Internal Factors Influencing Consumer Decision-Making process: The ase of Coke Consumers - Literature review Example

Internal Factors Influencing Consumer Decision-Making process: The case of Coke Consumers Executive summary Marketing process is about meeting consumer needs. Marketers should therefore, centre all they do on consumers. They should develop products which meets clients’ requirements. Marketers can achieve this by introducing more appealing brands. Understanding consumer behaviour is thus the starting point for a firm’s marketing activities. There are various emotional and symbolic aspects that influence the consumer’s decision making. This paper evaluates internal factors influencing decision-making processes of consumers of coke, a product of Coca-Cola Company. The paper examines four main factors namely consumers’ motivation, perception, personality and self concept, attitudes and learning. Some of the various models describing how these factors affect consumer behaviours examined in the paper are Maslow’s hierarchy of needs, attitude-towards-object, Freudian, consumer perceptual process and classical conditioning learning models. The paper indicates that Coca-cola has gone an extra mile in understanding the decision-making processes for their consumers. In so doing, the company has researched customer needs in order to create market-responsive products. TABLE OF CONTENTS Executive summary 0 Introduction 2 Internal Factors influencing decision making 3 Consumer motivation 4 Consumer Perception 6 Attitude 7 Consumer learning 8 Personality and self-concept 9 Conclusion 10 References 11 Introduction Consumer decision making process is a road map that represents thoughts, evaluations and actions that lead an individual to accept or reject particular products. Precisely, it refers to the behaviours portrayed by a consumer in the processes of search for, evaluation, selection, purchasing, use and disposal of products and services (Blythe, 2008). According to Lamb et, al (2011), consumer decision making model involves “need recognition, search of information, evaluation of the available alternatives, purchase decision and post purchase decision”. Understanding of the consumers’ decision-making processes helps in formulating effective marketing strategies and plans. Coca-Cola Company is the largest manufacturer of non-alcoholic beverages in the world. Some of the successful global brands of the Coca-Cola Company include Die Coke, Sprite, Fanta, Glaceau vitamin water, Oasis, Oasis extra light and Relentless, Sprite zero, Schweppes zero, 5 Alive, Kia ora, Kia ora zero and Powerade Powerade zero. The Coke brand is present in more than two hundred countries across the globe. According to Lantos (2010), the successful performance of coke in the highly competitive soft drinks market can be attributed to the Coca-Cola’s strategies to understand consumers’ needs and behaviours and its effective customer management and response strategies. Lantos (2010) explains that innovation of these products was influenced by purchasing behaviours of different consumer segments. Internal Factors influencing decision making Consumers of soft drinks such as coke can be described as problem solvers whose purchase decisions are influenced by their perceptions, individual personalities and attitudes towards this product (Lee & Johnson, 2012). According to lee & Johnson (2012), coke consumers also focus on consequences when making their purchasing decisions. These behaviours are best described in the Maslow’s hierarchy of needs, attitude-towards-object, Freudian, consumer perceptual process and classical conditioning learning models. Therefore, the main factors influencing decision-making processes for coke consumers include motivation, perception, personality and self concept, attitude and learning Consumer motivation Motivation refers to an innate force that drives an individual to make a decision or engage in behaviour. It develops from an inner tension caused by unsatisfied desire (Bose, 2010). The need to fulfil specific desires drives human action. Unsatisfied needs lead to tension which, in turn, drives individuals to develop specific goals to satisfy these needs. Thus, consumers select specific products categories and brands which they believe are going to satisfy their needs, as described in the Hierarchy of Needs Theory. The Hierarchy of Needs theory was proposed in 1943 by Abraham Maslow. It describes the source of buyers’ motivation to purchase specific products (Bose, 2010). It is based on the assumption that human needs can be grouped into five categories and then placed in a hierarchy based on the urgency of each category of needs. The first category identified by Maslow constitutes the physiological needs. These include the primary needs such as water, air, food, shelter and clothing. Remarkably, the category is comprised of the requirements for human survival. The second category consists of safety needs (Management Study Guide, 2012). These needs include physical, emotional and environmental safety and protection. Examples of such needs are financial security, health security, family security, protection from animals and job security. The third category includes social needs such as the need for care, love, affection, friendship, happiness and belongingness. The fourth group comprises of esteem needs. These needs are grouped into internal and external esteem needs. Internal esteem needs include confidence, respect, competence, freedom and achievement. External esteem needs include status, recognition, attention and admiration (Management Study Guide, 2012). The final group comprises of self-actualization needs. These are