Consumer Decision Making and Internal Factors - Case Study Example

Running Head: Consumer Decision Making - Internal Factors Name Institution Course Professor Date Internal Factors Influencing Consumer Decision Making Consumer Decision Making basically refers to the process by which a consumer identifies his or her need, collects relevant information, evaluates possible alternatives, and goes ahead to make a purchase decision basing on the information collected. According to Perreau, (2014), the actions taken by the customer or consumer for that matter, is highly dependent on various factors such as economic factors, and psychological factors. Environmental factors such as group, cultural, and social values also play a role in influencing the decisions made by a consumer. Getting to know your consumer decision making process is exceptionally valuable for all kind of businesses no matter how established a business is. Developing a successful marketing strategy that targets consumers is determined by how an individual understands the consumer decision making process. Consumers normally make a decision to buy something because they have a need. This is where marketing professionals should come in and make changes to their products or services in order to get the attention of the consumers. The job of the marketer is to make sure that an inactive problem is made active. The factors that in most cases affect the way consumers make decisions when they want to buy something are factors that they cannot control but play a major role in affecting decision making process; such factors have direct or indirect impact on how people live and how they consume (Perreau, (2014). A consumer is the main cause and purpose of all the marketing and production activities. Consumer behavior is basically the examination of when, how, why, and where consumers do or do not purchase a product. According to Wright, (2006), the study of consumer behavior is based on the consumer buying behavior, with the customer playing the 3 distinct roles of buyer, user, and payer. Research has shown that those successful companies existing around the globe had a better understanding of the entire process of consumer decision making. Experts in field face challenging situations because consumer behavior is quite difficult to predict. Factors Influencing Consumer Behavior Physiological factors – basic needs Cultural factors – beliefs, values, arts Personal factors – age, personality, lifestyle Economic factors – disposable income, consumer credit, size of the family, propensity to consume Social factors – groups, status and roles, family Every single day, people are overwhelmed with decisions, small and big. Getting to know how different people make their choices is a field of cognitive psychology that has made experts to divert their attention in that direction. There are quite a number of theories that have been developed to try give an explanation of the way people make their choices when in need to make a purchase and what kind of factors play a role in their decision making process in the present and future (Wright, 2006). According to Wright, (2006), quite a number of factors play a role in consumer decision making process and they comprise of past experience, cognitive biases, age and individual differences, belief in personal relevance, and an intensification of commitment, affect the way consumers make their decisions. Therefore, getting to know the factors that play a role in decision making process is crucial especially in the process of trying to understand what decisions are likely to be made. Heuristics plays a role of being a framework where satisfactory decisions are made swiftly and with ease. There are a number of heuristics that have been developed to explain the process of consumer decision making. Internal Influences of Consumer Decision Making Internal factors are the most challenging factors that every consumer fight with in order to come up with the right choice. Making a decision to purchase a particular product is a process that has been seen to play a very important role. Internal factors needs to be understood prior to making a solid decision and the only to understand internal factors is by developing a positive attitude to learn and to know exactly what an individual wants. Perceptual Filter The term perceptual basically refers to the way the human beings see themselves and the world they live in. Nevertheless, in the end what is being stored inside a human being is not always what will get there in a direct way. Often the mental makeup of an individual is an outcome of information that has been subconsciously or consciously filtered as an individual experience it, a process that experts refer to as a perceptual filter. People consider this as their reality, even though it does not really mean that it is a precise reflection on what is truly real. This therefore means that, perception is a means in which people use to filter their stimuli, for instance, reading a newspaper, or even someone talking to another person and then making sense out of it. Various steps of perception Awareness – this basically refers to the process of assigning value to a stimuli, for instance, humorous ad for a specific product Attention – this refers to the effort one puts in to recognize the type of a stimuli, for example distinguishing it as an ad Retention – this refers to the process of adding value to an internal makeup of an individual, for instance a product has entertaining ads How the perception steps are carried out in the end majorly rely on the approach a person chooses when learning. By learning, it basically refers to the way an individual changes what s/he already knows, which also may influence how that person acts. Various theories of learning exist and different people have unique ways to learning. There are people who might focus strongly on a specific advertisement and manage to recall a particular information after only having a one-time exposure to that particular advertisement while there are other people who might not even grasp important information of a given advertisement even after being exposed to it several times. It therefore means, a consumer have a tendency of recalling information of a particular product or service if he or she had a very strong interest in the stimuli. The same thing happens to person who wants to buy, let’s say a new motor vehicle, such an individual is more likely to divert his or her attention to new advertisements for motor vehicles while a person who is not in need of a motor vehicle might see advertisements for new motor vehicles several times before even recognizing the brand of motor vehicle. Marketing implications Research shows that a lot of marketers spend huge sums of money in the process of trying to ensure that consumers buy or develop a positive impression of their services or products (Perreau, (2014). But it is very clear that, the existence of perceptual filter is a suggestion that it is not that easy to get to that phase of winning the consumers attention to a given product or service. The most challenging thing that marketers face is to expose the consumers to a specific service or product because of the amount of competing product or service adverts that are most likely to accomplish a similar objective. That’s a time that marketers need to be very creative in terms of coming up with