Consumer Behavior Decision Making Process - Coursework Example

Consumer Behavior Decision Making Process Name Student Number Name of the Unit Name of the Unit Coordinator Table of Contents Table of Contents 2 Executive Summary 3 Consumer Decision Making Process 4 Preview of Products/Services and Marketing Strategies 4 Motivation: Maslow’s Hierarchy and Trio of Needs 5 Big Five Personality Traits 7 Self-Concept: Ideal Self-Concept 8 Perception 9 Consumer Imagery 10 Learning: Behavioral and Cognitive Learning 12 Attitudes 13 Diffusion of Innovations Concept 15 Conclusion 16 References 16 Executive Summary In making decisions, customers follow five steps, which are need recognition, information search, and evaluation of alternatives, purchase and post purchase. Information and experiences can be first hand or sought from other avenues such as media. The paper has employed numerous products in discussing customer behavior and factors contributing to acquiring a product and or service. Different things motivate the customers, and Maslow’s Hierarchy and Trio of Needs elaborates on the idea of motivation. The big five personality traits shade light on the personality and integral components that shape the behavior and decision process of consumers. Other factors that are discussed include self-concept that complements the requirements of personality. Learning assists the customer with information used in making decisions. The learning process involves cognitive and behavioral learning, and the process of learning can either be low or high involvement. These different approaches are employed based on the expectations of the customers. The attitude and perspective of the customers or adoption of information dictate the speed in which a customer can acquire a product and use the product. Hence, numerous factors contribute to the decision-making process of a consumer. Consumer Decision Making Process In the consumer decision-making process, there are five steps that are involved. The steps are need recognition, information search evaluation of alternatives, purchase and post purchase. The need recognition is when a consumer becomes aware that he needs a product such as feeling the teeth are not clean (Solomon, Polegato & Zaichkowsky, 2009). The consumer then searches for information on teeth and toothpaste and review the numerous alternatives that exist. The information can be obtained from friends or even from the actual purchase at the store where sales persons can engage the consumer to change decisions when it comes to brands (Kim, Ferrin & Rao, 2008). The consumer then evaluates the alternatives that are provided based on the ingredients and arguments of differentiation (Zhou et al., 2010). The consumer decides to purchase and determines the best method to make the purchase or make payments. For example, the customer determines whether to use plastic money or cash. After purchasing the product, the consumer decides to use the product and reviews whether it fulfills the expectations or addresses the need recognition. Preview of Products/Services and Marketing Strategies Consumer decision-making process involves numerous factors and components that enable marketers to engage and to influence the thinking of consumers. For example, marketing strategy is aimed at ensuring the basic consumer requirements are understood and the product developed in a manner that encourages the consumers to acquire (Han, Hsu, & Lee, 2009). Different marketing strategies would be employed in discussing consumer behavior because different products and services will be included in the discussion. Furthermore, demographic and behavioral segmentation will be employed in understanding the internal processes in decision making in consumers. Marketers understand different products require unique selling points to engage the consumers and aspects such as targeting and positioning will be premised on the benefits and selling points of the products and services (Solomon, Polegato & Zaichkowsky, 2009). The approach is based on the numerous examples of products and services that would be employed in advancing the requirements of consumer behavior in making decisions (Kim, Ferrin & Rao, 2008). The internal components such as needs and motivation; personality and self-concept; consumer perception, consumer learning and involvement; and consumer attitude development and change (Young et al., 2010). Motivation: Maslow’s Hierarchy and Trio of Needs Motivation has been discussed extensively, and some of the theories that inform on motivation include Maslow’s hierarchy of needs and trio of needs. The Maslow’s hierarchy asserts that the lower requirements have to be addressed before fulfilling the higher requirements (Solomon, Polegato & Zaichkowsky, 2009). The theory is represented as a pyramid in which the basic needs that have to be fulfilled are at the broad level, and while the needs are fulfilled, the higher needs are then addressed. The theory has five stages, which are physiological, safety, love/belonging, esteem and self-actualization (Kim, Ferrin & Rao, 2008). For example, food is a basic need, it is physiological in nature, and this requirement has to be addressed before going to the