Consumer Behaviour and Buying Decision Process - Term Paper Example

Table of Contents Abstract 2 Introduction 3 The reason why people make certain decisions in buying a certain product or service is dependent on mental and social factors. The factors will determine the kind of choices the consumers make. As a result the companies use these choices to produce the goods determined by the consumers needs in the effort of delivering value to their customers. The process of consumer behavior in making a purchase decision is given in five stages which include; problem recognition, information seeking, evaluating alternatives, making purchase decision and the post purchase behavior. 3 4 The Buying Decision Process 4 Problem recognition 4 Information searching 4 Assessing the value of the house option preferred 6 Application of the compensatory decision rule 8 Analysis of Choices 9 Selective process 11 Selective understanding, retention and perceptions 12 Post purchase behavior 12 Conclusion 13 In conclusion, various factors are considered by potential house buyers before they make the final decision of purchasing a home or renting a house. Different individuals have different aspects they consider to be important before they make a purchasing decision. Some will consider safety, nearness to public transport, proximity to ocean or sharing housing to be their top most priority. Some individuals will choose a house depending on their lifestyles or personality. Lifestyle will influence someone to consider accommodation that is near the town center or prefer accommodation that is away from the town or an accommodation situated in the countryside. Some will choose accommodation depending on the affordability. Those who prefer expensive houses chose them because of prestige and the ones with less income will prefer a cheaper and affordable house. Every house constructed therefore has to reflect a given market target. For instance, house sellers target consumers who live near town due to work or studying, or those who would just be associated with the lifestyle of living in the town center. Some target the high income earners or lower income owners. Therefore home sellers design their houses depending on the buyers’ perceptions and buying behaviors. 13 Bibliography 14 Abstract Individuals display various characters whenever a buying decision has to be made. They ask themselves whether they are making a sound decision in purchasing a given product or they might be disappointed after the purchase. Therefore, they take on a process to enable them compare the alternative choices available on the market so as to come up with the best choice of buying. In buying or deciding to rent a house, purchasers are always driven by a desire to why exactly they would want to purchase a given house at a given location. The aim of this report is to find out the factors that the Purchasers consider most before making a decision to whether they will purchase or rent the house in question. Introduction The reason why people make certain decisions in buying a certain product or service is dependent on mental and social factors. The factors will determine the kind of choices the consumers make. As a result the companies use these choices to produce the goods determined by the consumers needs in the effort of delivering value to their customers. The process of consumer behavior in making a purchase decision is given in five stages which include; problem recognition, information seeking, evaluating alternatives, making purchase decision and the post purchase behavior. The Buying Decision Process Problem recognition A consumer will have the urge to purchase a given type of a product such as houses when they perceive a need for acquiring such product. They may need a house near town because of nearness to work or they may need a house next to a beach for the beauty and cooling effects of beach currents or maybe as a result of a particular lifestyle associated with living next to an ocean. Some would want to live in serene country environment free from noises hence they would want to buy a house that is away from town. Information searching According to Moore (2008) the need to purchase a given type of a product for a given purpose will trigger a potential purchaser to start searching for information that would be vital to help him or her make the right decision to purchase the product in mind. Search for information to purchase the house can be external or internal. Whereby, internally a consumer will scan his or her memory in order to recall any prior experiences with such houses or accommodation. If the consumer has ever lived with a stranger before and did not like the stay, then chances are he will not choose the option to rent an apartment with a stranger. Basically, a person wishing to purchase a house will search for external information probably because of insufficient prior experiences or maybe he or she is afraid of making a mistake and avoid taking high risks. An individual would prefer an external information source probably if the cost of acquiring such information is lower. Buying a product such as a home requires keen decision that the consumer has to be satisfied by the choice decided as a result of heavy costs associated with house buying. Major sources of external information provided to the consumer will normally be from friends or family members, the consumer will ask friends if they have any valuable information of any available accommodation choices available. Some would have a preference for town premises others will prefer upcountry serene houses or others would prefer living in a place which consideration has been given to place of work. Public sources and consumer reports from product rating trusts could be another option place of information for a person wishing to purchase a house. In addition, real estate companies could advertise the type of houses they have and their location. The information of where to purchase the house would also be sought on company websites and from the house sales representative. Development of Decision Matrix Housing Location or choice Possible points safety Accessibility to workplace Brisbane house shared with a friend 5 3 2 Sydney three bedroom apartment 5 