ways of making their services or products unique so that the consumers can get attracted to the product; it has to leave a lasting impression. According to Wright, (2006), the moment the advertisement gets to the consumer, it should be interesting enough so that it can capture the attention of the consumer. Talking about the benefits that comes with the product or service is best way that marketers must consider when aiming at the attention of the consumers. Advertising a product or service is not enough to drive a consumer to purchase a given product hence the need for marketer to be very creative. Marketers consider the phase that occurs with awareness to be the most important step. For a marketer, being continually monitoring and responding if his or her advertisement gets distorted in a way that might bring negative impact to the product or service, is the best thing that marketers should consider if they want to influence the consumer decision making for their own benefit. In most cases, such a situation occurs because of the competition with other marketers aiming to achieve the same goal by advertising similar services or products. Finally, being able to make the consumer give a positive response about a particular product or service requires the marketer to make sure that a consumer clearly understands the benefits of that product or service. Knowledge Knowledge refers to the sum of all the information that is known by a particular person. It is the actualities of the world as it is known by the human being and the depth of knowledge plays a very important role in the life of a human being as it influences the decision made by a particular individual. According to Perreau, (2014), the more knowledgeable an individual is, the wiser decisions he or she makes. In terms of consumer decision making, knowledge concerning a particular product or service is the key reason of purchasing that product or not. It therefore means that, if an individual knows more information about a given service or product, then that individual is more likely to pay for that service or product. Researchers found out that being knowledgeable has assisted most of the consumers to choose products more wisely hence giving the marketers a more challenging task in coming up with ways of getting the attention of the consumer. Consumers that have had exposure to information in most cases take time to do a thorough research concerning a particular product or service prior to deciding to get it. It is during such times that consumers try to find out the benefits of the product or service being advertised. According to Wright, (2006), knowledgeable consumers do not become the victims of getting counterfeited products because of the research they carry out before they actually decide to get the product. Perreau, (2014), on the other hand say that’s, if a consumer does not know much about a given product then the chances of such consumers being victims of counterfeit products existing in the market is very high. It therefore makes sense when someone says that, knowledge is power especially when it comes to the consumer decision making process. It is an internal factor that has a great influence in the way consumers make decision on daily basis. Before a knowledgeable person makes a move, he or she inquires on the benefits of a product or service and whether that product has any effects (Perreau, (2014). Marketing Implication A research carried out by (Perreau, 2014), has shown that marketers have a habit of conducting a thorough research concerning the level of knowledge the consumers have regarding their products or services. Therefore, this is a clear indication that the marketers are worried about the response they will get from the consumers. Knowledge has played a role in the way marketers design and advertise their products because of the fear that they might not get the attention of the consumers. That is the reason why marketers in most cases come up with ways of ensuring that consumers buy their products and such ways include the introduction of incentives as this encourages consumers to accept to purchase certain products. According to Wright, (2006), knowledge to researchers, is the key point that has played a big role in the consumer decision making process. This means, if people had the same level of knowledge, then then the quality level of products being produced and the services being provided would have been of high standards on the entire globe. Knowledge has both negative and positive impact on the consumer decision making process, in that the consumers might think that they know as much information about a given product but in the real sense they are falling for a counterfeited product. Attitude In simple terms the term attitude basically refers to what an individual feels or believes about a particular scenario that affects that person directly or indirectly. Furthermore, attitude might be shown in the way a person acts based on various things such as his or her beliefs. According to Wright, (2006), once developed, attitudes can be very challenging to get rid of completely or to change. This therefore, makes that this kind of internal factor has a very strong role in the way consumers make decisions on what they should and what they should not. Therefore, if a consumer has developed a negative attitude toward a particular product or service then, it will take a considerable effort to persuade the consumer to change what he or she believes to be true. According to Perreau, (2014), the time that it will take to change what the consumer believes in requires the people concerned to develop a proper approach that will not only change the attitude of a given consumer towards a specific product or service, but it should also leave an impression that will last for a very long time. Attitude in the consumer decision making process can make a product or service to either become popular or not, but that depends on how the marketers advertised the product or service when it first came into the market. Attitude is like part of the life of an individual, and whether it is a positive or negative attitude, dealers must have a very good reason of wanting the consumers to change their attitude towards a given product or service. Marketing Implications Dealers handling issues related to consumer decision making process, especially when it involves consumers who have negative attitude towards specific products or services have to put in more effort in order to identify the main concerns shaping the attitude of the consumers. They need to make sure that they adjust marketing decisions and strategies such as making use of advertisements in an effort to change the way the consumers believe concerning a particular service or a product. The companies have found themselves competing against very strong and established rivals in the market normally try to find out why the consumers love products or services being provided by such companies. They carry out research in order to know why certain consumers exhibit a positive attitude towards services of a given company. An important approach is to try to understand the reason why customers feel positive towards the product or services of a specific competitor and then improve the quality to meet or beat the competitor. Alternatively, a corporation can also try to pinpoint customers who feel negatively toward the