Buyer Behaviour Analysis - Coursework Example

BUYER BEHAVIOUR ANALYSIS Department Table of Contents Table of Contents 2 Introduction 3 Consumer Motivation 3 Consumer Perceptions 6 Consumer Learning 9 Consumer Attitude 11 Conclusions 14 Introduction Buyers are very important partners in the exchange process and are the main focus of successful marketing thus understanding their needs and purchasing decision are the main reason for marketing. In this respect, failure to understand the psychology of buying therefore means that the market offering would not possibly be tailored to the demands of potential buyers thus the goals of the marketer would not be met. According to Kotler& Keller (2009, p.56), the potential buyers, in commercial situations, vote with their dollars for the market offering that they feel best meets their needs”. It is therefore important to understand how they arrive at a decision to purchase in order for a marketer to build an offering that would attract them. This paper focuses on how psychological factors; motivation, perception, learning and attitude could influence purchasing decision of luxury cars. Consumer Motivation A motive can be defined as the internal energizing force that directs individual’s activities towards achieving a goal or satisfying a need. Actions are however affected by several motives thus marketers’ ability to identify these motives forms the basis of developing a successful marketing mix. Motivation is the internal force that reorients our behaviour towards the decision making process and purchasing behaviour. According toYalch& Brand (1996, p.406), once an individual recognizes that they have a need, there is normal a state of tension existing that drives the consumer to achieving the goal by eliminating the need and reducing the tension. In this regard, it is important to note that only unmet needs motivates an individual and once they are eliminated there could only be another motivation emanating from another need. Maslow’s hierarchy of needs identifies five levels of needs that are likely to determine the level of hierarchy the consumers are and determine what motivates their purchases. According to Maslow’s hierarchy of needs, purchasing behaviour is mainly driven by the lowest need that has not been met by a buyer. The five primary areas of needs identified by Maslow model are physiological, safety and security, love and belongingness, self esteem and finally self actualization. This model postulates that as the needs of consumers are met in the first level say physiological, they move towards the next and so on (Lester, 2013 p.15). In this model, consumer buyer decisions are motivated by one of the 5 needs level in their hierarchy. In this regard, ability of a marketer to appeal to one of five motivational driers above is the key determinant of your potential success. Figure 1: Maslows Hierarchy of Needs The BMW car company manufactures and distributes a number of cars that are driven mainly by the second last and last levels of needs postulated by Maslow. Most consumers of BMW cars are often motivated by the need for safety and security and may be enticed to purchase other brands of the same car mainly for their luxurious nature in order to meet self esteem needs. Consumers for these brands of cars are often influenced by the type of packaging describing the car as reliable, safe for their family and buy purchasing their self esteem will be met. These consumers are also motivated by the need for recognition and validation thus acquiring BMW luxury cars would bring accolades from their peers and making them look good before the society. Consumers often develop association towards specific brands mainly due to the inherent motivation to meet specific needs in the next level of need. BMW cars are often characterized by consumers who value luxury and performance as well as safety and reliability. In this regard, consumers who already own cars are most likely to purchase this luxury car because they are not buying their first cars. However, fist car buyers would not be motivated to buy luxury cars because they are first interested in meeting the basic needs in life such as transportation of family members from one place to another. According to Maslow’s hierarchy of needs, these consumers are motivated to meet physiological needs after which they are likely to move to the next level where they would need to meet security needs, self esteemed and self-actualization (Lester, 2013 p. 16) upon which they would be motivated to purchase MBW luxury cars. According to Lester (2013 p.16), a prospective customer influenced by Maslow’s fourth level of needs may be motivated to purchase a new model of BMW car due to the fact that it reinforces the status of owners in the society thus ones self-esteem is met. These consumers are looking for recognition and validation within their society. Understanding consumer motivation and how it influences purchasing decisions is therefore important for marketers in order for them to come up with successful marketing mix. Car retailers in the United Kingdom can therefore connect successfully with their prospective customers if they are able to appeal to their needs in a meaningful and relevant manner. It is important for car retailers to understand the levels of needs that their consumers are trying to meet then come up with brands of cars and market then in such a way to convince the consumers that it would fulfil exactly the need of such consumers. Car retailers can therefore achieve this by understanding where