Understanding the Consumer - Essay Example

ID: Introduction Finding why people purchase is a really complex task. The buyer’s thinking and processing is similar to the black box found on an airplane crash site and the buyer’s psyche can only be understood subjectively. According to the buyer decision process the consumer purchases products in a very rational way. Conventionally, it has been believed by marketers that consumer make rational choices after following through a sequence of stages such as problem realization, searching for information, comparative analysis of alternatives, finally comes buying of product followed by post-purchase analysis of the product which could or could not result in repeat sales. Although, this model might look applicable in the modern world however consumer behavior is far too complex to be predicted on the basis of one single model. The reason is that today consumers themselves are very diverse and so any one set of assumption cannot hold true for everybody. In the paragraphs ahead it will be discussed how things as simple as signing one’s name, the name a person has been given by his or her family and the culture one lives in can have an influence on purchase decisions. Consumer decision making process and online shopping Haubl & Trifts (2000) propose in their study on the impact of decision aids on online shopping and consumer decision process that interactive decision aids are made for helping customers online. These decision aids help during the initial display of products available online and they also help in detailed comparison between preferred substitutes which might have highly wanted characteristics with regards to consumer decision making. Such aids permit online shoppers to conveniently find products that have been over-priced or find products which have been dominated by competitors’ inferior products due to competitors spending excessively on online advertising. Consequently, market has become more economically efficient. Generally, the presence of interactive decision aids on e-commerce websites should improve the skill of customers to find products that correspond to their personal preferences and, consequently, result in considerable optimistic and good effects for consumers (Haubl & Trifts, 2000). Impulsive buying and culture An early study failed to differentiate among impulsive buying and unplanned buying (West, 1951) but it did describe both as the dissimilarity between actual procurement and procurement planned before. However, all procurements not planned beforehand are not impulsive ((Kollat & P.Willett, 1967; Stern, 1962). Instead, impulsive buying is comparatively more unprompted and spur-of-the moment (Inman,Winer, and Ferraro 2009; Rook 1987; Rook and Fisher 1995) than unplanned procurement, which comprises of procurement not planned beforehand (Stern 1962). Zhang, Winterich, and Mittal (2010) describe the link between impulsive buying and Power Distance Belief (PDB) (Zhang et al., 2010). The authors discuss in details the concept of power distance. Power distance can be defined as the amount of power or authority a group is willing to accept without being forced to do so. There are high power distance cultures and also low power distance cultures. Usually, in high PDB cultures people try to learn self-control which is needed for accepting authority. Such people are reluctant to act on impulses or emotions unless told by somebody in authority to act in a certain way. The reason behind learning and practicing self-control is that this is appreciated by others. Tibet is an example of a high PDB culture. On the other hand, low PDB cultures suggest that less attention should be given to authority or source of power and self-control is not as necessary as some people might think (Hofstede, 2001). For instance, students belonging to low-PDB cultures feel encouraged enough to start chatting randomly, stating their different opinions openly, and even going as far as disagreeing with their teachers if they think teachers are mistaken. Moreover, Lalwani, Shavitt, and Johnson (2006) discovered that people belonging to low-PDB cultures displayed much less socially desirable actions since they do not feel the need follow or exhibit self-control. Furthermore, Western cultures have low PDB have a tendency to consider the present more seriously than considering the future. In other words, placing a higher immediate satisfaction is valued more than postponed satisfaction (Chen et al., 2005). Eventually, people of high PDB cultures become so much capable of self-control and delaying gratification that they tend to engage in less impulsive buying compared with people from low PDB cultures. Moreover, this effect has proven to be true for vice products and less true for virtue products. Vice products are those products which are perceived to be harmful for society’s wellbeing and the individual’s health or behavior. For instance, wine is a vice product in eastern countries. Virtue products are the opposites of vice products. Example of virtue product is mineral water. Taken together, these results imply that products should be differentially positioned as vice or virtue products in accordance with consumers’ PDBs. This research provides many managerial and practical suggestions. Firstly, corporations targeting multicultural markets can utilize information about customers’ PDB to create suitable advertisements and promotions. For instance, in a country like Canada where a lot of Indians live with Westerners while targeting Indians universities ads can focus on the long-term benefits like higher chances of getting a job since the alumni comprises of the CEOs and HR heads throughout