Consumer Decision Process - Essay Example

___________ ____________ ____May 2006 Consumer Decision Process Introduction Consumer buying behavior essentially refers to the buyingbehavior of final consumers - generally stated to include all categories individuals & households - who buy goods and services for personal consumption. These final consumers add up to form the consumer market. The most popular theme for marketeers' remains as to how consumers respond to various marketing efforts. This is raised as a theme as an analysis of this often results in substantial upgrading of marketing efforts and improved sales. A core analysis, with in this, is comprehending consumer decision process leading to a purchase. It is generally stated axiomatically that consumers purchase products and services in an attempt to assemble the maximum amount of satisfaction or utility for their felt needs or motives (drives). What constitutes and contributes to utility and how the consumer goes about maximizing it, using his environment, is the main issue in consumer decision process. Consumer decision process is complex and is affected by several factors. In this paper the factors affecting consumer decision process are examined with the help of an actual purchase situation of a vacation and well supplanted with theoretical support. Grounding Theory There is a five step process in the consumer buying process: need recognition, information search, alternative evaluation, purchase decision, and post purchase evaluation. Consumers can go through three types of decision-making. The first is routine decision-making which is used when the purchase is simple, inexpensive, and familiar. Another is called limited decision-making. The consumer uses this type when decision-making involves a moderate search and purchasing effort. The final decision-making process is referred to as extensive and is used when the product is unfamiliar or very significant to consumers. Consumers may search for brand and outlets in combinations (Hawkins et.al, 1983). Most consumers are influenced by various groups in the decision-making buying process. Consumer choices are nested and interlocked across the assorted contexts of daily life (e.g., First and Dholakia 1982; Huffman, Ratneshwar, and Mick 2000).We examine these contexts in following paragraphs. Demographic Influences Demographic and economic descriptors of a market are often helpful but insufficient to explain what is purchased by consumers. They provide us with directional indicators of the total quantity purchased by variously categorized consumers but they are unable to pinpoint the specific choices of the consumers and what factors determined such choices. These factors can reveal little about the individual assortment of products purchased, brand choice, brand switching etc. Typical examples of such factors are agewise, income wise, region wise, brand wise sales or purchase data. Such data can provide broad leads for future marketing efforts. The marketing efforts however can only be truly guided by deeper analysis of other factors as discussed below. Motivation In consumer motivation there are essentially two views. First view holds the Freudian position that forces shaping people's behavior are largely unconscious. People may be unwilling, or unable to reveal or identify what is motivating them. In such cases identification of motivating factors becomes arduous. They have to be conjectured with the help of patterns of consumer behavior to given stimuli-often in controlled conditions. It has to be supplanted by additional efforts in indirect structured searching. Second view is attributed to the development of Maslow's need hierarchy. This view states that consumers are driven to satisfy certain needs at particular times and these needs can be arranged in a hierarchical pattern. According to Maslow's hierarchy of needs, there are five categories of needs viz. (1) physiological, (2) safety, (3) social, (4) esteem, and (5) self-actualization. They form a pyramid structure with the lowest and broadest physiological need at the base. Pyramid also illustrates the fact that breadth of needs, as we graduate up the pyramid, gets reduced also indicating that the needs get finely tuned. In order to have fully motivated consumers each lower level needs to be satisfied before one can graduate to higher level needs. Maslow made a supplementary hypothesis that physiological, safety, social, and esteem needs on satisfaction, cease to motivate, while the self-actualization need motivated an individual more as they got satisfied. Maslow's premise was that it is the growth choice that propels an individual toward self-actualization - that of individual growth or "filling one's potential."