, they can negatively or positively influence customers towards a specific or variety of products or services (Struck, 2008). In the marketing, opinion leaders are those individuals who have used the product or services by themselves. It has been established that young consumers have a habit of taking the assistance of opinion leaders when making purchases. Conclusion Consumer decision making process is the process of selecting an action from two or more alternative choices. This process involves the need recognition, the pre-purchase search, evaluation of alternatives and finally choosing the most satisfying option (Kumar & Tyagi, 2004). This process is however influenced by both internal and external factors; the discussion above has extensively discussed various factors that affect the consumer decision making process. For instance, group behaviour, culture, sub-cultures, family, social class, and opinion leaders have been explained (Kumar & Tyagi, 2004). The values for held by a specific culture or sub-culture have substantial impact and influence on the consumer’s decision making process; for instance, each culture or subculture have a specific manner in which its members must behave and act and thus the consuming behaviour is also influenced. Social classes as explained above are mainly determined by education, occupation and income; members of each social class have a specific lifestyle and thus their consuming behaviour is distinct in every social class. The family, group behaviour and opinion leaders also have significant impact on the overall consumer decision making process. References Bluschke, N. (2011). Factors Influencing Consumers' Intention to Purchase Clothing Online, London: GRIN Verlag. Blythe, J. (2013). Consumer Behavior. SAGE Publications. New Delhi: SAGE Comegys, C., Hannula, M., & Vaisanen, J. (2009). Effects of Consumer Trust and Risk on Online Purchase, International Journal of Management, 295-308. 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