Buyer Behaviour Analysis, The Psychology of Buying - Case Study Example

Buyer Behaviour Analysis - The Psychology of Buying Table of Contents Table of Contents 2 Introduction 3 Review of Pertinent Literatures Regarding Different Models of Human Behaviour Affecting Consumer Decision Making 4 An Economic View 5 A Passive View 6 A Cognitive View 7 An Emotional View 7 Critical Analysis with Organisational Example 9 Conclusion 13 References 14 Bibliography 16 Introduction Over a period of 300 years, it has been observed that economists have been researching on consumers buying behaviour. In accordance with Michael R. Solomon (2006), “consumer behaviour is the study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and desires” (Solomon, 2006). According to the study, it can be apparently asserted that consumer behaviour reflects a wide-range of factors, which can influence consumers and that influence can have a profound affect directly on their buying behaviour (Solomon & et. al., 2009). There pertain a number of critical factors such as price of goods, income of the consumers and tastes as well as preferences of the consumers that can influence the buying behaviour of a consumer. In this regard, it has been determined that at the time of buying any goods or services a consumer renders significant concern about his/ her own perception about the goods. Adding to that, it has been observed that social and cultural background, family circle, and social class among other factors both internally and externally influence behaviour of buyers. Similarly, attitudes, beliefs, values, motivation and personality of a consumer also can leave a high impact on the psychology of a buyer. Thus, it can be evidently asserted that economic and emotional factors can influence a consumer’s decision during buying goods or services (New Age Publishers, n.d.). Correspondingly, the objective of the study is to prepare a research report through critically analysing the different models of human behaviour in relation to consumer decision-making. The key constituents of consumer behaviour model that would be taken into concern would include economic, passive, cognitive and emotional parameters. In order to derive a lucid comprehension regarding the study in concern, one of the global renowned companies i.e. McDonald’s has been chosen from the fast food industry. Review of Pertinent Literatures Regarding Different Models of Human Behaviour Affecting Consumer Decision Making Since the concept of marketing has arrived in the modern era of business, it has been observed that consumers buy goods or services in order to satisfy their own need. Consequently, it has been determined that the organisations have emphasised towards studying consumer buying behaviour in order to understand the psychology of the consumers. In accordance with Yakup Durmaz (2014), the factors that can affect the buying behaviour of a consumer are characterised as social factors, cultural factors, personal factors and psychological factors (Durmaz, 2014; Nagarkoti, 2009). Over the years, several scholars have observed that these factors can influence the decision making of a consumer in order to buy goods and/or services. According to Schiffman (2010), consumers make decisions about buying a good by considering the following four models (Schiffman, 2010). These are illustrated below: 1. An Economic View 2. A Passive View 3. A Cognitive View 4. An Emotional View. Accordingly, it has been perceived that these consumer behaviour models help a marketer to identify and understand the key influencing factors that drive a consumer to purchase certain kinds of products out of impulse at times. It has been also observed that several marketers have benefited through these models in order to predict buying psychology of consumers (Cengage, n.d.). Thus, recently, it has been observed that most of the larger marketers have been formulating marketing programs and figuring business strategies in order to understand the behaviour of the consumers. In order to understand the consumer decision-making psychology, the different models of human behaviour are discussed below: An Economic View From the economic perspective, it can be asserted that presence of consumers in a marketplace can be considered as rational. During buying any goods and/or services, consumers are aware about the fact that the existent market condition is a perfect competition, where several various alternatives are always available. At the same time, consumers can also recognise due to perfect competition situation in market place that every marketer is trying to negotiate with their customers in terms of price. Apart from this, consumers can also identify the variation in quality in specific goods. And finally, consumers are making a rational decision about buying specific goods by evaluating all these factors from an economic viewpoint (Sahney, n.d.). In this regard, in accordance with Schiffman (2010), this economic view model also can be termed as economic man theory. Apart from this, it has been also observed that this economic view model has been argued due the several reasons. In order to analyse those reasons, it has been acknowledged that the consumers are restricted by their own existing skills, habit and responses. Apart from this, it has been noticed that consumers have inadequate comprehension by their usual beliefs and aims. Moreover, it has been also perceived that consumers are limited by the level of their knowledge (Schiffman, 2010). Thus, usually it has been observed that consumers make their buying decisions in terms of economic considerations. According to the observation, it has been identified that consumers are considering price, quantity and quality in order to make satisfactory buying decision for them-selves. Moreover, the key economic drivers enable the customer to choose a particular brand over the others primarily because