the world. On the other hand, while targeting westerners, university ads can focus on the facilities available on-campus such as state of the art gyms and cafeteria which serves diverse dishes. Secondly, it is vital for marketers to find how their brands are perceived. Are they perceived as virtue or vice products? For instance, cola can be perceived as a vice product while lemonade can be perceived as a virtue product. Once it has been found whether product or brand is virtue or vice products its sales could be varied. As mentioned before vice products are consumed more low PDB societies marketers can position a product as vice product to increase its sales in western countries. Axe is a good example of a vice product. In the same way sales of Cola can be increased in countries like Tibet by positioning cola as something whose consumption brings together friends and family for having fun. In this way cola is likely to become a virtue product and hence have higher sales in a high PDB culture. Lastly, impulsive buying of vice products like alcohol in low PDB cultures could be controlled by policy makers by designing messages which make the audience PDB to increase. Pre-shopping factors and unplanned buying (Bell et al., 2011) Some retailers think that most of the purchases are not planned. As a result, retailers spend a lot on in-store marketing for inducing unplanned purchases. Meanwhile, the impact of “pre-shopping” factors such as the buyers’ overall trip goals (a trip goal can be to get a soft drink or know more about products), retailing store-specific shopping aims, and previous promotional exposures remain considerably unexplored. The authors emphasize on such out-of-store factors. In other words, opportunities for retailers to have higher sales from unplanned buying have been found. It has been found that the extent of unplanned buying rises monotonically with the lack of concreteness of the goal of overall shopping trip. This goal is decided before the buyer steps inside the store. Moreover, store-linked goals can also affect unplanned purchasing. Unplanned purchasing is greater during trips in which the buyer selects the retail outlet for reasonable prices or interesting promotion and lesser during trips in which the buyer selects the retail outlet due to it being a multi-store shopping visit (Gijsbrechts et al., 2008). Unplanned purchasing is greater at retail outlets known for low pricing because it is a way of the shopper to justify why he/she went to such a store in the first place (Rook and Fisher 1995). Moreover, if a certain and specific attribute makes it convenient for a shopper to visit a store exists, then this causes 12% greater unplanned purchasing at that store (Bell et al., 2011). On the other hand, presence of common factor(s) (like distance from house of a market having multiple stores) that make it convenient to visit many stores decreases unplanned buying by 12% (Bell et al., 2011). As far as out-of-store marketing is concerned, although, it has no direct impact on unplanned shopping, it does promote the boost in unplanned purchasing from buyers who refer to the marketing materials such as pamphlets and signs on shelves given inside the store. The Last Name Effect (Carlson & Conard, 2011) Consumers cannot only decide if they need to buy an item but also they can decided when they have to buy an item. One study has connected the speed of buying items among adults to the alphabet with which their childhood surname begins. It was found that the earlier the first letter of an adult’s childhood surname is in the alphabetical order, the quicker the adult purchases products. This has been called the last name effect, and it has been suggested that this happens because in many countries people are called upon on the basis of alphabetical order. Since surname is often called out instead of the first name any child with a surname starting with an alphabet near the end of the alphabetical order is likely to be called out last. As a result, such children feel that they are often the last one to get access to any resource and hence they must hurry up in acquiring resources which others could use before they get the chance to do so. The study found that those people with late first alphabet names have a tendency to acquire a product when the offer is valid for a limited time. Such people find limited time offers very exciting and attractive compared with people whose names start with an earlier alphabet. The Signature Effect (Kettle & Haubl, 2011) Self- identity is the name given to a sense of who one is. People think of themselves as having or not having specific physical qualities, personality traits, and skills. Moreover, people also think that they belong to a certain social groups. Meanwhile, people tend to strongly link their signatures with self-identity. It has been shown that signing name has an impact on behavior which follows in a foreseeable manner. Signing name has an impact on a person’s responsiveness to identity related cues. Furthermore, the study suggests that sellers could make consumers sign something to influence consumer behavior For example, a retailer can ask buyers to sign names after finishing any survey or to become a participant of any prize draw, or to register in any customer loyalty program. Signing on such forms could result in customers who can relate to the retail outlet’s items to feel more engaged. Conversely, such signature-based interruptions must be used carefully since signing is inclined towards decreasing engagement in customers who cannot identify with the retail outlet’s items. For example, a musical instruments selling store specializing in premium quality guitars