the needs that enable an individual to realize his or her full potential. This category constitutes the needs that are driven by the desire to become the most one can be, to acquire the most that one can or to accomplish everything that one can. Maslow placed these needs in a hierarchy, as indicated in the figure below: Maslow’s Hierarchy of Needs Source: Management Study Guide, 2012 Apart from the first category, all the others comprise of acquired or psychological needs. Coke consumers are motivated by the need to satisfy their physiological, as well as, psychological needs. Coca-Cola Company understands that researching customer’s needs is the first most important step in becoming a customer-focussed business. As such, the company has invented different products in order to satisfy the different categories of consumer needs (Lee & Johnson, 2012). A consumer may purchase drinks to satisfy physiological need of thirst. However, selecting coke amongst other products in the same category is psychogenic. A coke consumer may also be motivated by the need to satisfy emotional needs of happiness. Coke satisfies this need by its unique taste and its themed message of open happiness. Other consumers take coke zero, which has a low level of sugar to fulfil the need of health security. Therefore, Coca-Cola always focuses on satisfying the evolving needs of consumers by being innovative. Additionally, this company motivates consumers through the use of various ads that are displayed in the multimedia. The ads mainly focus on themes of self actualization and self-esteem. A good example is the popular ad bearing the phrase “Hard Times”. This ad displays a sad billionaire who incurred financial loss due to the recent economic crisis. He eventually finds happiness and consolation in drinking coke, in the company of his friends (Lee & Johnson, 2012). Consumer Perception According to Pride & Ferrell (2010, p. 154) perception refers to the “process of selecting, organizing and interpreting information inputs to produce meaning”. Information inputs are the sensations that people receive through touch, taste, smell, sight and hearing. The perception process involves three steps namely; exposure, organization or attention and interpretation or comprehension. Exposure takes place when individual’s senses are stimulated by a marketing campaign such as an advertisement. Individuals usually receive much information at once, and hence, they select some inputs and ignore others (they select objects that they find to be pleasant) (Pride & Ferrell, 2010, p. 154). Organization process involves selective attention and processing of information inputs that reach an individual’s awareness (Pride & Ferrell, 2010, p. 154). Selective attention occurs where consumers focus only on the information that is relevant such as watching business news or sports and ignores information that is not consistent with their goals, needs, beliefs and values. A consumer may go a step further by searching additional information such as visiting sponsor’s website, searching for a product’s website or clicking on online ads. Finally, interpretation or comprehension step involves decoding of retained marketing information. The retained information may be accurately comprehended, it may not be comprehended, or it may be unconsciously misinterpreted. Information that is not consistent with the goals, values and beliefs of a consumer may be misinterpreted or not comprehended at all. When bombarded with too much information, they selectively comprehend parts of the information retained. For any stimuli to be effective to a particular individual, it must be accepted and retained. This is only possible after these perception processes are complete (Pride & Ferrell, 2010, p. 155) As Lee and Johnson (2012) explain, aggressive market campaigns and ads displayed in the multimedia have played a great role in enhancing consumer perception of coke. Most of the company’s ads portray celebrities that are well known globally. Presence of celebrities helps in attracting attention of consumers and supports the process of selection of coke ads, amongst others. In addition, Coca-Cola Company has sponsored numerous songs of famous football leagues and the world cup which help in capturing the hearts and wallets of Coke consumers globally. Coke is usually displayed as having a ‘very good taste’ and that it makes one ‘feel good’. Consumers therefore, perceive Coke as superior brand, and this, in turn, provides the company with a competitive edge over other soft drinks manufacturing companies. Attitude A study, which was done by Hoffman & Bateson (2000), stated that an attitude relates to ones feelings towards an object. A consumer’s attitude towards a product may develop as a result of direct experience with mass-media advertisements, the product or word of mouth information (Hoffman & Bateson, 2010). A consumer’s attitude formed over time is often consistent with his or her purchasing behaviours. The attitude-towards-object model clearly reflects how consumer attitudes towards Coke are formed (Hoffman & Bateson, 2010). In other words, attitudes are informed by the perceived qualities of a brand and the experience achieved from the product. The Coca-Cola Company conducted a study in 2010 to examine attitudes of consumers towards its products. According to Lee and Johnson (2012), more than half of the respondents of this research indicated that it is the taste of coke that pleases them while others indicated that coke provided them with an opportunity to spend quality time with close friends and families. Attitudes towards coke are also formed by the company’s adverts in media and aggressive