second need of safety that may incorporate an aspect of security (Dennis et al., 2009). The lower need has to be fulfilled and, therefore, a consumer cannot seek a sense of belonging before the consumer acquires the physiological needs such as food. Hence, the consumer will acquire food before the need for belonging. The trio of needs incorporates three components: the need for power, affiliation and achievement (Kolstad & Chernew, 2009). Discussing each component differently shades light on consumer motivations. The power of need relates to control of various objects, other people and environment. It is an ego component and it is similar to Maslow’s self esteem component. The advertisement for Mercedes is an example in which ladies associates it certain characteristics and people driving the care are associated with these characteristics (Solomon, Polegato & Zaichkowsky, 2009). Therefore, an individual acquires the Mercedes with the aim of getting associated with the characteristic. The affiliation component implies the behavior of an individual is influenced by desires for belonging, acceptance and friendship (Yoon, Cole & Lee, 2009). The Coca-Cola advertisement “share a coke”, in which names are introduced to the labels makes people create the idea of sharing, which is a clear indication of affiliation. The achievement component can be understood through seeing the advertisements on Nike and its applicability in accomplishing numerous activities. Achievement regards personal; accomplishment as one of the component of achievement and people tend to capitalize on the component to advance their personal ego on achievement (Kim, Ferrin & Rao, 2008). Maslow’s hierarchy theory and Trio of needs discuss the forces that make a consumer purchase a product or service. The aspect of owning a component so that you are recognized creates the idea of need recognition. The consumer would acquire the product with the aim of being associated with something (Solomon, Polegato & Zaichkowsky, 2009). For example, owning a Mercedes-Benz is associated with certain characteristics, and since an individual wants to be associated with the characteristics, the individual will decide to acquire the product. However, the cost of purchasing and maintaining a Mercedes is high, a consumer will seek for an alternative product that has similar features or connotations to the Mercedes Benz but cheaper in both buying and maintenance. Hence, the consumer may decide to purchase a Ford or Nissan model that has similar features and attachments. Big Five Personality Traits The big five personality traits incorporate neuroticism, extroversion, agreeableness, conscientiousness and openness to experience. An individual with extraversion trait is outgoing and energetic (Dennis et al., 2009). The individual seeks stimulation and very talkative, and the individual is commonly found in social environments and participates in energetically based activities such as participating in the bike and car rides. The individual may be attributed to Nike shoes because of its ruggedness (Kim, Ferrin & Rao, 2008). An individual who has an openness to experience trait tends to participate or be associated with inventive activities, and the individual is frequently curious and wants to understand the reasons associated with happenings. It reflects the degree of preference, creativity and intellectual curiosity for variety and novelty. The individuals tend to seek additional information regarding and issue, and these people are those who are climbing mountains and participates in safari drives since they are curious. The individuals want to experience something, and the individuals tend to try new techniques and approaches to accomplish a task (Solomon, Polegato & Zaichkowsky, 2009). For example, if the individuals are after speed, the use fast cars such as Aston Martin car to fulfill an integral component and appreciate the art associated with the car. Conscientiousness individual aims for efficiency and organized nature of accomplishing things (Glimcher & Fehr, 2013). The individual will accomplish activities within time and tend to plan and do not appreciate spontaneous behaviors. The individual will register for education policy for their unborn children, and most of their activities are preplanned (Hamzaoui & Zahaf, 2008). The extraversion, conscientiousness, and openness to experience are some of the components that determine the products and services that a consumer can purchase. The personality trait informs on the likely products and the use of the products (Solomon, Polegato & Zaichkowsky, 2009). For example, an individual may purchase education policy because he plans for the future of his family while another individual can acquire a 4*4-wheel car drive to adventure. The targeting is possible through ensuring the educational policy is targeted to one segment while the 4*4 drive is targeted to the other segment. Moreover, other activities and services such as insurance policy can be framed in a manner that incorporates the different views from the customers. Hence, when a consumer search for information, the consumer seeks to accomplish an internal requirement and the way marketers develop and