4 3 2 bedroom apartment in Brisbane safe environment 5 5 1 2 bedroom apartment to be shared and has access to public transport 5 3 2 2 bedroom apartment with childcare services around 5 4 3 Total points 25 19 11 Assessing the value of the house option preferred This clarifies the consumer problem by suggesting the criteria the consumer uses to purchase the house option or getting the best location that meets the criteria or by initiating the consumer value development concept. The criterion for evaluation of a consumer is represented by attributes of the home such as ocean view house, accessibility to public transport or nearness to working place. The criteria evoke an established consumer decision to purchase the house or not. Factors that are subjective such as prestige will make a consumer purchase a house that is close to a beach. The option that the consumer chooses from among the alternatives is the choice that the purchaser is aware of. The decision to purchase will also be determined by the terms of sale, the dealer the consumer is buying from and the pleasantness of living in the neighborhood. Leif (2005) suggests that people would also purchase a house depending on factors such as the price of the house, the gender of the people living in the environment, the culture and the occupation of the people living in a particular environment. Possible points affordability safety Accessibility to work Brisbane house to be shared 5 4 4 3 Sydney three bedroom ocean view apartment 5 2 4 3 Apartments access to public transport 5 4 4 4 Apartments with nearby childcare services 5 4 4 3 Brisbane apartments in safe environment 5 3 4 4 Total 25 17 22 17 Application of the compensatory decision rule Consumers will purchase a house depending on the need they perceive. A consumer who would want a house that has childcare services will be highly satisfied with a house he or she rents where such services are provided. However, another consumer who was looking for a different accommodation such as in the countryside will not be satisfied by such a house, therefore he will rank lower the satisfaction gotten if he or she was to live in the home. Reynolds (2008) points out that after a consumer has made the decision to purchase a given choice of a product, he is likely to make comparisons with his or her expectations which will leave him satisfied or dissatisfied. The level at which the consumer becomes satisfied or dissatisfied has an effect on the value of perceptions created by the consumer, his or her communications and his or her willingness to continue living in the house on rental basis. If the environment has satisfied the needs of the consumer then the purchaser will continue staying in the house. If he or she is unhappy with the house then chances are the consumer will move out to look for a house that is more satisfying. Many housing agencies will work to ensure that the consumers have a positive post purchase experience by trying to provide all the service needed in the house. This will ensure that a positive communication is maintained between the landlords and the tenants. This also contributes towards developing a positive relationship between the home buyer and the home owners. The firms will try to convince the buyers that the decisions they made was indeed right hence the buyers will not have any reason to feel anxious or angry by the decision they made to purchase the option of the house. Firms use the sales people who follow up on the clients to try to convince them concerning their buying decisions. Wallace (2008) writes that consumers may minimize or jump over a single or more steps in the process of purchasing decision. This is dependent on the level on which the consumer was involved in searching the information concerning accommodation or the economic, personal and social significance of purchasing the accommodation. However if the consumer spent more time on information related to the accommodation of choice then it would seem expensive and could be an indicator of one’s social image hence would pose dangerous consequences on the consumer. Gilbert (2008) reviews that a habit is always seen in consumers who may have limited time to get more information concerning the kind of information they need. Therefore they will only have less effort involved to compare the alternative accommodation available for purchase or rent. The consumer therefore has to buy the fewer options presented to him or her from the external sources. Houses in the ocean view are less affordable by more of the consumers because they are expensive therefore if the consumers were to purchase the ocean view apartments then they would be dissatisfied by the high price of the house and also the accessibility of the work place. Analysis of Choices Various concepts such as personality, motivation, values, beliefs, perception, lifestyle and learning are vital when interpreting the process of consumers buying decision. Lee (2007) points out that understanding this process will help the marketer and the companies design the rightful strategies to approach the consumers to purchase their products. A consumer will be motivated to purchas e a given house at a given location because he or she desires to own a home or live in the particular place of choice. (Huffman 2007) writes that the motivation acts as a force pushing the consumer towards getting the need satisfied. Needs are hierarchical therefore the needs has to be met so as to satisfy the desire of the individual in question. The traits demonstrated by a given individual will determine the type of a product someone prefers. For instance individuals who are reserved or rather the introverts would love to reside in environments that are less noisy and free from disturbances. Such an individual is going to make a choice of purchasing accommodation that is far away from busy town environment hence would prefer housing situated in countryside. Culture also determines someone’s choice of residency because individuals from different cultural backgrounds have distinct personalities that make them have preference to certain accommodation choices. For instance, the Muslim communities have a type of unity in the fact that they would prefer to stay together in an