Consumer Decision-making and External Factors - Case Study Example

Consumer Decision-making - External Factors Name Institution Consumer Decision-making - External Factors Introduction Research on consumer purchase decision has received great attention over the decade due to its importance to producers and retailers. Change in the business environment has transformed consumer purchase decision a great deal in the 21st century, owing to the globalization and technology advancement (Alden, Steenkamp & Batra, 2006, p.228). The consumers have become complex to deal with because they are more informed of product quality. In the process, companies have been forced to be very annotative and to provide quality products to remain competitive in the market. Smartphone is one of the products which everybody fancy due to its flexible function. Kenny & Pon (2011) argue Smartphone is no longer a device for only make and receive calls, voice mail and text messages, but also to browse the internet, take pictures, store and listen to videos and music and also access digital media. The continued innovation of Smartphone has significantly added to the consumer purchase decision. Therefore this essay discusses the influence of different ‘external factors’ on a consumer’s purchase decision-making process for Smartphone. Some of the factors to be focused on include the influences of reference groups, family, social class, cultural and sub-cultural aspects. Overview of Smartphone The fast increasing demand of the Smartphone has led to a new experience in the telephony industry. Today, mobile phone users prefer Smartphone over other phones. Liew (2012) contends that the growing innovation in the mobile phone sector has led to change of consumer taste and proffering. Currently, the Smartphone is installed by a powerful operating system which holds sophisticated computing connectivity and capabilities. In general, the Smartphone normally has a high sensor touch screen, a camera with high pixel and other applications and features (Weinberg, 2012). In most cases, Smartphone owners use applications such as the internet browsing, navigation, email, social media, reading news, weather forecast listening music, playing games, checking on financial, health and fitness issues, calendar and taking notes among others. Persaud & Azhar (2012, p.420) opined that these applications and features in the Smartphone change the people’s lives and have made it easier both at work, on a trip and at home. Consequently, the Smartphone market has improved over the years as the innovations continue increasing. This was witnessed in 2012 when the Smartphone users totaled 1.03 billion, representing an increase of 47 % from 2011 (Star (b), 2012). Increase in number of mobile phones and number of mobile users has been marked by the increase in the number of application. For instance, from 2009 to 2011, over 300,000 mobile applications were developed and sold. This net worth of the application was estimated to be worth $35 billion based on (Star (b), 2012). Some of the popular brand in Smartphone include Samsung, Apple, HTC, Sony, Motorola, Nokia and LG among others. Star (a) (2012) claims within these smartphones, Samsung Galaxy and iPhone from Apple Inc are ranked as the strongest brands. Reuters’ poll claims that in 2013, Samsung was the top brand after surpassing Apple in the global Smartphone industry. Consumer purchase decision-making process Some of the essential issues in the consumers’ purchase behavior are the manner in which they develop, adjust and apply their decision-making strategies to settle for a product (Santosh & Pandey, 2011, p.23). Consumer purchase decision-making is described as the patterns of behavior consumer’s experiences in order to determine product which will meet his or her expectations. Quester et al. (2014) posited that the process has five steps including recognition of the need, information search, alternative assessment, purchase decision and post-purchase behavior. All these processes within the steps are affected by external factors including reference groups, family, social status and culture. External factors influencing Consumer purchase Decision-making Process of Smartphone Reference groups Reference groups are people who have an important relevance on a consumer’s product assessment, behavior and aspirations (Blackwell et al., 2006). It can be argued that reference groups are that the consumers compare themselves with. Peers, friends and workmates are some of the reference groups. Today, most people buy smartphones to which can access the internet, can store play music and videos, and can take pictures when in trips and picnics (Chew, 2012). This is not all because there are smartphones now have capacity to store many documental in many formats. Chow (2011, p.45) argues that currently people belonging to a particular group who have a certain brand of Smartphone are likely to influence their peer in the group. Other group members will certainly ask one member who possesses a Smartphone what is good about the features and applications of the phone. The quality features of the Smartphone like a long lasting battery, large storage capacity and camera pixel are likely to attract the rest of the member to purchase the same brand. This form of group reference group can be termed contactual group (Quester et al., 2014). This is because they have a direct contact and communicate with each other quite often about the Smartphone brand. This kind of the reference group also uses the Smartphone as their self image and value expressive influence. Customers falling in this category tend to be loyal if the product is of high quality and can buy another sophisticated model of the same brand in the future (Liao & Wang, 2009, p.991). However, this form of influence extends from contactual reference groups to inspirational reference groups which entail opinion leaders. These are the celebrities who own a brand of Smartphone. For instance, Obama is known for his preference for BlackBerry phone (8300 Series) (Clifford, 2009). According to Clifford (2009), this was observed by marketing experts as "celebrity endorsement," and approximated as worth $25 to $50 million. Family Family is regarded as the most significant consumer consumption group in the world, while family members comprises of the most important primary reference set. Members of a family play particular roles in the process of making decisions about buying a Smartphone, which consists of the gathering of the information and knows on how and where to collect the information (Desai & Basuroy, 2005, p.210). In a family, which consists of couples with teenage children, the children may consider getting good guidance towards personal-ambition, self-worth and economics like purchasing affordable but high quality Smartphone from parents. Such control of character traits can be continuous and important. Even if the