Internal Factors influencing Consumer Decision Making Process - Essay Example

Internal Factors influencing Consumer Decision Making Process (Insert Name) (Institution Affiliation) Everyday consumers in various parts of the world are with situations that require them to make purchase decisions. At some instances, these decisions are simple to make especially if they involve very little thought, but in some occasions, the consumers are faced with purchases that require prior knowledge and intensive thinking (Bettman, Johnson, & Payne, 1991). The factors that influence a consumer when making a decision can be categorized into two groups, that is, internal and external factors. This paper primarily focuses on the internal factors. Understanding consumer behaviour is the utmost way of determining the purchasing motives and frequency of given set of goods or services. One of the fundamental presumptions when studying consumer behaviour is the fact that individuals often purchase products not because of their main function but because of their subjectively perceived value (Stávková, Stejskal, & Toufarová, 2008). There are various consumer activities that may influence their decision making when it comes to purchasing. These activities include the conventional conception of consumption which is basically used for satisfaction of basic needs, consumption as an experience, consumption as an integration instrument and consumption as a game. Although there are a lot of valid factors that usually influence the consumer decision making process, this paper focuses on the influence of different Internal Factors on a consumer’s decision-making process for electric appliances various products and services including food, clothing, footwear and recreation expenditure. These factors can classified into four broad categories namely; personal, social, psychological and cultural factors which are sometimes termed as independent factors. The other factors that may affect the consumer in decision making may be regarded as situational factors. Personal factors are unique to each and every consumer and include aspects such as age, place of domicile, sex, personal preference, economic and occupational conditions, self-consciousness and personality among others. Psychological factors on the other hand include perception, knowledge and skills, motivation, awareness, lifestyle, position of responsibility, economic condition or wellbeing and class (Stávková, Stejskal, & Toufarová, 2008). Here, perception refers to ways in which a consumer adapts to reality and the process involved in selection, interpretation and processing of consumer data from the market place and makes them purposeful. Consumer personality is created by his or her behaviour and inner characteristics. It is the personal characteristics that influence the purchasing patterns of various individuals. However, it is very difficult to find a reliable connection between consumer behaviour and the individual personality. Consumer knowledge and skills are always connected to predestinate and learning of the consumption behavioural changes. Thus, to effect changes of consumer behaviour regarding particular concrete product or service, it is usually necessary to have adequate information regarding that particular subject (Furaiji, Łatuszyńska, & Wawrzyniak, 2012). The learning process can be done in various ways such as simple association between impulse and its reaction or use of complicated sets of rational activities. In addition, negative or positive feelings and knowledge usually influence the perception of the consumer and consequently their behaviour and the decision making process. Majority of consumers learn their consumption direction or trends through experience and interaction with other consumers. Consumer motive refers to the inner driving force that determines the route that the activities of the consumers take towards meeting the achievements or needs of the definite aim. Several motives plays a crucial role in every decision making process. However, studies have shown that motives only work at the subconscious level. The eventual changes in consumer positions are conditioned by the personality of the consumers and their style of life. Consumers generally do not accept information that is in conflict with their positions but they modify them to reach correspondence. One of the internal factors that influence the consumer decision making in the purchase of electric appliances is perception (Furaiji, Łatuszyńska, & Wawrzyniak, 2012). Generally, perception –refers to the process by which an individual receives, selects and interprets stimuli to form a meaningful and coherent picture of the specific products. It is believed that electric appliances manufactured by particular companies are ling lasting than others. The perceived risk is an important barrier for electric appliances who are considering whether to make a purchase (Kim, Ferrin, & Rao, 2008). Perceived risk in this case can be defined as the common belief of the consumers about the potential uncertain negative outcomes from the purchase of a given electric appliance. The perceived quality of a given electrical appliance also plays a critical role in influencing the consumer in making a purchasing decision (Yee & San, 2011). Majority of consumers are known to be very sensitive to quality of a product and usually go for the highest quality while making a purchase irrespective of the price. In order to make an informed decision based on the perceived quality, the consumers integrate the process by which knowledge is combined in evaluation of two or more alternative and select the one deemed to be of the highest quality. Furthermore, consumer perception of product value is central to all stages of the process of bringing products to markets, from design and manufacture to distribution and retail. The electrical appliances suppliers and dealers thus need to respect the consumer needs in order to attract more customers (Furaiji, Łatuszyńska, & Wawrzyniak, 2012). Since the market is increasingly becoming homogeneous and saturated with similar products which offer very little differentiation in terms of function and technology, the consumer decision making is shifting from being governed by intrinsic factors such as performance and pricing to being controlled by extrinsic factors which include brands and ethical behaviour. However, the consumer perception on the brand remains an important factor especially in electric appliances market where consumers are becoming extra careful as a result of the counterfeit products that have flooded the electronic market. The second major factor that influences the consumer decision in electric appliance purchase is the price. Satisfaction based pricing usually reduces customers perceptions of uncertainty through service guarantees and flat rate pricing. The economic status of the consumer comes into play here (Barber, & Dodd, 2009). Provided the functionality and the visual appearance is the same and other factors such as services and warranties are constant, many consumers are likely to select the electric appliances that are cheapest in the market. Majority of