campaigns. The company’s Corporate Social Responsibility activities (CSR) such as sponsoring football leagues in various parts of the world help to reach a wider audience. This, in turn, plays a crucial role in creating consumers’ attitudes towards coke. At times, the company gives free samples to consumers, hence enabling them to derive pressure from the product. This helps to change unfavourable attitude perceived by some clients (Lee & Johnson, 2012). Consumer learning Consumer learning refers to a process through which individuals acquire information and experience in purchasing and consumption of products. Learning theories describe four main factors that constitute the learning process namely; motive, cue, response and reinforcement (Hoyer & MacInnis, 2008). Consumer motivation arises from individual goals or needs and acts as a catalyst for the whole process of learning. A cue is a stimulus that drives a motive in a particular direction. A response is an individual’s reaction to a cue and the resultant behaviour. Reinforcement is a factor that increases the probability of a response occurring again in the future as a result of a certain cue. According to classical conditioning theory, human beings, just like other living organisms, are passive entities who can learn from continuous exposure to stimuli. Repetition or continuous exposure strengthens the association between a conditioned stimuli and unconditioned stimuli and enhances the process of remembering. Additionally, living organisms tend to respond in the same manner to two stimuli with slight differences, a process known as stimulus generalization (Hoyer & MacInnis, 2008). When exposed to similar stimuli, a living organism selects a specific stimulus and ignores the others. As suggested in this theory, consumer choices are often influenced by the extent of exposure to information related to particular products. A consumer with experience regarding a product is able to recognize features that constitute reliable cues to the product’s quality. As noted earlier, Coca-Cola makes numerous product advertisements in different types of media showing that their products make consumers comfortable and happy. Repetition of these ads influences consumers to learn about the value derived from the products, that is, conformability and happiness. This, in turn, leads to an internal drive to purchase Coke. Good experience from drinking this product results in an increased desire for taking coke again in future (positive reinforcement). Personality and self-concept Personality refers to an individual’s unique traits that influence his or her response and behaviour towards the external environment. Self-concept, on the other hand, refers to an individual’s overall evaluation and feelings of an object (East et al, 2013). As such, an individual’s consumption of a particular product may depict his or her self concept. Freudian indicates that individual’s personality and self-concept are shaped unconscious needs. Consumers select goods that provide benefits to them and those that express their desires and self image. According to Lee and Johnson (2012), some coke consumers have formed a strong association with the brand as they feel that it represents their personal images. They purchase coke products to enjoy psychological benefits associated with the brand. This leads them to always select coke products when presented with a wide range of products of different companies. The company’s ads portray celebrities whose traits are desirable by consumers. This attracts individuals who try to associate themselves with those traits through the use of the coke products. Conclusion This essay has shown that companies, with special reference to Coca Cola, have taken cognisant of the need to understand consumers’ decision-making process. The decision making processes of coke consumers is highly influenced by their levels of motivation, perception, personalities, personality and self-concept attitudes and learning. The factors influencing their decision making processes are well described in the Maslow’s hierarchy of needs, attitude-towards-object, Freudian, consumer perceptual process and classical conditioning learning models. In the face of globalization, Coca-Cola has responded effectively to the behaviours portrayed by consumers by developing innovative brands that suit different needs of different consumer segments. Their ads in the multimedia and their overall marketing campaigns have been effective in persuading consumers to purchase coke. Therefore, it is essential for organizations to understand the factors influencing decision-making processes in order develop effective marketing strategies and plans. References Blythe, J. (2008). Consumer Behaviour. London: Cengage Learning. Bose, C. (2010). Modern Marketing. New Delhi: PHI Learning Pvt. Ltd. East, R., Wright, M. & Vanhuele, M. (2013). Consumer Behavior: Applications in Marketing. London: SAGE Publications. Hoffman, K. D. & Bateson, J. E. G. (2010). Services Marketing: Concepts, Strategies, & Cases. New York: Cengage Learning. Hoyer, W. D. & MacInnis, D. J. (2008), Consumer Behaviour. New York: Cengage Learning Lamb, C. W., Hair, J. F. & McDaniel, C. D. (2011). Essentials of Marketing: New York: Cengage Learning. Lantos G. P. (2010). Consumer Behaviour in Action: Real-life Applications for Marketing Managers. London: M.E. Sharpe. Lee, M & Johnson, C. (2012). Principles of Advertising: A Global Perspective. Ed: 2. New York: Routledge. Management Study Guide. (2011). Maslow’s Hierarchy of Needs Theory. Retrieved on 2 April, 2013, from Pride, W. M. & Ferrell, O. C. (2010). Foundations of Marketing. New York: Cengage Learning. Read More