provide the messages determines the way consumers can purchase the product (Kim, Ferrin & Rao, 2008). The personality trait and information search complements each other and the different stakeholders should capitalize on the component in ensuring each fulfills their diverse aims. Self-Concept: Ideal Self-Concept Self-concept is the beliefs that an individual holds: how the individual evaluates the attributes/qualities. Numerous types of concepts exist, and the most common one is the ideal self-concept. The ideal self is premised on the conception of how individuals wish to look like (Solomon, Polegato & Zaichkowsky, 2009). The culture plays an important role in shaping an individual into becoming what they are expected to become (Dennis et al., 2009). Products and sometimes services are crucial ion contributing to an individual reaching the ideal self and can even improve the individual further. The advertisers use personalities and heroes as means of showing people that they can become more: they can achieve something superior (Kim, Ferrin & Rao, 2008). For example, cars and luxury products show that an individual can improve through self if they use the products. For instance, Nike has continuous advertised its products as rugged and people using the products can achieve something more. For example, the users can improve in their sporting activities, and succeed in their life (Dennis et al., 2009). Hence, a sportsperson may purchase the shoe and use the shoe to improve his capacity in the sporting activity. A person seeking for idealness will use the need that should be fulfilled in searching for information to determine whether the product fulfills their requirements (Solomon, Polegato & Zaichkowsky, 2009). The Nike Company sponsors and uses sports celebrities in marketing their products and sportspersons; for example, an athlete may purchase the product because of the available information. Furthermore, the company may design a message that engages the customers regarding the fulfillment of their personal expectations through the use of the product. Hence, it plays an important role when it comes to targeting. Perception Perception is a subjective approach in which consumers view a product or service (Dennis et al., 2009). Objective reality is based on person’s personal experiences, values, wants and need. Perception is shaped based on available information, and it is tricky to change perception; however, it is possible to change perception. Numerous forms of perception exist, and some of the perceptions include selective, organization and interpretation and influences the consumer differently (Solomon, Polegato & Zaichkowsky, 2009). Selective perception is when consumers want to avoid painful and unpleasant messages and seek those messages, which are pleasant, interesting and sympathetic. Products are reviewed, and the comments on some of the products are not interesting, but a consumer sometimes seeks to embrace the interesting aspects. The customer seeks the information that resonates with their expectations. For example, a car with a large engine capacity translates in the consumption of more fuel (Kim, Ferrin & Rao, 2008). The customer may not look at the impact on the environment but the power of the car. The perceptual organization is the way in which customers organize information into groups and perceive the information as unified wholes. Therefore, the customer can fill the blanks when searching for information on a given product (Dennis et al., 2009). For example, BMW is a manufacturer of cars and has numerous products. The brand is associated with efficiency and efficiencies, and if a customer sees a logo of the manufacturer on a product, the consumer fills the blanks and determines (perceptional) that the product is efficient and effective. Perceptual interpretation is based on the nature of the stimuli and other factors such as illumination and physical appearances (Dennis et al., 2009). It is also attributed to packaging because packaging of a product determines whether a customer can acquire the product and expectations. For example, a packaged candy bar can influence purchase when it comes to a child because of the decoration and another packaging that is attracted to the child. Hence, interpretation is crucial in ensuring customers make a decision regarding a product. The perception when it comes to a consumer influences the way information is searched and processed. Strategically taken advertisements and messages easily influence the decision making of a consumer (Solomon, Polegato & Zaichkowsky, 2009). The use of media and the branding including other packaging approaches creates a lasting perception. In addition, information gathered and previous experiences on the product form the basis of decision-making. However, a product that the customer viewed negatively may reduce the changes in which the consumer would purchase the product. Therefore, perception brings together numerous components in contributing to the decision-making process (Kim, Ferrin & Rao, 2008). Consumer Imagery Consumer imagery is the enduring images or perceptions of consumers and plays an important role in the consumer behavior study (Pickett-Baker & Ozaki, 