Influences on Decision-Making - Essay Example

Full topic and Section # of Gift giving and taking is now being considered as one of themany new topics of importance to marketers. By launching successful marketing campaigns, marketers can attract the emotional aspect of the buyer and lure the buyer into buying the product. It is considered as a great opportunity for marketers as it enables them to target their market segment in a much more specific view and gain important sale figures especially in the shopping and festive seasons. This can also be considered a threat for them, as if they don’t focus on the right aspect of consumer behavior and they fail to understand the psychology of their customer, it can result in a backfired marketing campaign that can cost the company the loss of customers. Consumer Behavior Consumer behavior is what the whole marketing theory and concepts are based on. By studying consumer behavior, marketers hope to find the reason why the consumer wants to buy a certain product. It aims to help and identify how people make their buying decisions and also the factors that influence those decisions. There are usually two kinds of buyers, organizational buyers and consumers. We are only concerned with the consumers who are the ones who buy services and products for use by themselves. They buy things that serve their need for living and the basic requirements of life. They also buy products to make the world know about their personalities and reveal their attitudes and their roles in the society. In other words they not only cater to the physiological needs but also the psychological aspect as well. Influences on decision-making Individuality is a characteristic that a man develops due to the nature and the surrounding environment he spends that life in. the behavior of a person towards buying a certain product will therefore be different for everybody. They might have different tastes, likes and dislikes, attitudes and values and their decision making process will differ according to that. The three major things that influence the consumer’s social environment are individual circumstances, personal psychology and the social environment. All these above mentioned factors have a lasting impact on the individuals buying behavior. Factors Social environment in which an individual lives his or her life helps greatly in shaping the life of people and their preferences. The culture that they are prevailing in, the reference groups to which they belong and cater too and the social class they exist in or the one in which they want to exist in. There can be an informational influence over them for example when they are told about the authenticity of a certain product’s working. A customer can also be influenced by the type of reference groups that he or she relates too. A marketer needs to identify the needs and influences of the reference groups of his target market in order to understand their consumer behavior and plan out their offer in such a way that coincides with the needs and wants of the customer and caters to his or her influence. A customer can be influenced by the ‘family of orientation’ which is the basic family or the parental family that a customer has; a daughter might end up using the same washing detergent her mother uses. Another kind of reference group is the family of procreation that is more of the extended family; a customer’s buying decision might be influenced with the house of his or her in-laws and he or she might to carry out different tasks and buy certain kinds of products in the presence of their extended family. Secondary groups are the less formal groups which the customer doesn’t end up meeting everyday and therefore they don’t pose a lot of influence over the buying decision behavior of the customer. Individual characteristics tend to stem from demographics characteristics. The gender of the person, the age group with which he or she is belonging to, the stage of the lifecycle the customer is catering to and the customer’s income and education; all these factors contribute immensely to the buying decision of the customer. Sound knowledge of these factors about your target market need to be analyzed and the product should be introduced according to their needs because if you don’t satisfy the needs of the customer while making the offer and introduce the product according to your own needs, the customer will never buy the product. Last but not the least, personal characteristics come in. The decisions that people make about the goods and services that they plan to buy are further influenced by their personal traits or their psychology. Personal traits such as sociability, self-assuredness, shyness and aggression are what make individuals react in a certain environment and situations they face. If marketers understand the reactions of these different personalities to different kinds of product and environment, they can design their products accordingly so that this buying decision comes in their favor. Another way that consumers use to express their personalities is their lifestyles. The kind of brand they wear, the kinds of products they use are used to reflect on their status and the personality that they have. Lifestyle is a person’s pattern of living as expressed in his or her activities, interests, and opinions as described by Kotler and Armstrong. Motivation to buy a certain product just because the product will serve to their needs, the perception of the customers about the certain product and the attitudes and beliefs of the customer base in question should be definitely kept in mind too. A Muslim individual would never want to buy alcohol as openly as someone from the western culture; therefore alcohol industry has absolutely no scope in Islamic countries. The Decision Making Process Consumers make buying decision in a calculated way; they go through a series of steps before taking a step to buy the product. The perception of need leads to information search about the kind of products available that will be able to satisfy the need. Evaluation of alternatives is done next to ensure that the right kind of product is used to satisfy the needs, the decision takes place after complete evaluation of the given alternatives keeping in mind the resources and the environment. Post-purchase evaluation takes place when the customer has used the product and cognitive dissonance can set in at this point that might compel a customer to think that they have chosen the wrong product. Gift Giving Gift giving is one of the important factors that a marketer has to take into account while formulating an offer for the customers. Especially in the holiday season and the winter season here everybody wants to look for the best deal as they have to buy different kinds of products for their loved ones and want it to be perfect. It becomes a challenge for a marketer to come up with such a strategy that fulfills the needs of the company as well the customer that is looking for discounts and personalized products that satisfy their need of affiliation. The personal and emotional characteristic of an individual matters a lot in this case. Gift giving might be a very prominent feature in some of the cultures than the other. There