consumers does not pay much attention on the extrinsic factors as long as the product fits their price range and satisfies their perceived quality. In addition efficiency pricing always provides value by sharing the cost savings with customers that implemented as cost leader pricing to help in maintaining consumer loyalty. The perceived risk also plays a major role in the consumer decision making process and it is up to the manufacturers and suppliers to ensure that all the elements of risk associated with the purchasing decision are eliminated. Since electrical appliances are not purchased on a daily basis, they have a higher risk which can be broken down into various categories as follows (Furaiji, Łatuszyńska, & Wawrzyniak, 2012). First of all it’s the functionally risk; before a consumer decides on whether to purchase an electrical appliance, he or she evaluates its functional performance against his or her expectations. Secondly, the consumer examines the physical risks which the electrical appliance may pose to self or others. Third is the financial risk which is highly connected to the price. The consumer always fear whether the product will be worth its cost or not. Social risk also effects the consumer decision considerably especially where the poor choice of the product may result in social embarrassment. The other risk is psychological whereby in some instances, poor choice of electrical appliances may bruise the ego of the consumer. Last but not least is the time risk - there is usually risk that the time spent in search of an electrical appliance may be wasted if product does not perform as expected. Personality of the consumer also has a great influence on the decision making process in the purchase of electrical appliances. Personality is the unique, dynamic organisation of characteristics of a particular person, physical and psychological, which influence behaviour and responses to the social and physical environment. Of these characteristics, some will be entirely unique to the specific person and others will be shared with a few, many or all other people thus leading to different preferences and tastes. The type of personality has a lot to do in decision making especially regarding the purchasing of electrical appliances. This is due to the fact that it is hard to suppress various aspects of personality such as ego or superego, need for unique things and the ethical codes of ethics. Consumer dogmatism or the degree of rigidity displayed by the consumers towards the unfamiliar appliances is also determined by personality. Need and motivation is another key aspect that influences the consumer behaviour. Motivation which refers to a driving force within individuals that impels them to action is usually produced by a state of tension as a result of an unfulfilled need. One of the key personal motivator in making decision regarding the purchase of electrical appliances is the consumer’s perceived value of money. In the situation of having to make a quick purchase decision with little information early enough to save money, or waiting for more information and having to pay more for the product, the consumer faces a possibility of experiencing a situation of remorse of the buyer. It has also been proven that perceived benefit is a motivator that influences the consumer to make a purchase related decision. Electrical appliances are long lasting equipment which is not purchased on a daily basis. Thus a consumer may be motivated to purchase an appliance because they perceive various benefits such as cost savings, increased convenience, time savings, better guarantees and increased product variety to select from especially when a consumer has some unsatisfied needs (Chen & Hsieh, 2011). However, if the consumers have not developed an attitude towards a given brand of electrical appliances and are not motivated or able to establish their positions, they generally derive benefits from the decision making process based on other attributes of the given product. This enables them to compare every attribute separately before making an informed decision. The consumer behaviour regarding the purchase of food and majority of non-alcoholic drinks is a bit different from that of the electrical appliances. Food and drinks are commodities which are generally classified as basic needs that are required for everyday survival. This category of commodities represents one of the most important household expenditure in the budget of many individuals. The key factors that affect the purchasing decision of the consumer for this category of products include: necessity of need, quality of the products, former experience, their price and characteristics in that order, starting with the most important aspect. Other factors that can influence the consumer decision of these products are habit purchase, change of products quality or quantity and increase in the number of consumers. Furthermore, in making a decision regarding the purchase of food and non-alcoholic drinks, the consumer acknowledges the complex nature of the factors that are involved in determining the purchase such as the characteristic of the consumer s and external products. However, the internal characteristics such as quality, personality and price play a critical role (Erasmus, Boshoff, & Rousseau, 2010). Products such as tobacco and alcoholic drinks are lined among the non-essential goods whose entries on the consumer expenditure list are not significant (Chen & Hsieh, 2011). However, they share some factors which influence the consumer decision making process. Some of the factors which influence the purchasing decision include quality, price, product brand and the characteristics of the product. However, the consumers who are addicted to these substances may exhibit different purchasing traits since they are likely to be motivated by their addiction. Clothing and footwear are usually counted as normal goods and have a significant allocation in the household expenditure. In this category, the consumer decision is mainly influenced by the quality and design of the product, the product characteristic, necessity of need and the price (Stávková, Stejskal, & Toufarová, 2008). Finally, the purchasing decision of other products and services such as telecommunication and recreational services is mainly governed by the necessity need, quality, perception and price. In conclusion, due to the integration of the global market places and the development of the international focus by the consumer specialist, development of useful scales to profile the consumer decision making process has become more important (Darley, Blankson, & Luethge, 2010). As we have seen, the consumer perception, motivation and necessity of need plays a critical role in purchase decision making in various category of goods except for alcoholic drinks and tobacco. Furthermore, many consumers usually initiate the decision making process when they become aware of the imbalance between the actual and the desired state which creates an unsatisfied need. The recognition of this need happens when that consumer is faced with a problem. 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