services or products from specific competitor and then increase awareness among this group (Perreau, 2014). Therefore, attitude being an internal factor, plays a very big role in changing how consumer decision making process is carried out by the consumers. Attitude therefore is a very important factor in the consumer decision making process. Personality According to Wright, (2006), the personality of and individual directly relates to the apparent personal features that are being reliably showed, especially when a person acts in the presence of a particular group. In most, but not all, cases the activities one projects in a state is quite similar to the deeds a person displays in different condition. Therefore, personality refers to the sum of sensory experiences people get from experiencing how an individual talks, or reacts. Even though the personality of an individual is interpreted by the people he or she interacts with most of the time, an individual has his or her own version and vision of their character which is called self-concept and this in most cases is not the way other people see that individual. Different people have different personalities and personality influences consumer decision making process in different ways. According to Perreau, (2014), personality influence on consumer decision making process does not portray how a person makes decisions. Therefore, to understand how personality influences consumer decision making, marketers in most cases try to advertise specific products in a way that depicts their characteristics. It could be very challenging for the marketers to try understand the personality of each and every consumer. As much logic an individual puts into his or her decision making, his or her personality will always have a role to play in how he or she makes purchasing decision. Combined with experience and maturity, one’s personality is an inevitable factor, but proactive self-awareness can assist a person weigh much his or her consumer decision making process is affected by his or her individuality. The fascinating thing about consumer decision making is that it depends on the interest of the person making the purchase decision. A person should be in a position to understand his or her personality prior to making any purchase decision. Marketing Implications For dealers it is vital to know that customers make purchase decisions that support their self-concept. The use of research methods to recognize how clienteles view themselves might give dealers insight into merchandises and promotion options that are not voluntarily deceptive. For instance, when investigative consumers a dealer might build a marketing strategy around certain obvious clues to consumption actions, such as demographic indicators of the consumer, for instance, age, income and occupation. However, in-depth research that has been carried out by researchers portray that most of the consumers make a purchase only to fulfill their own personal interests. Some other information that have been obtained through research is that consumers also make purchase decision basing on the other issues that are not related to demographic factors such as adults deciding to purchase things that make them feel young. Appealing to the self-concept needs of the consumer could expand the market to which the service or product is targeted. Lifestyle This internal consumer decision making process factor relates to the way the human being live through the day in day out activities that they engage in and different interests they always express. In simple terms, lifestyle is refers to basically what mankind values out of life. Lifestyle is frequently determined by how a person spends his or her time and also money. Lifestyle happens to be one of the internal consumer decision making process that a huge impact on how people make purchase decisions. According to Wright, (2006), lifestyle have always brought a difference in how people do shopping on daily basis. Different classes of people exist, for instance poor, middle class and the rich. The way these people see consumer decision making process is totally different. Marketing Implications According to Perreau, (2014), all consumers’ decide to purchase certain products and services to support the kind of lifestyles they are living. Dealers have always worked very hard in carrying out research concerning how buyers especially in the markets they are targeting live their lives because such information is very important in suggesting promotional strategies, developing products, and even determining the best method that can be used to distribute products or even how to best can services be provided. Lifestyle has been seen one of the internal consumer decision making process factor that plays a major role in the decisions of the consumer. Motivation In simple terms, motivation basically refers to the desire of an individual to attain a certain result. Most of the internal factors that have been discussed on this paper have the same end result; to influence how a consumer desires to attain a certain product. There are a lot of factors related to motivation that plays a major role in influencing how a person makes his or her purchase decision making (Perreau, (2014). For instance, an individual could be asking him/herself if s/he can afford to purchase a particular product (financial position), issues such as whether there is a need to get the product quickly (time constrains), whether a person is getting a product worth his or her money (overall value), and what will happen is an individual makes a wrong choice (perceived risk). Marketing Implications Inspiration is also narrowly tied to the concept of “Involvement”, which in turn relates to how much energy a person will put in when making a purchase decision. According to Wright, (2006), those consumers who are highly motivated are expected to get physically and mentally involved in the purchase decision process. It is true that, not all products or services have a high percentage of extremely involved clienteles for instance “milk” but dealers who advertise products and services that might lead to the need of high level of buyer participation must come up with other options that such group will find attractive. In other words, it is very important for consumers to find ways of making it easy for customers to learn about their services or product, for instance the use of information on website and also free video preview. Also for certain products or services, marketers ought to allow consumers to experience the product for example providing free trial before the consumer decides to purchase the product. Conclusion Internal consumer decision making process factors play a bigger role in influencing the decisions being made by the consumers. The factors discussed have also played a role in the production of various products. Consumers should therefore try as much as possible to understand the internal factors before deciding to make a purchase. Even though such factors help in making the right purchase decisions they might also lead to the wrong direction. Consumer decision making process might be quite challenging especially when consumers are not aware on how the purchase decisions are made. References Perreau, F. (2014). The 4 Factors influencing Consumer behavior. Wright, R. (2006). Consumer Behaviour. Bedford Row London: Thomson Learning Read More