2008). Brands and products have symbolic value for persons and are evaluated based on the consistency and reflection of self-images. The consumers can associate a given brand to a unique value; for example, persons driving Jaguar are associated with certain characteristics while persons driving Range Rovers are associated with having more money. Therefore, consumers associate products to its luxurious nature or influence of the brand to the society (Solomon, Polegato & Zaichkowsky, 2009). For example, a person driving a Range Rover is likely to be accorded or approached differently when compared to an individual driving a Toyota Prius. The consumer can base decisions on competitor based positioning such as the situation of Toyota vs. Range Rover. Competitor based positing seeks a specific categorically and creates products to fulfill that specific segment (Dennis et al., 2009). For example, Toyota and Range Rover produces 4*4 wheel models but the Ranger Rover product is targeted at the luxury market while the Toyota Landcruiser model is targeted at the adventurous market. Moreover, umbrella branding is employed by Toyota in the array of car models. The models bear the name Toyota, but the different models are targeted to fulfill the requirements of different market segments (Inman, Winer & Ferraro, 2009). Value based positioning is seeking an aspect that a consumer aims to benefit from the product. A company may charge a premium because of additional benefits associated with the product (Kim, Ferrin & Rao, 2008). For example, Range Rover attaches a value and a premium to the car models because of the luxurious additions to the product. Before a consumer acquires a product, the decisions usually are based on imagined. The customer usually visualizes a product and sees a product before acquiring (Solomon, Polegato & Zaichkowsky, 2009). For example, the needs determine the nature of products to addresses the requirements and form the basis of seeking for information regarding solutions to the needs. The marketers should create messages that reflect and states the benefits of the product. Moreover, the targeting process should contain messages that are aimed to fulfill a specific requirement. For example, Toyota produces expensive models and cheap models (Hawkins & Mothersbaugh, 2009). The expensive models should be marketed to persons who afford and cheaper models should be targeted to another segment but all the products carries the important brand value of durability, practicability and usability (Inman, Winer & Ferraro, 2009). Hence, a consumer can easily acquire the product based on their needs and requirements. Moreover, the marketers can use the information in creating messages towards engaging consumers to make purchases and retain their loyalty. Learning: Behavioral and Cognitive Learning Learning usually takes two forms: behavioral and cognitive learning. Behavioral learning focuses on changes that are associated with environmental experiences while cognitive learning is based on the role of thinking and memory. Cognitive focuses on internal characteristic while behavioral focuses on response to behaviors (Kim, Ferrin & Rao, 2008). Before a consumer makes a decision on purchasing a product or service, the consumer searches for information and sometimes uses information that exists in shaping their respective decision process. The learning process such as environmental source from friends and relatives shapes the decisions of the consumers (Inman, Winer & Ferraro, 2009). The negative and positive feedbacks determine whether a consumer can make a purchase or determine on an alternative approach. Information gather comes in different forms and comparison with alternative products in the market cement the acquired information. The information from numerous channels is brought together, and the customer thinks about the information and determines the most appropriate product to acquire (Solomon, Polegato & Zaichkowsky, 2009). For example, a customer can learn from previous experience that a product does not fulfill the requirements of their needs; the information usually stays in the mind of the consumers and uses the information to make future decisions. Moreover, the customer can associate a product with certain value and quality, and it usually influences the future decisions that the customer takes (Inman, Winer & Ferraro, 2009). For example, iPhone is marketed as a luxurious and quality product and any time a consumer sees an Apple product, the customer associates it with quality and high value. In learning and searching for information, the involvement may be high or low. Low involvement is when seeking for information on basic goods such as cooking oil and toothpaste. The cost of the product is cheap and consequences of acquiring the product are minimal (Solomon, Polegato & Zaichkowsky, 2009). On the other hand, high involvement is associated with luxurious and experience products such as Range Rover. It is a risk, and the customer has to work extra hard to gather all the information to reduce the influence of risks (Inman, Winer & Ferraro, 2009). The learning process and availability of information determine the way a consumer relates