of their capability of buying that product (Sahney, n.d.). A Passive View In case of a passive view, it can be asserted that the consumer is irrational and impulsive who is often easily influenced by the selling and promotional efforts of the marketer. Responsively, consumers are influenced by marketer due to their self-interest about the products and/or services (Sahney, n.d.). In case of passive view, it can be asserted that as compared to the economic view of human buying behaviour the passive view is completely different. In case of passive view related to human buying behaviour, it can be observed that eventually consumers are manipulated by the marketer or seller. According to observation, it has been identified that trained sales persons can influence a consumer for buying specific goods. This often empowers the marketers to execute over the top promotional activities which might not be the actual scenario to coerce the customer to buy a section of offerings (Schiffman, 2010). A Cognitive View With regard to cognitive view, customers are capable enough to fix their own problem by searching a specific product and /or service for him/her-self in order to fulfil their own needs/requirements. During this stage, it has been observed that consumers generally select decisions according to their own gathered information and knowledge. It has been also observed that according to the psychology of a consumer, the individual choses his/her decisions after the long thought and discussion about the goods, in order to maximise benefits for him/ her (Sahney, n.d.). In case of cognitive view, generally, it has been observed that consumers aim at gathering information in order to identify their desired product in a marketplace and buy that specific product for fulfilment of their own requirements. In accordance with Schiffman (2010), the cognitive view has been referred as a problem solving method because through the help of this method consumers are often making decisions about buying goods, when they do not have the luxury of choosing decisions through the help of economic view or passive view (Schiffman, 2010). Besides, during this stage, actually a consumer does not have sufficient information about specific goods and also about their alternatives. On the other hand, neither any sales person nor marketer is available for sharing information about those goods. At that point of time, in order to fulfil their own requirements, a consumer makes a satisfactory decision of buying specific goods. This buying behaviour is regarded as a cognitive view (Schiffman, 2010). An Emotional View Correspondingly, in case of emotional view, consumers are regarded as highly emotional and impulsive. In this case, more often, it can be observed that consumers are making decision about buying goods based on their mood and emotion (Sahney, n.d.). According to the analysis, it has been observed that when a consumer usually makes his/her decisions about buying goods emotionally; during that stage neither any marketer nor economic view comes into consideration in the human mind. According to Schiffman (2010), it has been determined that a consumer choses to buy a specific goods emotionally; either in case of being in a pleasant mood or it can be done in order to maintain the status level. Moreover, it has been also observed that consumers eventually make such buying decisions through being encouraged by the shopping environment (Schiffman, 2010). Critical Analysis with Organisational Example Over the years, it has been observed that buying behaviour of consumer has affected the performance of several larger organisations in case of global marketplace. It has been also determined that multinational organisations have implemented several strategies in order to attract the psychology of the buyer in case of global market. From the study, it has been ascertained that several factors can affect consumers’ behaviour in a market place. Moreover, consumers are also choosing buying decisions due to several psychological factors, which can affect the performance of the organisation. This concept is also applicable in case McDonalds Corporation. The company was established in the year of 1940 and it had started its operations in the United States of America. Over the years, the company has been operating its business activities competitively in the fast food restaurant industry and the company has become globally renowned due its quality food products and services. According to the observation, it has been identified that the company has extended its business operations among more than 120 countries (McDonalds, 2014). McDonalds has concentrated on human behaviours in order to understand the consumer decision making psychology. Specially, it has been observed that the organisation has emphasised consumer decision making psychology during the entering period in the foreign market. Correspondingly, McDonalds has implemented several strategies in order to attract consumers’ attention and significantly executed those strategies through its marketing approaches, advertising and promotional activities. During the market research, the company i.e. McDonalds has realised that consumers are often looking for such products, which will satisfy their needs and requirements. Apart from this, the company has also studied the motives of the consumers that at the time of buying decision making consumers invariably prefer good quality products in an economical cost. Furthermore, being in the restaurant sector, McDonalds has also identified that consumers prefer to have food products from a healthy and hygienic place. Simultaneously, the company analysed that attractive and good environment will also draw more number of consumers psychologically. In order to attain those aims, the organisation has taken several measures, which are highlighted in this study (Foxall & et. al., 2006). In order to attract the