apartment even if they are strangers. On the other hand some individuals without the culture of sharing would not have a preference to share an apartment and therefore such an individual would choose to buy or rent the house individually. (1999) points out that the personality trait of someone would influence the choice made when looking for a particular good or service and is revealed in his or her own concepts. This is the way someone believes to be and the way they perceive how they are viewed at. Someone would think sharing an apartment would interfere with the social class he or she thinks he fits in. Renting or buying an apartment of their own would imply their nature of independence if need to say. People would have a preference to purchase a house in a given location basing on their lifestyle too. People who love nature would want to purchase accommodation that is near physical features such as Oceans, Mountains or valleys. Such people will be driven by their desire to watch nature or admire the beautiful scenery in the comfort of their homes. Living next to large cities like Brisbane could also be someone lifestyle. Someone would want to enjoy accessibility to all social amenities provided in town hence he or she would have the preference for an accommodation near town. Jansen (2009) writes that the process by which an individual will use to form a meaningful outlook of the product or service they would want to buy is characterized by selecting, organizing and interpreting the choices available for him or her to make a decision to buy. Sutherland (2008) suggests that perception is vital in consumer buying process because individuals perceive selectively what they seem to want which will eventually determine how the same individual will perceive risks associated with a given purchase. Selective process The process will involve exposure, understanding and retention in ones memory so as to interpret the information. In the example of accommodation purchase, a potential house buyer will pay attention to information that is more consistent with their attitudes and beliefs and if the message is not consistent with their own beliefs and attitudes they will ignore. Selective understanding, retention and perceptions The potential buyer will interpret the information that he or she finds concerning the available accomodatio0n houses in the region. He will sort out the information so that it is consistent with his or her beliefs. However, (Carmon 2006) write that a consumer is not going to remember all the information they get whether it was in reading or hearing. This implies that the potential house purchaser is only going to retain the information that is consistent to his choice and preference. For instance, a potential house buyer looking for accommodation with accessibility to public transport will not remember information concerning the safety of the neighborhood which is also an important attribute. The decision of the potential buyer to finally purchase the house could also be dependent on perception that is subliminal. In that the consumer could hear or see information when they are not even aware of the message they are getting, however this kind of information has little influence on the final choice of the consumer to purchase. Post purchase behavior Consumers might feel anxious after they have made the decision to purchase a product. Before they make a real purchase of the product, the outcomes cannot be anticipated though they may believe that they may get negative outcomes after they have purchased the product. For instance, a house buyer who chose to live in a neighborhood that is easily accessible by public transport might find later that the neighborhood is not safe enough for the child. Such a consumer would then wish that she would have had another consideration in mind. In some products other than housing, marketers try to minimize such a feeling of anxiety among the consumers by offering free trial, giving endorsement from influential individuals and offering warranties and guarantees. Conclusion In conclusion, various factors are considered by potential house buyers before they make the final decision of purchasing a home or renting a house. Different individuals have different aspects they consider to be important before they make a purchasing decision. Some will consider safety, nearness to public transport, proximity to ocean or sharing housing to be their top most priority. Some individuals will choose a house depending on their lifestyles or personality. Lifestyle will influence someone to consider accommodation that is near the town center or prefer accommodation that is away from the town or an accommodation situated in the countryside. Some will choose accommodation depending on the affordability. Those who prefer expensive houses chose them because of prestige and the ones with less income will prefer a cheaper and affordable house. Every house constructed therefore has to reflect a given market target. For instance, house sellers target consumers who live near town due to work or studying, or those who would just be associated with the lifestyle of living in the town center. Some target the high income earners or lower income owners. Therefore home sellers design their houses depending on the buyers’ perceptions and buying behaviors. Bibliography Carmon, S. (2006). Linking Consumer and Lender Perspectives in Home Buying: Journal Of Consumer Affairs. 33 (2) 402- 411 Gilbert, R, (2008). Perspective on Consumer Decision Making, an Integrated Approach: Journal Of Consumer Behavior, 21(6) 87-93 Huffman, C. (2007). The Why of Consumption: Contemporary Perspectives on Consumer Motives, Goals and Desires. Journal of International Marketing.7 (2) 15-18 Jansen. R (2009).Synchrony Effects on Customers’ Responses and Behaviors. International Journal of Research in Marketing, 26 (1) 34-40 Lee, G. (2007). Observation of a Strategic Household Purchase Decision, Journal of Consumer Psychology, 11(4) 33-37 Leif, W. (2005). Social Facilitation: Affect and Application in Consumer Buying Situations. Journal of Marketing, 11(1) 76-80 Mitchell, W. (1999). Consumer Perceived Risk: Conceptualization And Models. 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