to the product. The use of the product cements the perception of the product from the perspective of the customer. For example, the behavioral learning is used to determine the product and the benefits associated with the product (Kim, Ferrin & Rao, 2008). The customer then acquires the product and uses the product to fulfill their varied requirements. After the use of the product, the customer determines whether the product accomplished and fulfilled their respective needs. It sticks to the memory as either an effective product or ineffective product. The satisfaction the customer receives determines the way the customer will market the product to other consumers: the customer can market either positively or negatively the product. It would also determine whether the customer would make repeat purchases. Attitudes Attitudes are both an advantage and obstacle to a marketer (Inman, Winer & Ferraro, 2009). The success of any campaign is premised on understanding the attitude of a consumer. Understanding the attitude of customers, the marketer can develop a message that resonates with the customers. The marketers should be able to differentiate behaviors, attitudes, and beliefs. Attitude is the general evaluation in which a customer uses to evaluate a product (Solomon, Polegato & Zaichkowsky, 2009). It is usually formed overtime. Attitude aims to fulfill the expectations of personal motive and also influences the buying behavior of a consumer. Attitude is formed overtime and persons surrounding the customer contribute to creating and advancing attitude towards a product (Wong & Yeh, 2009). If a customer has a positive attitude towards a product, the customer is better placed to acquire the product; if the customer has a negative view, the customer can employ any mechanism to prevent other people from acquiring the product through influencing. A single component of the product may inform when it comes to attitude and marketers should understand the reasons contributing to the customer’s attitudes. For example, if the customer had poor services, correcting the negative image should be the prerogative of the marketer before starting a new campaign (Kim, Ferrin & Rao, 2008). Attitudes determine the behavior of the consumer on seeking the information on a product, using the information to purchase a product, and evaluating the use of the product. A negative attitude presents a customer from purchasing a product, and the customer can present negative reviews concerning the product. On the other hand, a positive attitude allows the customer to acknowledge the product and presents their experiences to other customers (Solomon, Polegato & Zaichkowsky, 2009). The post-purchase stages define the future attitude of the customer. If the customer is satisfied with the product, the customer will try other products from the same brand because a positive attitude as been formed. Moreover, positive attitude shapes cognitive dissonance concept in which the customer is usually divided when it comes to the use of the product (Darley, Blankson & Luethge, 2010). Determining to purchase a product is one thing and determining whether the product will solve the needs is another thing. Hence, it is important for the company to provide information on how to improve the efficiency of the product and address any dissatisfaction (Inman, Winer & Ferraro, 2009). To address dissatisfaction, the companies provide return and other measures to address the problem (Wang & Benbasat, 2009). It is aimed at ensuring a positive attitude is created, which would shape the future purchases even if it were from the same brand. Diffusion of Innovations Concept The diffusion of innovations states that every market has customers’ groups that differ in willingness and readiness to adopt new products (Inman, Winer & Ferraro, 2009). In addition, the innovative product spreads through overlapping waves and successive waves and not in a straight course (Solomon, Polegato & Zaichkowsky, 2009). The adoption process follows stages, and the marketers should understand the component in ensuring the customers are engaged and encouraged to make purchases (Inman, Winer & Ferraro, 2009). For example, early adopters are different from early majority/late majority in the absorption of the product. The marketers should understand the position of the product about innovation and determine the type of messages. Moreover, it determines the appropriate target and how the messages are created to fulfill the expectations of that market (Kim, Ferrin & Rao, 2008). Products such as Mercedes Benz have been in the market for a long time, and customers have an understanding of the product. The customers expect additional development and improvement of the product and the customers are ready to spend to acquire the product. However, a completely new product becomes tricky to market because of lack of previous experiences (Solomon, Polegato & Zaichkowsky, 2009). Conclusion The behavior of the consumer is shaped by numerous components and factors. They differ from customer to customer but understanding these components is important in advancing the requirements of the customers. 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