purchasers do not meet with their parents on a daily basis, one of the direct influences on every day buying behavior is the family of procreation like a spouse and children. For instance, Indians involvement in buying of products depends on the family orientation. In a family, the wife plays the role of buying goods (Desai & Basuroy, 2005, p.213). Currently the role of buying goods traditionally has changed. Marketers ensure that both women’s and men’s requirements as potential targets. In the modern population, every family member has a smart phone. The influence of the family is normally strong in on couple-only families. Quester et al. (2014) claims that this form of a family which appears as if the two are still dating, there is a big influence on each other from what they do and own. Such couples are likely to use the same brand of Smartphone (Liew, 2012). It makes them look as if they love everything about each other. The process can also be termed as a joint decision. For instance, when a male member of the family purchases an iPhone, the female member of the family is likely to demand the same brand. Also in families where a parent appears as role model, the members of that family, particularly children would want to buy something which is similar to what that parent owns (Ding et al. 2011, p.297). This can extend to model of the Smartphone the parent owns. This influence is based on the fact that the child feels the parent is always right in product choice and ideal taste and preferences. Also, there are situation where family likes to be identified with a particular image and self-value (Azad & Safaei, 2012, p.1235). In that case families like to buy identical products. From this perspective, all family members are likely own similar Smartphone. If it is Samsung Galaxy, every member of the family will probably own the same brand even if they are different models. Family with this behavior tends to be deeply loyal to a product and the manufacturing company. Social Status Blackwell et al. (2006) suggest that different stores and products are identified by customers as suitable for various social classes. Individuals who are working tend to assess goods in utilitarian terms like comfort or sturdiness instead of fashion or style. They are not so much into experimenting with new styles or products. Every person’s personality also affects the consumption behavior. Society is organized into strata where each member of the society belongs to a certain group namely, upper class, middle class and lower class (Quester et al. 2014). Upper class mainly consists of business elites who are wealthy, have high education and can afford what they want in life. Quester et al. (2014) continued to state that this group of people has high income and wants the best for themselves. For that reason, their social status normally influences them to have the best Smartphone in the market. This is to mean they would acquire expensive Smartphone with highly sophisticated features and application which they can use in business dealings like recording conversation, taking pictures of business trips and having business presentation templates. Liew (2012) affirmed that their social status makes them want the strongest brands of Smartphone in the market including Samsung Galaxy, iPhone and HTC. People who belong to high social status would want to identify with what other rich people own even surpass. The situation makes them change Smartphone model quite often. For instance, he would own iPhone 5S and when Apple makes a new model like iPhone 6 he would quickly acquire it. Their personality can be referred as a set of exceptional human psychological behaviors like autonomy, defensiveness, confidence and adaptability that results in continuous and regular reactions to external stimuli (Farzana, 2012, p.93). Since a brand has a personality, therefore it can be defined as an individual set of behavior that can be featured in a particular brand. Customers prefer to go with brands that imitate their own. Obviously, possessions like that would be on the public products rather than private products found in the market (Liew, 2012). Middle class on the other hand, consist of business people, professionals in the white collar jobs and blue collar jobs. Just as the name suggests they middle income. However, they may also have high and disposable income. Their income makes them try to compete with the upper class. According to Blackwell et al. (2006) this group saves money to buy expensive Smartphone almost with the same capability as that one which the upper class acquires. The middle class, however, can take a long period of time before acquiring a new model of Smartphone. The last group of the strata is the lower class and comprise of poorly educated people who are unskilled and socially disadvantaged (Blackwell et al., 2006). The lower class family tends to consume wisely and cautiously on goods and services in the market. This grow may not buy Smartphone due to their social status. They consider Smartphone a luxury so they would acquire basic needs such as food, clothing and shelter. Culture Culture has shared meanings, norms, traditions and rituals among group members. Desai & Basuroy (2005, p.207) claim that an individual’s culture determines the general precedence he or she joins to special products and activities. Also, it determines the failures and success of particular goods and services in the market. Desai & Basuroy (2005 maintained that product which offers desired benefits that makes the demands of a particular culture is likely to be accepted by the target market. Culture can be termed as a lifestyle that is passed from one to the other generation. Culture of a community has a little effect on purchases of a Smartphone. However, some regions are known to have a high lifestyle and preference for high-tech and luxurious products (Chow, 2011, p.46). The Western culture is known for taste and preference of high-tech products which encourage interaction like Smartphone does (Farnsworth & Austrin, 2010, p.17). The culture therefore influences the purchase of Smartphone brands. Smartphone enable people to interact with people around the world because allow access to the internet (Chew, 2012). It also enables the user to take pictures and share with people around the world. Culture is not still and globalization and technology has influenced other cultures around the world. The change of situation has made people across the globe to embrace communication and interaction culture over the internet. Smartphone provides this platform. Conclusion In the modern age, technology and globalization have strongly influenced consumer taste. The consumer now wants high-tech products which can enable them to communicate and interact with people around the world about business and lifestyle. The Smartphone provides this capability. 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