on Maslow’s hierarchy of needs their customers’ base is and where their products fit in. Consumer Perceptions Perception refers to the process of choosing, organizing and interpreting information inputs to produce a meaning. Consumers and like any other human being choose what to give attention to organize and interpret. On the other hand, the information refers to the sensations that are received through our sights, hearing, taste, touch or smell (Peter & Olson, 2005 p.109). Car buyers are continually synthesizing all the information that they have about a car retailer company as well as a manufacturer to form a decision whether that retailer company offers value. According toMarshall et al (2008 p.564), consumer perception is an approximation of reality. Information forms an integral part in orienting consumer perception of a car or the services of a car manufacturer by exposing a consumer. In this respect, the more information consumers have about a car, the more they more comfortable they are about deciding to purchase a product. Consumers are therefore influenced by the products information that exposes the product out of the other products. In this regard, cars that “stand out” among other cars within the minds of consumers are said to be perceived positively and vice versa. It is however important to note that consumers perceive information differently. For example, consumers re often exposed to different information about cars ranging from radio, internet, television, magazines, bill boards and many other forms of communication. Not all these information make it to the minds of consumers but only a few. This is explained by consumer perception theory which outlines the perception process. Consumer perception theory explains how consumer’s perception of a product or service reorients their purchasing behaviour. This theory tends to explain why many buyers make decision to buy a particular product or service and not the other. As stated by Loudon& Bitta (2002 p.67), perception relates to how consumers receive and process stimuli through their five senses. In this context therefore consumer perception of cars determines how they form opinions about car retailing companies, their cars and the merchandise they offer through the purchase they make. This is what creates value for consumers. Self-perception of cars by consumers relates to the motivations and values that drive buying behaviour for instance a luxury car like BMW. Moreover, a study by Loudon & Bitta (Loudon, D.L. & Bitta, 2002 p.67), concluded that consumers self-perceptions was a major driving factor on consumption and purchase practices. Psychoanalysts have categorized perception process in a three-step process. The first step is the awareness of particular information out of many pieces of information that reaches the consumers at a time. This is referred to as selective exposure since individual chooses which information will reach their awareness out of the many pieces of information. In this regard, preference is most often given to the strongest needs of individuals. According to Schiffman, L.G. & Kanuk (2004 p.89), selective nature of perception may also result into selective retention or selective distortion, in the former, consumers remembers information inputs which supports and orients their personal beliefs and feelings. The second step of consumer perception is the perceptual organization of the information that reaches awareness by the brain in order to produce a meaning to the information (). Through what is already stored in the memory of individuals, information is integrated to make a meaning. The third and last step in perception process is interpretation which refers to the assignment of meaning to what has been organized by the brain thus interpretation is based on what is familiar or what she or she expects (Marshall, et al 2008, p.564). Car brands and how they are packaged are key influencers of customer perception. Branding refers to adding a kind of identification feature on a product or service in order for the product to be recognized easily by the consumers. BMW brands are often associated with luxury image and a strong logo thus most of their consumers are likely to perceive the new cars the same way. In this respect, BMW car buyers are likely to be influenced by information about BMW and they are likely to pay attention and if such information i mixed with others, they are most likely to reach their awareness. Because BMW cars exhibit a powerful brand, they are likely to be set apart from others of its kind in the minds of consumers thus finally influence consumers to choose their brand over other brands simply because of the associations they have with the product. Moreover, since consumers are selective in nature with respect to the pieces of information that they perceive, and that organization and interpretation is based on what the consumers expect, cars with strong brands such as BMW are likely to exhibit positive perception among the luxury car buyers. Positive perception is what reorients consumers to purchase more of the product. Consumer Learning Consumer learning refers to the process in which consumer behaviour is reoriented after gaining some kind of experience or information about the product, service and its merchandise. People with limited information about cars are often faced with an extra work of looking for more information about a car before deciding to purchase. Pendragon PLC provides customized consumer information with special web pages about different models of BMW brands. The