could take advantage from having professional and passionate guitarist sign but possibly be better off not seeking signatures from people who play guitar occasionally as a hobby or to seek appreciation and are looking for a reasonably priced guitar. Factors that affect consumer purchasing decision with regards to private level brands (C.V.Krishna, 2011) A study was done to find factors that affect consumer purchasing decision with regards to private level brands. The study was conducted, also with the intention of finding the impact of demographic factors like socioeconomic class customer belongs to and profession of the consumer demanding for private level brands. It was observed and found that four factors are the basic factors impacting consumer choices for private level brands. These factors are: 1. brand image; 2. sales; 3. advertised offers and 4. The design of retail outlet and its environment (welcoming, reserved, glamorous etc.). Durable goods and consumer behavior (Modi & Jhulka, 2012) The findings of this study vividly exhibit the various factors that influence the purchasing decision of a consumer. The study has concluded that that consumers buying cars is the result of logical thinking. Five factors which the consumer observe while buying a car are: 1 .family size and needs; 2. Fuel efficiency; 3. Price of the car; 4. Road safety and 5. Status symbol Marketers can utilize this combination of factors considered by consumers as to design promotional material and ads for selling their products. The study proves that the consumer think rationally and consider relevant factors while buying a durable good like car. Need for uniqueness in buyer decision making and reasons (Simonson & Nowlis, 2000). This study states that certain people want to look or be different. Such people do not fear criticism and this explains why they are not afraid to be different from others. These people are said to have a high Need for Uniqueness (NFU). To be different they buy unconventional products despite the availability of products which are rather standard or normal. The study found that people with high NFU are able to come up with different reasons for buying something without the fear of being criticized. The reasons they giver are frequently unconventional and such unconventional reasons result in unconventional purchase decisions. The reasons given by high NFU consumer appear and sound more convincing because of them being unique. Unique reasons are accepted by people more willingly due to their own ignorance of the world and the unique person coming across as somebody who is gifted and special. Furthermore, the study proves that not only unconventional reason lead to unconventional purchase decisions but the other way round is also true. Unconventional choices make others question the decision of the person with high NFU and so that person provides unconventional reason for selecting a product. Since such reasons sound persuasive these are accepted hence further reinforcing the tendency to buy unconventional products. Moreover, people with high NFU are less influenced by people around them and instead they themselves influence more people around them. Consequently, such people are not susceptible to promotional items, brochures, pamphlets and other forms of advertising. People with high NFU are also less risk aversive and so when they select risky things they justify selection on the basis of the phenomena that higher the risk is the higher is the potential return. The findings of Wilson and Schooler (1991) appear to agree with the finding of this research. Wilson and Schooler (1991) got the astounding result those students who prepared and thought about the reasons for choosing courses had a lower probability than a control group to select courses rated highly. This happened up to the extent of such students having a probability of selecting rather poorly rated courses. Replacing the “funnel” like model of buyer decisions process David Court and his coauthors suggested a novel method for knowing consumer behavior (Atsmon et al., 2012). A research comprising of 20,000 customers living across three continents and five industries it was proposed substituting the traditional model of buyer decision process, in which customers begin the purchasing process with few relevant brands in sight, before restricting their choices using rationality and finally purchasing a product. What the research found was a “consumer decision journey” which ascertained four precarious stages where marketers can be victorious or defeated. These four stages are: 1. Initial consideration: Customer decides he/she needs a product or service and some brands are recalled by him/her; 2. Active evaluation: customer finds and evaluates by asking friends or family, reading magazines or books and calculations possible purchases; 3. Closure: customer chooses a brand for purchasing; 4. Post-purchase: customer experiences what he or she selected and based on this decides whether to buy again or not. Conclusion Although, consumers usually purchase product or services on the basis of rationality, however, this is not always true. Unplanned buying and impulsive buying along with the influence of signing, NFU and/or the first letter of a name can possibly influence any purchase decision. Moreover, when it is about buying a durable good or a private level brand it is safe for marketers to assume that brand image, functional features of the product and marketing mix matter have a great influence on the purchasing decision. 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Power distance belief and impulsive buying. Journal of Marketing Research, XLVII, pp.945-54. Read More