has to be proper guidance regarding the various gift offers that the company makes in those cultures as the consumers there want to make a sound decision about what they want to buy for their relatives or loved ones. Gift giving nowadays has become really important while strategizing for the marketing techniques and activities that one company wants to use. It has not been extensively explored however, a substantial amount of data is present that provides information regarding what kind of strategy to use and what methods to employ while luring in customers to buy their product as a gift to their loved ones. According to a research, a typical gift giver spent $2,643 on gift purchases in 2006 with an additional $78 spent on gift wrappings and cards that are appropriate for the occasion. The phenomena of giving gifts is increasing day by day and is being introduced in cultures all across the world as a good will gesture. Methodology The methodology section of this report deals with the techniques and procedures that we will be using in order to carry out the research. The quality of the marketing decisions is usually dependent on the quality of information that is used to make that decision. Questions such as who is the target market for this product and what do they really want to be offered in the product help marketers to produce ideas about what to make, what to charge, and where to publicize and place the product. Marketing research is a process that is being used by marketers to generate questions that have been raised above. There is a huge difference between market research and marketing research. The market research focuses on the trends that are being followed by the market specifically related to the customer activity, whereas marketing research pertains to the much wider issues related to an organization and its environment. Different types of researches can be conducted according to the type of information required. Market research, product research pertaining to the kind of new products a customer is looking for, pricing research to understand the price sensitivity to customers, Competitor research to understand the strategy and positioning of the competitor’s product. There are many other kinds of research such as economic and social research, distribution research, promotional research, behavioral research that is undertaken to understand the complexities of the buying behavior of the customer. The kind of information that is available in the market is also very vast. They have been bifurcated into primary and secondary data, internal and external data and information. Internal data includes the customer database that already exists, the management accounts, sales-force report, and previous marketing that may have been conducted before in the organization. The external data include the government statistics, Information provided by the trade associations and professional bodies, universities, the trade press and the syndicated research and omnibus surveys. One of the most important sources of collecting primary information is conducting focus groups and surveys. The kind of information needed for this survey is supposed to be directly from the customer. We need to recognize what kinds of products that customer wants according to the seasonal changes. The gender and the age groups which is more attracted to what kinds of product to give as a gift to his or her loved one. There has to be a connection that should be existing between different kinds of people and their tastes and their social class might be able to give us a lot of scope about how the income and education of an individual who is related to a certain group is going to effect the buying behavior of that customer. The idea is to develop a sound relationship between the consumer’s buying behavior and their basic personality traits and individual demographic traits. For this purpose, there is a need of collection of complete information about the customer base and the target market directly from them. Prior material on this subject can be consulted however, due to the changing trends and incomes of individuals, the changing of the socio economic conditions of the world; it might not be of complete help. The research that will be conducted will be through focus groups, observation research and interviews. The reason for choosing the combination of all the three kinds of marketing research techniques to collect primary data from the customers is to enhance and refine the research. Focus groups help in understand the responses of individuals by giving a firsthand knowledge of what consumers think about the introduced product. The conduction of interviews personally of the various individuals from the target market help gain the knowledge the customer is usually un-willing to give in front of others. Observational research will be able to provide the research an un-biased view of the buyer behavior towards certain products. By studying the buying behavior of the target market one realizes what to expect from the customers that they are targeting. The respondents that have been chosen are the grandparents and the people in a relationship because generally it has been seen that people related to this family lifecycle stage are the most active in these days to buy gifts for either their grand children or their loved ones. They are the ones who take the most pains in understanding the needs of the occasion and try to bring the perfect gift for the receiver which is equipped all the necessary arrangements and accessories. The sample will contain people in the mid 50s and 20s. random sampling will be done. In this case, the whole population is identified and some of the people from the sample will be asked questions and asked to sit in focus groups in order to represent the whole community. As each member of the population is equally likely to be selected for questioning, and there is no bias in the selection process, this sampling procedure helps the researchers to gain a very accurate view of the view of the population. Application of empirical research The research was conducted in the shopping malls and cafes of the city. All the different social classes were targeted and this was done through proper selection of individual malls and super markets that are spread across the city. The neighborhoods to the posh suburban areas and the malls and shops pertaining to these areas were covered to conduct this research. The time at which most of the people are visiting the malls to buzzing through the stores and have time was selected. The afternoon is the peak time at which all the people are done from their jobs and commitments and go for shopping for their needs. The general response that was collected from the individuals was usually very good. However, people pertaining to the older age group were generally more reluctant in providing the right kind of information. Most of the people in the malls situated in the better areas of the city was not very interested in the survey and gave little chance to the researchers to conduct their research. There were not many problems that were encountered while going through the survey and research. The researchers found the target market reasonably co-operative