provision of information about this brand through the print media as well as online mediahas made Pendragon PLC a leading car retailer primarily because of the attractiveness of new brands as well as the increasing consumer confidence and trust in what they say. Learning and ability to access information about products has been used in marketing by Pendragon PLC to significantly influence the purchase decision process for their BMW buyers. As stated byYalch, R, & Brand (1996 p.406), learning is considered to exhibit psychological influence on the consumer behaviour when coupled with perception, beliefs attitudes, values, lifestyle and motivation & personality. Through learning, consumers are capable of modifying existing or acquire new skills, preferences, behaviours, knowledge, norms and values. According to Schiffman, L.G. & Kanuk (2004 p.88), learning is diverse and can be categorized as imprinting, episodic learning, associative learning, e-learning, formal, informal, multimedia and so on. However, learning theory can be categorized into three main types; cognitivist, behaviourism and constructivism (Schiffman, L.G. & Kanuk, 2004 p.97). While cognitivism focuses beyond buyer behaviour and explains brain based learning, behaviourism emphasises on observable aspects of learning. Constructivism on the other hand looks at learning as a process through which learner actively constructs or builds new knowledge, concepts or ideas. Consumer learning and how it influences consumer purchasing of BMW cars for Pendragon PLC car retailer can be analysed using David Kolb’s Model. David Kolb’s model, in his book: “Experiential learning: Experience as the Source of Learning and Development” (1984) is based on Experiential theory and outlines two main processes of grasping experience (Concrete experience and abstract conceptualization) as well as two main process of transforming the experience (reflective observation and active experimentation). According to this model, the ideal learning process incorporates all the four process mentioned above in responding to situational demands. However, individual’s consumers in their attempt to use all the four approaches tend to develop strengths in one experience-grasping and one-experience transforming approach which results into the combinations of individual’s preferred approach. This results into four learning styles namely diverger, converger, accommodator and assimilator. Abstract conceptualization as well as active experimentation is the key characteristics of convergers. These types of consumers are very good at practically applying their ideas using deductive reasoning to find solution to their problems. However, divergers often leant towards concrete experience as well as reflective observation. These type of consumers see things from different perspectives and are also capable of coming up with ideas due to their high imaginative nature. Assimilators characteristics include abstract conceptualizers and reflective observers. In this respect, they are creative thus capable of coming up with theoretical models through inductive reasoning. Accommodators’type of learning category of consumers mainly uses concrete experience as well as active experimentation. These buyers according to David Kolb are excellent at engaging the world actively and participation in various activities as opposed to just studying them. According to David Kolb, an individual is likely to exhibit a preference for one of the four learning styles above depending on their approach to learning through the experiential learning theory. Consumer Attitude Consumer attitudes refer to what they feel or believe about the products and services and may be demonstrated in the way in which they act. According to Yalch, R, & Brand (1996 p.407), once an attitude is formed, it may be very difficult to change thus if a consumer develops a very bad attitude about a product, it would be very difficult to change. In this regard, consumer attitudes are categorized as composite of a consumer’s feelings about the product, beliefs as well as behavioural intensions towards some objects within the context of marketing and for this case a car retail store, Pendragon PLC. It is important to view all these components together since they are highly interdependent and to better understand the forces that influence the manner in which the consumers will react to a particular product. Car retailer such as Pendragon PLC often faces consumers with negative attitudes towards their BMW luxury cars which are often believed to be very expensive and fuel guzzlers. These group of car buyers have formed an attitude that would be difficult to change thus are less likely to buy these cars since they have negative perception, low motivation for the car even if the retailer stock and advertise other brands such as BMW x3 brands which are relatively cheap and fuel economic. Pendragon marketers must therefore work very hard to identify the key issues that shape their consumers purchase decision in order to adjust their marketing decisions with regard to promotion and advertising. While many consumers with low income feel positive towards fuel economy cars like Toyota models, they feel negative about BMW cars because of the negative belief and feelings. Even though changing consumers’ attitude may be difficult, the Elaboration likelihood Model outlines the underlying issues necessary to change consumer attitude. As stated by Schiffman, L.G. & Kanuk (2004 p.40), “Elaboration likelihood Model, outlines attitude formation and