(Maslow, 1954). When parents choose for their children - from the purchase of toys and games...they are building on the motivations and attitudes that children will take to adult consumption, and pass to their children (Cross 2002; Moore and Wilkie, 2005). In order to analyze consumer decision process marketers should be able to correctly place consumers in appropriate need category and direct marketing efforts accordingly. Learning Learning theory concentrates on various drives which are essentially aroused needs or motives. These drives cause consumers to go in for actions to reduce the level of these drives. Actions, in turn, can be shaped by cues which help consumers to direct actions in certain directions. A successfully executed action(s) leads to consumer satisfaction. and are reinforced for future. Cues, in fact, are collected information and experiences by consumers. Learning refers to changes in an individual's thought processes and behavior caused by information and experience. The learning process is strongly influenced by the consequences of an individual's behavior; behaviors with satisfying results tend to be repeated. Inexperienced buyers use different types of information than do experienced shoppers familiar with the product and purchase situation. Consumers learn about products directly by experiencing them or indirectly through information from salespeople, friends, relatives, and advertisements. Though information collection may follow a hierarchy of effects (HOE) (Farris and Quelch, 1987). Culture and Sub cultural Influences Culture is a basic determinant of a person's wants, behavior, values, and perceptions. Subculture refers to groups of people with shared value systems based on common life experiences for instance one can have Hispanic Consumers, African American Consumers, Asian American Consumers, Mature Consumers, youth consumers etc.Each of this categorization can have its distinct preferences as consumers and can approach consumer decisions in the same way as their group members do. Innovation or deviation is normally disapproved. A thorough understanding of such factors can help marketeer achieve substantial sales. Social class essentially reflect consumers layered according to occupations, incomes, education levels and wealth. People within a social class tend to exhibit similar buying behavior. Influence of social factors on consumer behavior takes place through groups. In particular reference groups serve as direct or indirect points of comparison for a person before he goes in for a purchase decision. There is a subscribed membership of these reference groups with preset qualifying criteria. There can be membership in two levels of groups. One, is primary group membership where members' interactions are regular e.g. family,school,work etc.Second relates to secondary group where members interactions are fewer than in primary groups. Examples of secondary groupings can be religious or political groupings. A correct placement of a consumer in appropriate grouping can reveal a great deal about his decision making process. For example we have references to luxury goods segment in almost all offerings in the market. These offerings are directed at social grouping of wealthy consumers. Other socio-cultural groupings can be aspirational groupings where consumers aspire to belong to a better group, better per se or perceived to be so; disassociative groupings are those whose membership is avoided rather than being sought. Generally social factors manifest in the form of varied roles and statuses. These arise as consumers participate in varied groups. In order to function in an orderly fashion, each group assigns certain roles to its members. Each role carries an attached status.Consumtion behavior is most affected by such roles and statuses as many consumption items can symbolize such roles and statuses. Opinion leaders are also important in group dynamics as they help formulate consensus. Analysis of consumer decision making process can be simplified substantially if status, roles and opinion leaders are identified as these help explain not only consumer choices made in the past but also predict future consumer choice patterns. Family Group Influences Amongst the most important factors determining consumer decision process perhaps the social grouping of a family has an all pervasive influence. Two familial concepts are important in this respect-one that of a family of orientation and the other that of a family of procreation. In most cases both tend to be same; however a distinction is being made as increasingly in breaking nuclear family structures the two distinctions are emerging. Family of orientation is the one an individual is brought up in and socialized by. This is considered primarily responsible for the formation of the super-ego. Family of procreation is the primary buying unit studied in consumer behavior. Consumer decision making -either made on stand alone basis or for the family as a whole- is nevertheless determined by the family as one entity. Degrees of influence may vary according to the type of decision being made. Primary reason for this is the fact that a nuclear family tends to be the basic socio-economic unit in all cultures (barring a few) and all economic resources required for consumer decisions are concentrated in a few hands within family. However because of blood relations consumption patterns of all members are protected by the family income and wealth. Therefore it is usual for family members not only to segregate individual decisions from group decisions but also to ensure participation in all decisions -whether individual or group. It may be observed that a lot of affective and emotional inputs are used in all family decisions and approach decision making process from a rational perspective as cognitive (i.e., problem-solving) and, to some but a lesser degree, emotional( Leon and Kanuk,1997). Hence involvement becomes intense and threadbare. Protecting or enhancing family's social