psychology of consumers from economic point of view, the company McDonalds has launched its food products and maintained exceptional quality of those products on a constant basis. Apart from this, the company has assessed the cost of the products economically as compared to its competitors in order to maintain long-term sustainability and competitive advantages. Moreover, in order to establish market leadership, McDonald’s has extended its business operations in several countries. Through these strategies, McDonalds has ensured its product awareness almost in entire globe. Apart from this, company’s economical pricing strategy also helps to grab the psychology of buyers (Rofianto, n.d.). Moreover, through spreading its fast food restaurant outlets, the company has also ensured its availability of food product within wide market areas. These are the strategies of McDonald’s that have helped to attract more number of consumers in global market. Besides, it has helped McDonalds’ to understand the buyer behaviour and buying psychology of consumers from economic perspective (Taylor & Lee, 2007). Similarly, the company McDonald’s has also tried to manipulate its customers during its business operations. It has been observed that the company has tried to influence its prospective buyers to buy food products from its fast food outlets in order to build strong relationship with their customers and through these strategies the company also attracts more number of buyers by utilising the passive view model. Accordingly, McDonald’s has often tapped into the irrational decision making of the buyers as during purchasing of food items customers often do not go by their logical purview but by their impulse. With regard to the cognitive view, it can be stated there are a few consumers who fall amid the economic as well as passive views, which implies that it becomes difficult for the organisations such as McDonald’s to frame strategies in order to influence the buying decision of such consumers. These are consumers who do not have proper knowledge regarding the products but seek information from various sources in order to make satisfactory decision. These characteristic of the consumers are considered by McDonald’s in order to influence the buying decision. In this regard, McDonald’s provides offers and advertisements on a frequent basis through the use of social media. This strategy helps in influencing the cognitive behaviour of the consumers and allows them to make a purchase even if they have no such intention of purchasing the goods. The regular and frequent advertisement creates a need in the mind of the consumers which influences their buying behaviour at large (Hu & Xie, 2013). Furthermore, regarding emotional view, it can be stated that it is related to the impulsive buying behaviour of the people. It is often observed that people tend to purchase and spend their money on the basis of their emotions. People purchase things when they are sad or happy just to lighten up their emotions. In this regard, organisations such as McDonald’s use the marketing strategy wherein they provide offers and tagline to influence the mood of the consumer. The tagline of the McDonald “Just loving it” influences the consumer buying decision if the consumer is in a mood to enjoy. Moreover, it is observed that consumers at times give more importance to the emotional aspects while purchasing their goods. In this respect, McDonald’s conveys emotional feelings and experiences through its advertisements by using kids to display emotional attachments. This influences the buying behaviour of the consumers at large when buying products and celebrating with family members (Marketing Society, n.d.). Also, the electronic point of sale strategy implemented by the McDonald’s is useful in order to influence the impulsive buying decision of the consumer. Due to the electronic point of sale system, goods are sold to the consumers with minimal error. This strategy influences the buying behaviour of the consumer at large influencing both cognitive and emotional views. Conclusion From the foregoing discussion, it has been observed that consumers are often influenced by their buying psychology during making decision about purchasing goods. It has been also observed that several factors such as emotional influence and manipulation along with many others factors can directly and indirectly affect the buying behaviour of consumers. Apart from this, it has been observed that most of the organisations have applied several strategies in order to influence the psychology of buyer. It has been also determined that understanding buyers’ psychology is quite essential for business organisations. In this regard, the instance of McDonald’s has been quite prospective. It is determined that the company has tactically used the different models of human behaviour to at times attract and at times influence the consumer buying behaviour. Subsequently, various promotional methods have played a critical role towards ensuring that McDonald’s remain as the leading player in the fast food market. References Cengage, No Date. Consumers Decision Making. Chapter 5. [Online] Available at: http://www.cengage.com/resource_uploads/downloads/0324548141_78369.pdf [Accessed June 20, 2014]. Durmaz, Y., 2014. The Impact of Psychological Factors on Consumer Buying Behavior and an Empirical Application in Turkey. Asian Social Science, Vol. 10, Iss. 6, pp. 194-204. Foxall, G. R. & et. al., 2006. Consumer Behaviour Analysis: the Case of Brand Choice. Janeiro Junh, Vol. 6, Iss. 1, pp. 50-78. Hu, W., & Xie, Y., 2013. Comparative Study of McDonalds and Kentucky Fried Chicken (KFC) Development in China. Theseus. [Online] Available at: http://www.theseus.fi/bitstream/handle/10024/60257/Xie_Yuanyuan%20and%20Hu%20_Wei.pdf [Accessed June 20, 2014]. McDonalds, 2014. Our History. Home. 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