and helping that was considered as a blessing as not much people from the older target market were willing to inform and conform. Analysis This research was conducted to understand the importance that consumers give to the packaging and the environment they are that compels them to buy the product. The research was conducted in such a way that helped the researchers analyze all the areas that needed to be covered in order to gain complete knowledge about the influences that were present on the buyer behavior of the target market. This was a research in which around 1000 individuals participated through the focus groups and interviews and observational research. The research produced results that were expected and reinforced the ideas already present in the market about consumer behavior however, there was a slight change. The research helped us find out that most of the customers who are willing to buy gifts for their loved ones are the one pertaining to the groups that were being studied. These groups are the people in their mid fifties who buy gifts for their grandchildren. And the other part of the target market on which this research was conducted was the couples in relationships in their twenties. They took the most pains and planned in advanced to decide what kind of gift they wanted to buy. They make sure that they search the market well for all the necessary information that might be needed in order to make an informed decision about themselves and in buying the gift for either their grandchildren or their significant others. Another thing that was noticed was that as the holidays come closer, the consumers start searching the market for the right kind of product, they may not make the purchase straight away however this depends on the personality of the person. Holidays such as thanksgiving and Christmas bring the most amounts of consumers to the gift shops and the most number of purchases are made in this peak season. On this occasion too, grandparents take a lot of hassle to buy the right kind of product that may satisfy the need of their grandchild. The couples who are together also plan in advance and try to buy the best product available in the market. Most of the couples were interested in getting gifts that nest portrayed their feelings for the significant others in the best possible way and preferred products that had a loving touch to them. Chocolates are considered an essential part of the gifting arena. Almost everyone makes sure that they are an integral part of their gifts. The young or the old; equally demanded chocolates of all kinds. The basic attributes that a consumer is looking for in the gift are quality and presentation. The product that is taken as a gift needs to be presentable and the quality standards should be met. Mostly consumers look for different kinds of product according to the age group to which they want to give the product to. There has to be a conjunction between the kind of gift brought and the person who has to be given the gift. The consumers tend to buy toys for the lower age groups that are presentable or are in fashion for example, these days dora the explorer merchandise has taken the market by storm. Every single child is so inspired by her and her merchandise that they want everything with their favorite character on it. The psychographic profile of the consumer reveals that there are basically four kinds of consumers. The first kind is that is mostly involved in all the shopping that is done. They are emotionally involved in the whole process and make sure they buy the right kind of gift without keeping the price factor in mind. This is the kind of group that finds shopping as most entertaining and relaxing. The next kind is the one who plans ahead of the season and plans accordingly as to what to buy as gifts for their loved ones. They are the kind who have done with their shopping almost before the peak time of shopping to avoid hassle and problems. They tend to spend more than the average consumer on gifts. The third kind is the one who doesn’t consider shopping as the most enjoyable things in life. They consider it an obligation to give gifts and feel very strongly about it however, their shopping activities fail to take place at the last moment and they spend significantly less than the average. The last kind of the shopper is the one who knows what he wants to buy for their receiver and he does it at the last moment as he waits and waits for the right time of shopping which hardly ever comes. In the research it was found out that most of the people were pertaining to this group only. They had a clear idea about what they wanted to buy for their loved ones however they waited till the last moment and it lead to not finding the right kind of gift as most of the good stock supplies had already finished. Conclusion With the help of this research we were able to identify the kind of people who are most involved in the process of shopping and what exactly are they demanding from the marketers and companies. There was a clear evidence that the consumers went for products that came well within their price range however, quality was given priority over price at a number of occasion. In the suburban areas, price was not considered a factor and consumers wanted to buy the best for their loved ones and spent a considerable amount on accessorizing the whole gift and loading it with wrappings and cards according to the situation. The research encompassed also had significant impact that was seen on the basis of the culture of the people who were interviewed or contacted in this research. Culture is termed as an external factor and influences the buying decisions of the lot on the basis of the cultural teachings and beliefs that they follow. The symbols that they people had important values in their cultures also influenced their choice. Through this research, there were four kinds of shoppers identified in the peak season of shopping of gifts. The most popular kinds was the one who knew what they wanted for their loved ones however they spend their time waiting for the right time to buy the product and couldn’t then buy the perfect gift due to non-availability of stock. The basic limitation of this research was that it was conducted keeping in mind the peak season for the gift giving and taking and that is the winter season before thanksgiving and Christmas. This research doesn’t take into account the usual buyer behavior under normal circumstances and conditions. Bibliography Anne Basye. Opportunities in direct marketing. Mcgraw Hill Alvin Burns, Ronald Bush. Basic Marketing Research. Pearson Ashok Ranchhod, Calin Garau. (2006) Marketing Strategies. David Cravens, Percy Nigel. Strategic Marketing. McGraw Hill Elizabeth Hill, Terry O’Sullivan. (1996) Marketing. London. Longman Gary Armstrong, Philip Kotler. (2008) Rethinking Marketing. Pearson Russ Winer. Marketing Management. Pearson Books Friesen, Pat. (1998).Gift Giving is big business (Target Marketing). Available from www.findarticles.com/p/articles/mi_hb3450/is_199802/ai_n8217553 [Acessed 17 January 2008] QuickMBA (2007). Marketing research. Marketing Research. Available from www.quickmba.com/marketing/research . [Accessed 17 January, 2008] Read More