status in primary and secondary social groupings often becomes the major objective of almost all consumer decision making process. Reference Case Study The under noted information was gathered from a typical vacationer family, during face to face interviews, who had recently taken a decision to vacation in Switzerland. The responses, gathered from family members, have been knitted in the form of a narrative with inputs of additional information gathered on social, employment, religious and economic background of the consuming family. The interview questions also probed the motives and motivations of the consuming family. An infrequent traveler, Mr. Joseph Kerr, was a typically orthodox Christian settled in southern London. He had been a trade master in housing estates for as long as he could remember. His job involved attending to plumbing and air conditioning calls in the three estates coming with in the control of Sterling Realties. The job was so technical and involved that he kept busy through out the day. A break was indeed needed by him and his family. The last family vacation they had taken was about 5 years back to Italy.Mr.Kerr had a large family comprising of four kids, a spouse and a dependent mother just like a typical orthodox family. The family had exerted initiating pressures on him to open the possibility of a vacation together. It was dinner table diplomacy that had slowly prepared Mr. Kerr to the need of vacation. The family was particularly clear about the length and place of vacation. They had drawn the road map as far as the length of the vacation was concerned based upon their last vacation and the trend seen amongst their neighbors-social surroundings. It was usual for families in neighborhood to discuss lengths of vacations at church meetings and other social occasions. In fact the larger the length the more it was considered to be a socially appropriate. If the length was less than trend then usual comments that 'such and such was a penny pincher and he did not even know how to enjoy vacations' were thrown.15 days was the trend and in order to add a bonus to their social status Kerr family decided to have a 20 days long vacation. While family influenced length it was Mr. Kerr who influenced the choice of destination. About 5 of his work-colleague families had vacationed in Switzerland for average duration of 15 days. Having a vacation in Switzerland was now considered the 'in thing' in traders' group. It was interesting to note that Mr. Kerr and his group were copying the trend from their boss supervisors. Their bosses had frequented last year to Switzerland and had spread stories about several stop-overs.These had turned into a fat story book which everyone now wished to emulate. So the moment his eldest son suggested at dinner table that his school had asked them to compile a project on watch industry in Switzerland and that a visit to that country would be helpful, Mr. Kerr readily agreed to help and finalized Switzerland as a destination. His second son was a hiking enthusiast and he supported the idea of Switzerland as a vacation destination. His wife was an invitee in his office parties and was in the know of the special status being attached to Switzerland in Sterling Realties. She was all for defending their social standing in such parties with other discussing spouses. Thus Switzerland was decided as a final destination. Lone dissenting voice was his 72 years old mother who wanted a repeat of Rome and its churches. She was persuaded with the fact that Switzerland also had plenty of churches and she would get almost one at each destination. What convinced her more was the argument regarding peaceful 20 days in the lap of nature.Mr.Kerr had a secret personal ambition which had gathered momentum over the years. He had a felt professional need to study plumbing and conditioning systems used in Swiss Villas. This, he thought, had escaped most of his colleagues when they had vacationed in Switzerland. He secretly planned to spend vacation time in studying these systems in Swiss villas. On return, he wanted to use such additional knowledge to his advantage in work situations and eye a promotion or two. His own motives as a paying consumer decision maker were crystallized by this fact. His motivation for taking up the vacation were thus built not only on a keen desire to unwind family with holiday comfort and social status maintenance but also strictly personal and professional motives, as above. Thus all factors taken together, viz.the group peer pressure, family compulsions, religious and orthodox considerations, social status maintenance worries, personal motives etc, the felt need for a vacation was translated into a want with finalization of vacation destination and approval of his leave of absence at Sterling Realties.Mr.Kerr had been secretly setting aside 2000 pounds a year, as against 1000 pounds that he had done in past, in anticipation of the impending present vacation. He now had a tidy sum of around 13000 pounds for the vacation and knew that it was more than adequate for a 20 days stay for his family. Thus his felt need was formed into a want and want was about to culminate into a consumer decision backed by more than adequate purchasing power. A squabble broke out amongst family members on the choice of air carriers and hotels to stay in. His two younger sons and wife, being