change in the context of consumer’s exposure towards an advertisement, and the level of involvement” (Banerjee, 2010 p.10). The elaboration likelihood model suggests that change in the attitudes of consumers can be achieved through two main roots to “persuasion, viz., the central route and peripheral route” (Banerjee, 2010 p.11). For the case of Pendragon PLC car retailer for example, high involvement, attitude change towards their luxury BMW brands would take place when the consumer would look for the information related to this brand of cars. According to this model, Pendragon PLC consumers would most often have high need of cognition and would therefore put more effort to gather information as well comprehend information about BMW brands through their online brochures, internet, magazine and other sources. This model suggests that ability to access information would lead to change in attitude of their buyers of this car through the central route of persuasion. It is therefore important to note that in the cases of high insolvent, the focus of consumer is “central” product related information, high level of elaboration and deeper comprehension which impacts positively. However, this model suggests that for low involvement consumers attitude change occur through peripheral route to persuasions. In this case, non-car related information such as beautiful ads, free samples, after sales service, attractive models and discounts remains the main focus for car buyers. This exhibit shallow comprehension and low elaboration extent which impacts on attitudes towards promotion rather than the brand itself. In this respect, most Pendragon PLC potential consumers focus their effort on gathering, comprehending and evaluating information about a car brand in which they exhibit higher levels of ability and motivation thus attitude change as well as learning occur through central route. Pendragon PLC uses different strategies to gain appeals to customers especially for its luxury BMW models. One of the strategies used by the company to reorient customer attitude towards this type of car is through making the needs of their customers prominent. Through their campaign and promotion, they have focused on the needs to provide safety and comfort for the family. In this regard, BMW cars are viewed as high quality cars that provide safety as a family car thus most customers strive purchase this car even though their prices are higher. Since attitudes are an expression of consumers’ general values, outlook and lifestyles, Pendragon PLC car retailer has focused on knowing the target consumers’ attitudes thus can anticipate their values, outlook and lifestyle thus reflect these attributes in their advertising, promotion and other advertising approach to BMW brand. The consumers’ attitudes towards BMW cars are therefore influenced not only by strong brands manufactured by BMW Company over the years but also on the promotion strategies. Figure 3 Stimulus-Response Model of Buyer Behaviour Source: Middleton (1994) Pp 104-112  Conclusions Consumers’ decision to purchase is influenced by several psychological factors. Persuading or convincing consumers to purchase forms the central duty of a marketer hence it is necessary to understand how purchasing is influenced in order to reorient it. Pendragon PLC car retailer can succeed in positioning its BMW luxury cars brands by focusing on consumers’ needs or problems, predict what people are likely to buy and taking advantages of the psychological tenets to explain and predict what people are likely to buy. The four factors underlie the decisions made by consumers include: motivation and need, perception, learning and conditioning, and attitudes and beliefs. Since the decision made by consumers is influenced by all these factors, reorienting consumers purchasing decision is complex thus each factor needs to be studied with others. In order to reorient customers’ purchase decision it is important for Pendragon PLC Company to understand what prompts consumers to buy certain brands of BMW cars in order to stock the right brand at the right time. This is because consumers’ motivation, perception, learning and attitude changes with time as the consumer gets exposed as well as when they meet their immediate needs they want to move to the next level of needs. For instance, BMW buyers would most probably in future look for cars that are featured with extra features. In this regard, these extra features will turn into needs that must be met by the manufacturer or Pendragon PLC by stocking superior brands References Banerjee, S 2010, Study on Consumer Buying Behaviour During Purchase of a Second Car, Journal Of Marketing & Communication, 6, 2, pp. 4-13 Kotler P., and Keller K.L. 2009, Marketing Management, Thirteenth edition, Pearson Lester, D 2013, Measuring Maslows Hierarchy of Needs, Psychological Reports, 113, 1, pp. 15-17 Loudon, D.L. & Bitta A.J. 2002, Della, Consumer Behavior, Fourth Edition, New Delhi: Tata McGraw-Hill. Marshall, R, Na, W, State, G, & Deuskar, S 2008, Endorsement Theory: How Consumers Relate to Celebrity Models, Journal of Advertising Research, 48, 4, pp. 564-572 Peter, P.J. and Olson, J.C., 2005,Consumer Behaviour and Marketing Strategy, Seventh Edition, McGraw-Hill Higher Education. Schiffman, L.G. & Kanuk, L.L., 2004, Consumer Behavior, Eight Edition, New Delhi: Prentice Hall. Yalch, R, & Brand, F 1996, Need Hierarchies in Consumer Judgments of Product Designs: Is It Time to Reconsider Maslows Theory?’Advances in Consumer Research, 23, 1, pp. 405-410. Read More