true nationalists, were in favor of choosing expensive British Airways while his mother, Mr. Kerr himself and his eldest son had distinct preference for some foreign airlines that had cheaper round tickets. The latter group hoped to utilize the thus saved money for their own specific purposes while on vacation whereas the former group had a limited agenda. Ultimately economy argument prevailed as it had the backing of the paying consumer decision maker viz.Mr.Kerr. Regarding choice of motels in Switzerland his mother had a distinct preference for motels located away from the city thorough fares and towards nature sidings-apparently she had over bought the argument of 'peaceful vacation in the lap of nature'; it was hard to convince her that local transportation would turn a big handicap at certain destinations.Mr.Kerr's wife had gathered from 'spouses' talk' at Realties' parties that some paying guest accommodations were economical and luxurious. She had even some addresses and tariff/facilities details to back up her demand. Finally Mr. Kerr had to adjudicate and decide with a mix of paying guests accommodations, city hotels and out-skirted motels. The family having concurred on most issues took a decision to travel to four Swiss locations for a 20 days vacation at an approximate budget/price of 13000-14000 pounds. Impact of family pressures is paramount in any consumer decision situation. The above case study amply demonstrates this, as all aspects of consumer decision viz, length of vacation, place of vacation, choice of airlines and even choice of boarding hotels had unmistakable stamp of family consensus and approval. It was the family that had developed motives for vacationing to a particular destination over time and it was the family itself which had slowly translated a felt need into a want and finally helped culminate it into a consumer decision to buy. Economic and social status factors within a group also had far reaching influence on the decision. In fact the two primary dimensions of this decision viz.length of vacation and destination of vacation were determined by such factors. Group of traders and supervisors at Sterling Realties exercised due influence through their informal norms. The fact that Mr. Kerr had to save almost double for this vacation shows the impact of economic background of Mr.Kerr.Hidden personal motives of Mr. Kerr supported the motives of his eldest son and there was a group motivation for selecting Switzerland as a destination. Demographic influences have been seen in group statistics on which Mr. Kerr had relied. In part these are also exhibited by nationalist considerations in choice of airlines. A nationalist attitude is essentially a demographic consensus on promoting causes of the nation. Religious considerations were voiced through Mr. Kerr's mother and her insistence on a repeat visit to Rome. Thus the above study not only demonstrates the basic process of consumer decision making but also the various factors that impinge upon it. Conclusion Consumer decision making process is an involved and complex process. This process is influenced by a variety of factors like demographic, cultural, social, economic, motivational, learning.A proper and complete analysis of all these factors with reference to the reference consumer is essential to uncover consumer motives in taking the decision and converting his felt need to want and to effective want by allocating sufficient purchasing power. Only such an analysis can help shape a truly effective marketing plan. Works Cited Hawkins, Del I., R. J. Best, and K. A. Coney .Consumer Behavior: Implications for Marketing Strategy. Plano. Texas: Business Publications Inc. 1983. First, A. Fuat and Dholakia,Nikhilesh. Consumption Choices at the Macro Level. Journal of Macro marketing.Fall.6-15. 1982. Huffman, Cynthia, S. Ratneshwar, and David Glen Mick .Consumer Goal Structures and Goal Determination Processes: An Integrative Framework. in The Why of Consumption: Contemporary Perspectives on Consumer Motives, Goals, and Desires, eds. S. Ratneshwar, David Glen Mick, and Cynthia Huffman, London: Routledge, 9-35. 2000. Maslow, A.H. Motivation and Personality. New York: Harper & Brothers, 1954. Cross, Gary. Valves of Desire: A Historian's Perspective on Parents, Children, and Marketing. Journal of Consumer Research. 29 (3).441-447. 2002. Moore, Elizabeth S. and William L. Wilkie. We Are Who We Were: Intergenerational Influences in Consumer Behavior. in Inside Consumption: Consumer Motives, Goals, and Desires, eds. S. Ratneshwar and David Glen Mick, London: Routledge, 208-232. 2005. Farris, Paul W. and John A. Quelch . Advertising and Promotion Management: A Manager's Guide to Theory & Practice.Malabar, Florida.R. E. Krueger Publishing Co. 1987. Leon G. and Leslie Lazar Kanuk. Consumer Behavior.Upper Saddle River.New Jersey: Prentice Hall. 1997. Other Readings Michael R. (1996), Consumer Behavior: Buying, Having, and Being, Englewood Cliffs, New Jersey: Prentice Hall. Engel, James F., Roger D. Blackwell, and Paul W. Minard (1993), Consumer Behavior, 7th ed., Fort Worth, Texas: Dryden Press. Wilkie, William L. (1990), Consumer Behavior, 2nd ed., New York, New York: John Wiley & Sons. Palda, Kristian S.(1966), "The Hypothesis of a Hierarchy of Effects: A Partial Evaluatio," Journal of Marketing Research, vol. 3, February, pp. 13-24. Read More